When condo owners join the board of a newly registered condominium project, they’ll often face a lot of new processes and terminology that they’re not familiar with. One of the most significant is a performance audit.
The performance audit is a key part of the warranty on the common elements of a project, which the directors on the board will need to manage. The audit occurs in the first year after registration of the condo so it’s important that the condo board members learn as soon as possible about its purpose, what’s involved, and what role the board plays.
What is a Performance Audit?
A requirement under Section 44 of the Condominium Act, the performance audit is a comprehensive inspection of a project’s common elements to identify any construction deficiencies that need to be addressed, such as water penetration or fire safety issues.
The first-year performance audit must be conducted between six and ten months from the date of registration of the project, and the resulting report is then submitted to Tarion, the non-profit consumer protection organization that administers the Ontario new home warranty, before the end of the 11th month following registration.
The individual who conducts the performance audit for the condominium corporation is referred to as the performance auditor who must hold a certificate of authorization under the Professional Engineers Act or hold a certificate of practice under the Architects Act. It is up to the condominium corporation to hire and pay for the performance auditor.
What Happens During and After the Performance Audit?
During the performance audit, all major components of the building are reviewed, including, but not limited to, the foundation, parking garage, elevators and mechanical, electrical and fire protection systems.
On some condominiums, Tarion requires the builder to provide third-party reporting, referred to as the B19 Final Report. If this is required to be completed, the performance auditor will also review this documentation. Additionally, they will conduct a survey of unit owners to determine if there are any concerns that unit owners have that may relate to a deficiency in the common elements.
Along with the performance audit report, the performance auditor will submit a performance audit tracking summary (or PATS) to Tarion and the builder. The PATS, which lists all items identified in the performance audit, is a tool used to track the progress of repairs and allows communication to take place between the condo corporation and the builder; they both are expected to update the PATS every 90 days.
The builder will have an 18-month repair period from the first anniversary of the registration date of the condo project to repair or resolve all items listed on the PATS that are covered by the warranty.
Appointing a Designate and Using MyHome
Around the time the performance audit is submitted, the condominium corporation must select a “designate.” The designate is the individual (e.g., a board member, property manager or performance auditor) who will act as a point of contact between the corporation and Tarion. The designate is responsible for overseeing the resolution of warranty items, managing timelines, and making the required regular updates to the PATS.
The name of the designate must be communicated using the appointment of designate form. As soon as Tarion receives the form, the designate can use MyHome and CEPATS, digital tools that make managing the common elements warranty a lot easier.
For example, MyHome allows the designate to submit warranty forms, upload documents to support a warranty claim, and update the PATS. Email reminders are sent important warranty dates.
Additional Tips for Condo Boards
1. Review the declaration and description to have a clear understanding of unit and common element boundaries. Include unit questionnaires with the performance audit.
2. Keep track of warranty timelines. Know when a warranty claim can be submitted.
3. It’s important to keep the lines of communication open with your builder. Work with the builder to resolve the claim items. Update the performance audit tracking summary every 90 days.
4. Keep unit owners informed about concerns and repairs related to the condo’s common elements.
5. Maintain the condo building. Keep in mind that improper maintenance can affect warranty coverage on the common elements.
Condo boards with questions about performance audits, the common elements warranty or their responsibilities can visit Tarion to learn more or email [email protected].
Ryan Haley has worked at Tarion since 2008 and is the director of common elements. He works closely with vendors, builders, municipalities, consultants, and owners across Ontario to help ensure condominiums are constructed as required under warranty. Ryan graduated from George Brown College with a Diploma in Architectural Technology and has since obtained a Certificate in Building Science from the University of Toronto. He has been a member of the Building Science Association of Ontario (BSAO) and has held the designation of Building Science Specialist (BSS) since 2016
