PAWEL DWULIT / THE CANADIAN PRESS
Construction cranes in downtown Toronto on February 4, 2012. Provisions in Ontario’s Condominium Act, 1998, drawn up 14 years ago, are out of date, says Armand Conant.
Condo act in need of an overhaul
Need seen for new way
to resolve disputes when
condo parties disagree
Take a drive along any major
artery in the Greater Toronto
Area and it’s easy to understand
why it has become the land of
condo towers. Indeed, Toronto
has more condominiums under
construction than any other city
in North America. The growth
has not been limited to the GTA:
1.3 million Ontarians now call
home among 500,000 condo
units overseen by more than
7,700 corporations.
And, yet, it has been 14 years
since provisions in Ontario’s
Condominium Act, 1998 were drawn
up. They are now out of date.
The Canadian Condominium
Institute (Toronto) and Association of Condominium Managers
of Ontario are seeking to have
the act revised and, with the
input of unit owners, directors,
ARMAND
CONANT
developers and professionals in
the industry, submitted to the
Ontario government an extensive brief with legislative recommendations. Here are some
of them.
Relationships
Disputes between condo unit
owners and corporations are
the biggest issue facing governments. Examples include requiring a corporation to produce certain records when requested, or
a corporation seeking to enforce
its declaration, bylaws or rules.
In either case, unit owners can
be difficult with the condo
board, or boards can act
unreasonably, often for personal reasons.
But a corporation has deeper
financial pockets than owners
and this can put the latter at a
disadvantage. As a result, effect-
ive and cost-efficient mechan-
isms must be developed for
resolving disputes. While medi-
ation and arbitration have
helped, they are not always
effective. Other solutions may
be necessary, such as a dispute
resolution officer who decides
minor issues, a full tribunal or
an ombudsman.
Governance
The act provides that if more
than 15 per cent of the units are
occupied by their owner, then
one director’s position may be
elected only by owner-occupiers.
This was legislated to try and
solve a perceived problem that
turned out not to exist. This
owner-occupied position complicates the election process,
including proxies, and causes
unnecessary conflicts among
residents and owners alike. It
should be eliminated.
Other governance recommendations include:
n;Given the large asset value of
condominium buildings and the
complexities in operating a corporation, new directors should take a
basic course on being a director.
n;Change the proxy form so that
the proxy holder can vote for
candidates nominated from the
floor and not be restricted to
voting only for those named in
the proxy.
Financial
There is no Ontario new-home
warranty protection for converted buildings. This leaves purchasers at a serious disadvantage
since they will have only limited
warranties for construction defi-ciencies. With the growing trend
of converting existing buildings
to condominiums, the need for
adequate warranty protection
has never been greater. Thus,
Tarion Warranty Corp., whose
purpose is to protect the rights of
new-home buyers, should be
extended to conversions.
Also, better financial disclosure by developers is required.
There has been a trend by
developers to pass on more of
their costs to the condo corporation. In addition, developers
are taking parts of the building
that historically were common
elements and turning them into
units, and then leasing or selling them to the corporation,
usually with the costs not
appearing until the second year
of the corporation. This keeps
common expenses artificially
low, both for selling the units
and for the first-year budget,
but it usually results in a significant increase in monthly fees in
the second year.
While purchasers must take
responsibility for reading their
documents, greater disclosure of
key financial matters is needed
to better protect consumers.
As well, certain assets of a
corporation, such as a management office and guest suite,
should have a reduced or minimal assessed value to avoid
double taxation. This is because
See Condo Page 12
