Condo Act

Province reveals proposed Condo Act reforms

If passed, legislation would deliver alternative dispute resolution and manager licensing
Wednesday, May 27, 2015
By Michelle Ervin

Today marked a significant milestone in the Ontario government’s plans to modernize the Condo Act, as stakeholders got a first glimpse of the proposed legislation many had been anxiously awaiting.

Minister of Government and Consumer Services David Orazietti announced at a press conference that he would be introducing the Protecting Condominium Owners Act in the provincial legislature this afternoon. If passed, the Act would dramatically overhaul the Condominium Act and establish the Condominium Management Services Act, which would provide for the regulation of condominium managers.

“The existing Condominium Act dates from 1998, a time when far fewer people lived in condos and when the issues revolving around day-to-day life in condos were far less complex than they are today,” said Min. Orazietti. “In recent years, it has become increasingly obvious that our current Act is in need of replacement, and that we need new legislation to keep pace.”

The proposed legislation is based on the 200 recommendations and 2,200 submissions the Ontario government received during its three-stage Condominium Act review. Those who followed and participated in the consultation will recognize the proposed legislation’s main features. They include an alternative dispute resolution process, beefed up consumer protection measures, stricter financial management rules, training requirements for condo directors and licensing for condo managers.

If passed, the Protecting Condominium Owners Act would also create two new delegated administrative authorities. The Condo Authority would offer a cheaper, faster means of dispute resolution compared to the courts as well as act as a registry for condo corporations and a single source of reliable information. The Condo Manager Licensing Authority would establish minimum qualifications, mandatory training standards and a code of ethics for condo managers.

Once up-and-running, the authorities would be self-funded through service fees. In the case of the Condo Authority, those fees would include a nominal charge of around $1 per unit, to be collected from condo owners as a monthly common expense, starting when the authority’s dispute resolution services become available.

The condominium stakeholders who were on hand for the announcement largely welcomed the news.

Dean McCabe, past-president of the Association of Condominium Managers of Ontario (ACMO), applauded the government for introducing the reforms. ACMO has long advocated for the licensing of the profession.

“The biggest thing that we were looking for — the biggest feature — is something that the minister addressed today,” said McCabe, “and that is the fact that this will be a regulatory body that is dedicated to licensing and implementing ethical and professional standards for condo managers, and condo managers only.”

Going forward, ACMO hopes condo managers will continue to have a role in the discussions about regulations, which will dictate how the licensing of managers will work, and have a say in who represents them on the board of the licensing authority.

Engineer Sally Thompson, also the 1st vice-president of Canadian Condominium Institute’s Toronto chapter (CCI-T), was pleased to see the proposed legislation proceed after getting stalled by the provincial election last year. CCI-T is especially focused on the reforms concerning good governance and financial management.

“If we can get the finances right in the condos, then we’re going to get them off on the right foot, then they’re much more likely to be happy and successful places to live,” said Thompson.

One way the proposed Act would strengthen financial management is by defining, through regulations, what “adequate reserve funds” are and offering condo corporations a way to determine whether their reserve fund is sufficient.

Sandy Steffen, a condo board president, said the proposed strengthened financial management rules and training and licensing for condo managers would have helped her condo corporation. She shared the story of how, in 2009, her condo corporation was defrauded of $250,000 by a rogue property manager.

“I’m really hopeful that this new legislation will help protect people like me,” said Steffen.

William Stratas and Judy Sue, of Eagle Audit Advantage, described the new Condominium Act as having “high promise,” but added that it will need to be matched with “decisive implementation” to protect condo owners from fraud.

Referring to Min. Orazietti’s comment that the Condo Authority with “have teeth,” Stratas posed the question: “Will those teeth bite?”

The proposed legislation is expected to sketch out the reforms in broad strokes, with the regulations filling in the details. In the future, this would give the government greater agility to amend the legislation to meet emerging challenges without having to re-write the whole Condominium Act again.

Min. David Orazietti said he is “optimistic” that his colleagues will be supportive and that the provincial legislature could pass the Act by the end of the year. He also suggested that the Condo Authority and Condo Manager Licensing Authority could be set up as early as the end of 2016.

“As we go through the committee process at the legislature,” said Min. Orazietti, “there will be opportunities for folks to make presentations around the regulations, and the development of those specific regulations, which we think will make for a much stronger and a better Act.”

Michelle Ervin is the editor of CondoBusiness.

One thought on “Province reveals proposed Condo Act reforms

  1. Great news. I can’t wait to see more financial controls. I hope this includes transparency around how are money is being used towards incidentals and not directly running the building. Seems now, the board does as they wish.

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