In a previous post in January we gave an update on the Condominium Act Review Process. We want to remind readers that comments on the Stage One Report, which highlighted the major areas of concern to be addressed in the re-vamping of the Condominium Act, must be made by March 11, 2013.
You can e-mail your comments to the government at oncondo@ontario.ca
Canada’s Public Policy Forum released its report to the Ontario Ministry of Consumer Services containing findings from Stage One of the Government’s Condominium Act review process. Stage One of the three-stage review process was the collection of feedback from various stakeholders in the condominium industry, including
The report highlights six areas of concern that need to be addressed in the re-vamping of the Condominium Act.
Stage Two of the review process will start in March, 2013. Groups of experts (which will include owners) will review the report and then develop detailed options for revision of the Condominium Act.
The Ontario Government’s condominium review website has a copy of the full report and a summary for anyone interested in reading more.
We are often asked by condominium corporations whether an appeal of Tarion’s final decision letter will prevent them from commencing a separate civil action with respect to the same deficiencies.
The recent decision by the Ontario Court of Appeal in Metropolitan Toronto Condominium Corporation No. 1352 v. Newport Beach Development Inc. sheds some light on this issue.
In this case, the condominium corporation alleged two major construction defects. The first related to the sanitary system and the second related to the exterior cladding of the building.
Tarion denied the corporation compensation under the Ontario New Homes Warranties Plan Act (“Act”) with respect to both items.
How do you motivate condo developers to make green building standards a priority? Offer creative green building incentives that will make their projects more marketable. This is what Governor Cuomo had in mind for the State of New York, when he signed legislation which will authorize local governments to provide up to a 100% real property tax exemption for new green buildings or renovations projects exceeding $10,000 for specified periods - up to six years for LEED Platinum, with 20 percent phase out per year after that. The government vote was unanimous on this one! Homeowners in condominium associations doing renovation projects after January 1, 2013 may also be eligible for this tax exemption.
Definitely something that our provincial government should think about implementing.
Tarion has introduced significant changes to the major structural defect claims process. These changes will affect all condominium projects where the first arm’s length agreement of purchase and sale was signed after July 1, 2012. All of the changes are currently reflected in Regulation 992 to the Ontario New Home Warranties Plan Act, and summarized in Builder Bulletin 24 (revised).
After consulting with the condominium industry for the past several years, Tarion has expanded the definition of “major structural defect ” (“MSD”) to provide further direction to owners, builders and condominium corporations as to which deficiencies do in fact constitute a MSD.
The definition of MSD in the Regulations now refers to three separate “tests.”
The “failure” test looks at whether the defects in work or materials would result in “failure of a structural load-bearing element of a building.” Tarion describes this as a “fairly stringent test that contemplates actual structural failure.”
The “function” test looks at a structural load-bearing element and its function. Accordingly, any defect in work or materials that materially and adversely affects the ability of each structural load-bearing element of the building to carry, bear and resist applicable structural loads for the usual and ordinary service life of such element will be a MSD.
The “use” test was referenced in the previous definition of MSD, although the current language has been revised. In order to constitute a MSD, the “use test” requires that a “significant portion of the home (or common elements) is materially or adversely affected.” The use test is an objective standard which looks at the usual and ordinary purposes of a residential dwelling. Accordingly, in the condominium context, if a load bearing related deficiency significantly affects the use of a common element lobby, then presumably Tarion would constitute this as a MSD.
As was the case under the previous procedure, an MSD claim has to be advanced by a condominium corporation within 7 years of registration. The major difference is that if the deficiency does constitute a MSD under the new definition, the builder now has an opportunity to either take full responsibility for the MSD, or reimburse Tarion an amount referred to as a “co-share payment.”
The Ontario government recently announced that it would be undertaking a review of the Condominium Act and public consultation with condominium community stakeholders, including owners, residents, developers and property managers.
A number of issues of concern were identified:
Since the Condominium Act, 1998 was enacted in 2001, there have only been minor changes to the legislation. In the same time period the number of condominiums being constructed has grown tremendously, with the GTA being the hot-bed of condo development in North America.
The release of this press announcement seems to indicate that through the efforts of ACMO and CCI, the government is finally proceeding with a serious review of the legislative brief prepared by ACMO and CCI’s legislative committee. The process of preparing the legislative brief involved representatives from the condominium industry coming together with recommended changes to specific sections of the Condominium Act. A recent private member’s bill (which has been the focus of a lot of media attention) proposed some amendments to the Condominium Act. While it was recognized that changes to the current legislation are needed, there were concerns in the condominium community that the private member’s bill was very limited in scope and introduced without consultation and input from all major stakeholders in the condominium industry. With the government’s announcement we expect that the private member’s bill will not be moving forward.
Readers who are interested in participating in the consultation process should watch the government’s website for details on how to participate. We will be reporting on updates.
In this series of posts, we are focusing on the level of owner consultation required when boards are contemplating renovations to the condominium or changes to the services provided to the owners.
As indicated in our last post, some decisions by the board require owner consultation while other decisions do not. This post will focus on decisions by the board that do not require any owner consultation such as:
If you have wanted a detailed list cataloguing the differences between owning a home and owning a condominium you are in luck! Denise Lash recently presented to a large group at an HSBC event on the Differences Between Owning a House and Owning a Condominium.
Key topics of the presentation included:
The presentation also included the following review sheets and checklists:
Please visit the Condo Reporter Seminars page to review our up-and-coming events. Please click here to register for our next seminar titled Battle of the Proxies: Everything a Condominium Corporation Needs to Know About Proxies! The session will be held atHeenan Blaikie's Toronto office located at 333 Bay Street, 29th Floor. You may also participate via Live Stream by simply logging onto www.condoreporter.com. Prior registration is required to view the Live Stream.
In part one and part two of this blog topic, we discussed the circumstances in which a court will appoint an administrator to take over the management of a dysfunctional condominium corporation. This post will deal with how and when a court will end an administrator’s term and return the corporation to self-management.
Although section 131 of the Condominium Act does not contain an express provision addressing the termination of an administration, the courts have established that the test to remove an administrator is the same test as for the appointment of an administrator.
Good reason must be shown why unit owners should not manage their corporation’s affairs through an elected board of directors
When a court is considering either the appointment or termination of an administrator, good reason must be shown why unit owners should not manage their corporation’s affairs through an elected board of directors. The onus lies upon the individuals wishing to maintain the administrator to establish that this test is not met and that the administrator’s appointment should continue.
In my recent blog posting, I discussed the factors that courts will consider before setting aside an elected condominium board of directors to impose a court-appointed administrator.
Below are some examples where the courts have intervened and appointed an administrator. They include situations where:
These are, of course, only examples and the court’s decision will turn on the specific facts of each case.
The Condominium Act provides that the affairs of the condominium corporation are to be managed by a board of directors elected by the owners. Should the owners become dissatisfied with board members or the way they manage the corporation’s assets, the Act provides a mechanism for owners to requisition a meeting of owners to remove one or more board members.
In addition, the owners (or the corporation itself) can apply to the courts for the appointment of an administrator to take over the administration of the condominium corporation.
Imagine for instance, a situation where a condominium corporation has accumulated extensive debts and becomes unable to meet its payment obligations for utilities and municipal taxes. Rapidly, annual general meetings become “chaotic with blame being heaped on others for the corporation’s problems” and election campaigns become personal and acrimonious. Various factions of owners attempt to have the board removed, while the board accuses former board members of causing “internal strife and in-fighting”. The level of hostilities between residents, owners and board members quickly escalates while the corporation remains on the "brink of financial collapse". In such circumstances, even the most well-intentioned boards can become dysfunctional and unable to effectively manage the corporation.
The famous Thomas Edison once said “I shall make electricity so cheap that only the rich can afford to burn candles”. While we are still very far away from seeing Mr. Edison’s statement come to fruition, the provincial government has introduced legislation that purports to enhance consumer protection and energy conservation through a new regulatory framework that, in part, governs electricity retailers and condominium corporations. In particular, the Energy Consumer Protection Act, 2010 (the “Act”) and Ontario Regulation 389/10 made thereunder came into force on January 1, 2011.
The Act requires that all newly constructed condominium buildings have suite meters (otherwise known as sub-meters) installed for all the units in the condominium prior to the units being occupied.
In addition, the Act permits existing condominium corporations to enter into agreements with service providers to install suite meters for all the units in the condominium despite any declaration provision to the contrary. Existing condominium corporations should be open and transparent with the owners of a condominium corporation prior to entering into suite metering agreements even though the Act gives the Board of Directors the authority to enter into these types of agreements without the approval of owners. In particular, condominium corporations should let the owners know that they will be required to pay administrative fees relating to the suite metering (in addition to the fees for electricity consumption).
Condominium corporations should be aware that the authority to enter into suite metering agreements does not equate to the authority to read suite meters and invoice owners for the consumption or use of electricity. The Ontario Energy Board Act, 1998, the Electricity Act, 1998 and the Act (collectively the “Suite Metering Acts”) govern the administration of suite metering and suite metering services. The Suite Metering Acts provide that only licensed service providers can bill and collect payment from owners of a condominium corporation for the consumption or use of electricity. As a result, board members, property managers and any other employees of a condominium corporation should not be reading suite meters and invoicing the owners of a condominium corporation for the consumption or use of electricity.
By Joseph Salmon, Lawyer, Heenan Blaikie LLP
Many condominiums collect license plate information from residents for several reasons including parking enforcement. As such, it is important to take note of the Leon’s Furniture Limited v. Alberta (Information and Privacy Commissioner).
Leon’s stores in Alberta have a policy requiring customers picking up furniture at loading docks to provide their driver’s license numbers and license plate numbers. In 2006, one customer took offence to this practice and complained to the privacy regulator. In 2008, the Privacy Commissioner determined that Leon’s policy violated the Personal Information Protection Act. Leon’s had the Commissioner’s ruling reviewed by Alberta’s Court of Queen Bench, which upheld the Commissioner’s ruling. Leon’s then appealed this decision to the Court of Appeal, which reversed the Privacy Commissioner’s ruling.
The Court of Appeal found that there must be a balancing between the various interests at stake and the collection of personal information must be reasonable. Leon’s required a driver’s license and plate information in order to prevent fraud by making sure that the person at the loading dock was the actual customer. The Court found that Leon’s had a reasonable objective and was handling the personal information in a reasonable fashion. It was not relevant that there may have been better methods of preventing fraud or handling the information, so long as Leon’s purpose and method was reasonable.
The electric vehicle (“EV”) revolution has officially been launched and condominium developers have taken note. Many developers have recognized the invasion of the EV and the impacts this may have on the marketability of a condominium. As a result, some new condominiums are being built with a number of parking spaces that contain roughed-in EV outlets.
New developments have the opportunity to sub-meter EV outlets and clearly set out the responsibilities for maintenance, repair and insurance in the corporation’s declaration. On the contrary, existing condominiums have been created and declarations drafted without any contemplation of the EV. As a result, existing condominium corporations are in the difficult position of determining a number of issues, including the following:
Condo buyers with disabilities are having difficulty finding suitable housing to meet their needs. Part of the problem is that the development industry has not been focusing on the special needs of persons who require modification to the traditional design of condominium units. But things are changing with the introduction of The Accessibility for Ontarians with Disabilities Act ("AODA") which was enacted in 2005 the objective of which is to have Ontario fully accessible by 2025 through a phased approach.
Click here to listen to an interesting CBC Radio interview with Bryan Purcell of the Toronto Atmospheric Fund (TAF), commenting on the energy related proposed amendments to the Condominium Act and TAF's Green Condo Champion's project.
TAF's recent blog posting has more background information on the findings discussed in the interview.
In 2007, the Canadian federal government announced that starting in January, 2012, incandescent light bulbs would be phased out in order to reduce energy consumption. Just recently, the government proposed an amendment to the Energy Efficiency Regulation so that the phase-out of incandescent bulbs will be postponed for two years. This was prompted by concerns in the media and the public about perceived health and mercury issues, including safe disposal of florescent light bulbs ("CFL's"). However, as Health Canada has indicated that with respect to ultraviolet radiation and electromagnetic transmissions, CFL's do not pose a health risk, the government intends to use the next two years to communicate with the public that CFL's do not pose a health risk and to allow more programs dealing with the disposal of CFL's to be established.
Even though the mandatory phase-out of incandescent bulbs has been delayed, from a practical perspective many Canadians, including many condominium corporations, have voluntarily been transitioning to CFL's. We expect that in an effort to reduce common expenses, many condominium corporations have already made the switch to CFL's - for those that haven't they now have more time to complete the transition.
A special thank you to Ronak Shah (student-at-law) for co-authoring this article.
The Ontario Human Rights Code (the “Code”) requires condominium corporations to provide an equal opportunity to access housing and its intended benefits without discrimination on any of the grounds protected by the Code, including disability. The obligation extends to condominium boards, management, staff, owners and residents.
Time after time, human rights commissions and tribunals across Canada have affirmed that condominiums have a general duty to accommodate disabled owners and residents to the point of undue hardship. Depending on the circumstances, appropriate measures to accommodate persons with disabilities may include providing wheelchair ramps and accessible parking on the property, installing wide lobby doors that open automatically, or adding Braille to elevator buttons.
Accessibility Standards for Customer Service: The Clock is Ticking…
The clock is ticking for condominium buildings: beginning January 1, 2012, private sector organizations in Ontario will be required to comply with the first of five standards to be developed under the Accessibility for Ontarians with Disabilities Act. The purpose of the Act is to develop standards to reduce barriers that limit the full participation of people with disabilities in various aspects of society; specifically access to goods and services, employment, transportation, and information and communications.
The first of these five standards, the Accessibility Standards for Customer Service, is currently in force for designated public sector organizations. As of next year, the standard will apply to any organization providing goods or services “to members of the public or other third parties and that has at least one employee in Ontario”. The definition is broad enough to capture condominiums which provide services (concierge, reception, etc.) to members of the public (this could include visitors for instance) or third parties (other organizations).
Click here for an update on Motion Sensor Lighting in condos published in CM Magazine. Bryan Purcell, from TAF, provides an excellent summary of the recent by-law changes re motion sensor lighting and outlining what it means for condos.
It is important to have an understanding as to how condominium issues are dealt with in other jurisdictions. This can often lead to important amendments to legislation. It is a useful exercise to see how other provinces in Canada view such topics as insurance deductibles, indemnification of legal costs and reserve fund contributions.
An interesting article recently published in the Condominium Manager Magazine does a comparison of condominium legislation across Canada. This is Part 2 of a two part series. Click here to view Part 2.
Heenan Blaikie's Condominium Group represents the interests of condominium corporations, co-operatives and co-ownerships, condominium developers and financial institutions throughout Ontario. More...
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