Ontario Condo Law Blog : Toronto Condominium Lawyer & Attorney : Gardiner Miller Arnold Law Firm : Ontario, Ottawa, Hamilton, Kitchener

It is rare for us at Ontario Condo Law Blog to beat up on an underdog, but the owner-occupied reserved position on condo boards is decidedly worthy of that honour.

That reserved position (set out in the Condominium Act, 1998, subsections 28(3), 46(3) and 51(5) to (8)) surely is an underdog - it enjoys little or no support and no one (at least publicly) takes credit for its creation. While at least one of the Condo Act Review working groups is currently considering the fate of the owner-occupied position provision among many other much-needed improvements to our condo law, today’s post lends support to eradicating it. We also ponder what lessons the creation of that now universally reviled provision can usefully teach us as we amend the Condo Act this time around.

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Condos would be wise to consider immediate filing of a 2013 Request for Reconsideration with MPAC for their superintendent's unit and any other common amenity service unit before the imminent April 1st filing deadline, in order to take advantage of the new $9 nominal assessment ruling.

The Assessment Review Board ruled last Friday that 40 participating supers' units should be assessed for taxation at nine dollars each. That means no municipal tax.

That precedent is important because it applies not only to supers' units, but extends also to other common amenities service units, such as parking, guest, mechanical, gatehouse, recreational and other units owned by the corporation providing amenities or services to its unit owners. The ARB based its primary decision upon analysis of the nature of service easement aspects which merge s. 12 of the Condominium Act with s. 9 of the Assessment Act to enable an exemption from the full current value concept which otherwise governs assessment of realty parcels.

The ARB concluded alternatively that the market value of the supers' units was minimal and already resided in the owners' residential, parking and locker units.

The ARB also concluded that it was inequitable to assess supers' units differently than guest units. Last year, Bob Gardiner had convinced MPAC to reduce the assessment of over 200 of GMA's condo clients' guest and visitor parking units to a nominal assessment of $9 each, based upon his unique Request for Reconsideration rationales.

Bob has persistently spear-headed this initiative since 2005. Much of the language of the 35 page decision is based on his written and oral argument explaining over 100 legal concepts to rationalize 6 grounds for appeal, supported by 14 legal precedent cases contained in his Legal Authorities binder, as well as 200 pages of documents in his Statement of Facts binder.

David Fleet, an assessment law expert, and Carol Dirks, a condo lawyer, also forcefully submitted key arguments in a teamwork approach. The team convinced the ARB to accept a "condo world" view of common amenity service unit assessment, instead of the assessment arguments so capably submitted by MPAC's lawyer, Don Mitchell.

It is possible MPAC may appeal the ARB's decision, but the deadline to file the 2013 Request for Reconsideration for your Corporation’s common amenity service units expires April 1, 2013. You should receive legal advice well before that deadline. You can file even if you have already paid the tax. A copy of GMA’s 2013 RfR enrollment form and further information can be obtained from Gardiner Miller Arnold LLP by emailing bob.gardiner@gmalaw.ca.

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Noteworthy costs awards were recently released in Middlesex Condominium Corporation No. 232 v. Owners, which we cited as number 6 in our top 10 condo law cases of 2012 as follows:

Faced with an increasingly unhappy ownership, the board commenced an application for appointment of an administrator. The owners then requisitioned a meeting to remove directors, prompting the board to make an unsuccessful bid for the requisition meeting to be delayed until after the application for appointing an administrator was heard. The court ultimately dismissed the board’s application to appoint an administrator, finding that s. 131 of the Condo Act was designed as a last resort for condominiums in perilous circumstances and not as a way to allow a board that has lost the confidence of the owners to get their way regardless of the democratic will of the owners. The court has not yet released its decision on costs, but given this board’s brazen disregard for owners’ democratic rights, this seems like a suitable case for the directors to be held personally responsible for the legal costs as in Boily v. CCC 145 above. The tactics used by the corporation in this instance were despicable.

While it may not be clear from this description, the MCC 232 case is made up of two components decided by different judges: The board’s application for appointment of an administrator that was heard by Justice Carey and, second, the board’s motion heard by Justice Bryant for an injunction to restrain an owners’ meeting to remove the board until after the application for appointment of an administrator was decided. Both components were dismissed and the old board was removed and replaced. The rulings on costs were subsequently reserved until February 11, 2013.  We understand that leave to appeal these costs rulings is presently being sought.

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Following Stage 1 of Ontario’s Condo Act Review last fall, a findings report was issued in January 2013 by Canada's Public Policy Forum, the facilitators spearheading the review process.  That findings report is available for review.  See here for executive summary and here for full report.

Comments on this findings report are being received until March 11, 2013.

The report encompasses comments submitted by the public at large and at five information sessions held by the Minister at locations across Ontario, and includes findings of the 36-member citizen panel and four full-day stakeholder round-table sessions.

The report is well-written, thoughtful and demonstrates a deep understanding of a broad array of issues and problems that need to be looked at further and solved. Reading the full report is worthwhile, even if only to see that the single or small few problems faced by any single group are a mere drop in the bucket relative to the large number of issues affecting the various stakeholders in the condo community. The Condo Act is complex legislation that affects a lot of people and parties in very different ways.  Legislation of this magnitude deserves the type of comprehensive public review process now underway.

You can send your comments or suggestions directly to ONCONDO or use the handy Discussion Guide the PPF has prepared to help you organize your thoughts to comment meaningfully on the report. To help encourage you to participate, we reproduce the text of the salient part of the Discussion Guide below (while encouraging you to review the full guide):

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Although they have been in force for nearly 12 years, the regulations under the Condominium Act, 1998 have been available in English only. Thanks to recent amendments, our Francophone confederates can now rejoice that those regs include a complete French language version.

On November 22, 2012, the Ontario government filed Regulations 383/12 and 384/12, which amended Regulations 48/01 (“General”) and 49/01 ("Description and Registration”) respectively.  

In addition to adding French versions of the Condo Act regs, the recent amendments were intended to correct typographical errors and improve accuracy.  Most notably, the General regulation is amended to include improved definitions of the various classes of reserve fund studies.  The Regulatory Registry webpage points out that: “These amendments do not change the policy or intent of the regulations.”

While it is good to see that the Condo Act regulations are being fine-tuned from time to time, we remain hopeful that more substantial revision of the Act and regs is not far away.

Bonne lecture!

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While prorogation has brought legislative business at Queen's Park to a screeching halt (and which helpfully killed Bills 72 and 95 that would amend the Condo Act in weird ways), readers will be glad to know that Ontario's Condominium Act review and modernization process is steaming ahead.

At the cornerstone of this review process is the concept of collaborative public engagement, which is intended to solicit broad and direct input from citizens and the various stakeholders affected by the Condo Act. An important part of that process is the specially-chosen condo residents’ panel formed to discuss issues related to the Condo Act and provide advice on how to improve it. Panellists will work alongside a round-table of other condominium stakeholders to agree on a set of priority proposals for changing the Act.

From ten thousand randomly-selected Ontario condo dwellers who were initially invited to join the condo residents’ panel, 36 members were ultimately selected to achieve a balance of age, gender, geography, the number of years they have lived in a condominium, and the type of condo in which they live.

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Anyone visiting our office knows that we at GMA are big fans of adorning our walls with exquisite art, most of it painted by Bob Gardiner's dad, the late Perce M. Gardiner. 

In keeping with his role of curator of our office/musem, Bob offers this short update on a new posting requirement imposed by the Ministry of Labour, now in force at workplaces across Ontario. 

While the government-mandated posters are hardly masterpieces, no workplace is complete without them.

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The Ministry of Consumer Services is holding info sessions for the province's Condo Act review over the coming weeks in cities near you.

The first session will be held in Toronto this week.  Deets are below.

Our friends at @WB_Condo tweet that further sessions are planned for September 19 in Mississauga and September 27 in Ottawa.  More dates to come.

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In the weeks prior to the Canada Day long weekend, we heard news of another condo flag flap. In this latest incident, an Edmonton condo board levied a $250 fine against the owners of a condo unit for hanging on their balcony a wind sock featuring the Canadian flag.

The news story refers to a private members bill introduced in Parliament last fall which, if passed in its initial form, would have prohibited any person to prevent displaying the Canadian flag and subject such persons to injunctions, fines and a jail term of up to 2 years. The implications for condo boards and managers were unclear but of serious concern.

Just in time for Canada Day 2012, that private member’s bill, Bill C-288 (“An Act respecting the National Flag of Canada”) received Royal Assent on June 28, 2012 and is now law.

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One of our readers asks us:

Q: Our condo board recently requested a conciliation meeting with Tarion. We are still in the "pre-conciliation repair period." At what point should something be stated on our status certificates?

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One of the notable aspects of the 2012 federal budget is the plan to withdraw the penny from circulation as currency.

While its practical utility has diminished into irrelevancy over time, the copper coin has earned a special place in our lexicon. To be sure, check brainyquote.com's list of some of the most famous “penny quotes.” The ones most often heard in the realm of condominiums include:

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Ontario's Minister of Consumer Services, the Hon. Margarett Best, was a guest speaker last week at the real estate section of the Ontario Bar Association's annual Institute.  She spoke on the topic of "Do we need a new Condominium Act?"

The topic is timely, even though our Condo Act celebrated its 10th year in force just last year. Several parties have indicated displeasure with various aspects of the Act for some time and a lot has changed in 10 years.

Naturally, representatives of the real estate and condo law bars attended this special event, as did stakeholders like the Canadian Condominium Institute (represented by legislative commitee chair Armand Conant) and Association of Condominium Managers of Ontario (represented by President Dean McCabe).  See photo of the principal ringleaders, at bottom.

Like many conferences these days, the OBA Institute featured some live tweeting from participants in the sessions.   Here's a recap of some of the best tweets of the Minister's address.

I’m at real property session at @OBAToday's #Institute2012 to hear @OntarioConsumer minster @MargarettBest on “Do we need a new Condo Act?”

— Chris Jaglowitz (@chrisjaglowitz) February 9, 2012

This morning's Real Property Law, Condominiums, Clients and Closings: Handling a New Condo Purchase at #Institute2012 twitter.com/OBAtoday/statu…

— Ontario Bar Ass. (@OBAtoday) February 9, 2012

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In the 10 years that the Condominium Act, 1998 has been in force, the prescribed forms needed for the extraordinary events of a condominium’s life and its day to day operations have been reliably set out in the regulations under the Act.

Until now.

Effective September 1, 2011, the two regulations under the Condo Act were significantly amended. The biggest change is that all of the prescribed forms under those regulations are revoked and users are now referred instead to “the form that the Director of Titles specifies” or “the form that the Minister responsible for the administration of that subsection specifies.”

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In this final week before election day in Ontario, consider how the parties' positions on condominium issues might influence your vote.

ACMO and CCI-Toronto prepared an outstanding pre-election survey asking the three major political parties to state their positions on major condominium issues. 

See who is in favour of fair taxation for condos.

See who supports reopening the Condo Act.

See who can't seem to be bothered with condo issues. 

Click here to see the survey (pdf).

Be sure to get out there and vote on October 6.

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Earlier this year, we asked whether the Ontario Clean Energy Benefit was good, bad or ugly, or whether it would even apply to condominiums.  While the jury is still out on whether this rebate makes any sense, it doesn't take a rocket scientist to determine whether your eligible condominium corporation should apply for the rebate.  

The Association of Condominium Managers of Ontario (ACMO) recently posted good news that will be of interest to any condominium corporation in Ontario that receives a hydro bill.

To help spread the word to as many people as possible, the full text of ACMO’s news release is reproduced below.  Check it out.

Once again, hats off to ACMO and the Toronto chapter of the Canadian Condominium Institute for their ongoing advocacy for condo corporations and unit owners and for circulating this valuable information.

If your condo benefits from the information below, then consider joining your local chapter of CCI and make sure that your property manager is a member of ACMO.

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A serious injury or fatality occurring on a condominium’s common elements gives rise to a host of issues and things that must be done promptly. One notification that many condominium boards and managers might not consider making is to the Ministry of Labour, particularly if the injured person is not a employee or contractor performing work for the condominium corporation.

A recent decision of Ontario’s Divisional Court clarifies the obligation of employers to report to the Ministry of Labour (“MOL”) critical injuries or fatalities suffered by people at their workplace and confirms that the obligation extends to non-workers.

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May 5, 2011 marks the 10th anniversary of Ontario’s Condominium Act, 1998 coming into force.

While the Act received Royal Assent in December 1998 (hence the Act’s name), the government of the day felt that a short transition period (of 2 years, 4 months and 17 days!) was needed to ease everyone into the new regime. To be fair, the 1998 Act was a near-complete overhaul of the prior version which existed in substantially the same form since 1979. The 1979 version was the first revision since the proclamation of Ontario’s original Condo Act in 1967. The 1998 Act, then, was only the second major revision in 30 years of condominium law in this province. 

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By royal proclamation dated April 13, 2011, the Ontario Government announced that the Public Inquiries Act, 2009 will come into force on June 1, 2011. This act was one of the many hundreds of relatively minor legislative initiatives rolled into the behemoth omnibus bill known as the Good Government Act, 2009, parts of which have been coming into force since January 2010.

With the coming into force of the Public Inquiries Act, 2009, more than 50 Ontario statues will be slightly amended to make reference to this new act and delete references to the old act. Among those affected statutes is the Condominium Act, 1998, where amendments in relation to the powers of an inspector in section 130 will come into force on June 1 this year. We reported on these specific changes to the Condo Act in an entry dated December 21, 2009 under the heading “Powers of an Inspector.” 

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A bill now under consideration by the Ontario Legislature suggests that the concept of condominium managers becoming a self-regulated profession is not far-fetched. It may also signal that the time has come for condominium managers to step up their campaign for self-regulation.

Under Bill 138, the Registered Human Resources Professionals Act, 2010, the Human Resources Professionals Association of Ontario (“the Association”) would be established as the regulatory body charged with overseeing the human resources profession.

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In late July, the Ontario Government launched a survey to learn about the experiences of condominium unit owners across the province. This survey will likely have a significant impact on whether or not the government considers reforms to the Condominium Act.

The survey covers a broad range of condo issues, including:

• Disclosure before Purchase
• Governance / Decision making
• Repairs and Maintenance
• Reserve Funds & Planning
• Dispute Resolution / Interaction with Board
• Owners' knowledge of Condo Act

These are all issues with which every condo owner has at least some experience. To be sure, more than 3,100 owners have reportedly completed the survey to date.

In addition to giving owners the chance to air their beefs, the survey also offers a number of educational tidbits designed to clear up common misconceptions shared by unit owners. This feature alone makes the survey a worthwhile exercise for owners, even those that don’t have strong feelings about condo living.

The survey closes on October 31, so this is the final opportunity to participate and help government determine if legislative reform is required. You can participate online here or by telephone.

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Once every six blue moons, Tarion proposes a change to the Ontario New Home Warranty Plan that actually benefits purchasers of new homes without giving any kind of benefit to homebuilders or developers. This is one of those momentous, rare occasions.

In mid-October 2010, Tarion gave notice of its proposal to amend its regulations to combat the rather disreputable practice of a small number of condo developers that charge purchasers the [over]estimated municipal taxes or development charges for new units without refunding the difference if a lesser amount was actually paid to the municipality. This practice of developers pocketing the difference was described months ago in the regular newspaper column of Toronto real estate lawyer Bob Aaron. See his articles here and here. He called for some change to be made.

Luckily, Mr. Aaron is a member of the board of the Tarion Warranty Corporation and it seems that he has successfully persuaded Tarion to do something about this!

In the notice of the proposed amendment to its regulation, Tarion summarized the measure as follows:

Tarion would like to ensure that builders are not including charges as adjustments to the purchase price of a new home that have not actually been incurred by the builder. This amendment to the regulation will make the restriction of these charges a new term and condition of builder registration.

The actual proposed wording of the prohibition to be added to Tarion’s regulation is as follows:

The registrant shall not charge as an adjustment or readjustment to the purchase price of a home, any amount as reimbursement for a sum payable to a third party unless and to the extent such sum is ultimately paid to such third party.

This change, if passed, should persuade those few bad apple developers to stop the unfair practice of pocketing the difference between what they collect from purchasers and what they remit to municipalities or others. Indeed, a developer found in breach of this provision stands to lose their Tarion registration. While the proposed change does not provide a direct way for consumers to recover the difference, it should allow purchasers a certain amount of clout when negotiating with developers. It may also give rise to a legal right to sue a developer for that difference in court if need be.

Public input is being received until November 25, 2010. Comments can be submitted electronically through the Regulatory Registry on the ServiceOntario website.  Give your two cents today. 

Hats off to Bob Aaron and Tarion for taking this step to enhance consumer protection!

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Debtors and troublemakers are no longer immune from receiving legal process on the Lord’s Day.

Ontario’s long-standing prohibition against serving legal documents and enforcing court orders on Sundays was abolished amidst little fanfare as of December 15, 2009, when section 124 of the Courts of Justice Act was repealed by the Good Government Act, 2009.  This omnibus bill amended hundreds of Ontario statutes, including the Condo Act.

Before its repeal, section 124 read as follows:

No document shall be served and no order shall be executed on Sunday, except with leave of the court.

This development is of special interest to process servers, bailiffs and lawyers who go to sleep on Friday night thinking there are only two more working days until Monday.

Those who spend Sundays on more spiritual pursuits will recall that:

And if someone wants to sue you and take your tunic, let him have your cloak as well.

                                                                                                         – Matthew 5:40

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Another interesting lesson emerges from Jeffers v. YCC 98, the slander of title case we reported about earlier this year.

After dismissing the plaintiffs’ lawsuit at trial, the court ordered the plaintiffs (the unit owners) to pay about 50% of the legal costs incurred by the defendant condo corporation and the co-defendant bank.

Unsatisfied with that costs award, the condo made further submissions about why it should recover 100% of its legal costs from the unsuccessful unit owners. In support of that request, the condo relied on an offer to settle it had made during the litigation and also section 134(5) of the Condo Act, which provides as follows:

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This month’s news featured a horrifying story of a serious fire at the Millrise, a 159-unit condominium building in Calgary.   Luckily, no one was seriously hurt, but 300 people are homeless and the 3-story wooden building was subsequently condemned by the city as uninhabitable. 

We carried the following related news articles on our microblog, some of which feature video footage of the fire and resulting damage:

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At long last, the official electronic version of the Condominium Act, 1998 has been updated to show the latest amendments made in December 2009.  Most of those amendments were made by the Good Government Act, 2009, which amended over 300 Ontario statutes, and hence the long delay in updating the official electronic version of most statutes.

Condominium owners, directors and their professionals should always check to be sure they're consulting the latest version of legislation and regulations before making decisions.   The best way to do this is consult the Ontario Government's e-Laws website at www.e-laws.gov.on.ca.

At the top of every statute and regulation on e-Laws is a currency date, as well as a reference to the latest amendment.  See below picture.

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In a special update released this week, CCI-Toronto and ACMO announced that they have successfully lobbied the provincial government to amend the regulations under the Condo Act so that corporations registered before May 5, 2001 will have 15 years (not 10 years) from the date of their first reserve fund study to top-up their reserve funds.

[Update (March 7, 2010):  The regulation making this amendment is now published here.]

Condominium corporations existing as of May 1, 2001 were required to have their first official reserve fund study under the New Act within three years after that date. Generally speaking, that means that they must top up their reserve funds by the year 2016 or 2019.

CCI-Toronto and ACMO deserve kudos for securing this concession to help condo corporations offset the deleterious effects of the ever-looming HST.   We wish them well in their continued negotiations with government.

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In a decision dated January 27, 2010, the Ontario Energy Board ruled that Toronto Hydro breached the Electricity Act by refusing to connect hydro service to the bulk meters of new condominium projects unless all units in the condominium are individually smart-metered by Toronto Hydro and become a customer of Toronto Hydro.

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People trying to keep tabs on the legislative authority for suite submetering can’t even blink these days without the risk of being left in the dark!  

On December 8, 2009, the Ontario Government tabled Bill 235, an Act to enact the Energy Consumer Protection Act, 2009 and to amend other Acts.

If passed, Bill 235 will, among other things, repeal section 53.17 of the Electricity Act, 1998, which is the current authority for condominium boards to install smart meters and download electricity costs to individual unit owners. An entirely new section dealing with submetering and billing in multi-unit residential buildings will be passed, as well as a whole raft of regulations.

As with all recent energy and environmental initiatives, Bill 235 is expected to move forward quickly. Comments were to have been received by February 6, 2010.   The public consultation page is here, with links to additional information. The actual wording of the Bill and its legislative status is found here.

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Bob Gardiner reminds us that the grace period for the ban on hand-held devices while driving is coming to an end. 

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Now it is illegal for drivers to talk, text, type, dial or e-mail using Blackberrys, cellphones and similar hand-held devices.

Bill 118, the Countering Distracted Driving and Promoting Green Transportation Act, promoted by the Ministry of Transportation, took effect on October 26, 2009. A three-month probationary educational period will end February 1, 2010, when police will begin issuing tickets to offenders, resulting in fines of up to $500.

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Another small amendment to our Condo Act came into force on December 15, 2009, this time by virtue of Bill 218, the Ontario Tax Plan for More Jobs and Growth Act, 2009.

Clause (b) of the definition of "eligible security" in subsection 115(5) of the Condominium Act, 1998 is amended to include certain financial instruments issued by institutions located in Ontario insured by the Deposit Insurance Corporation of Ontario ("DICO").

Subsection 115(5) now reads as follows (with amendment underlined):

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The Ontario Legislature passed Bill 212, the Good Government Act, 2009 on December 3, 2009.   The bill received Royal Assent with very little fanfare on December 15, 2009 and is now law.

This omnibus bill is intended to modernize statutes by correcting errors and plugging loopholes.  It also does the following things:

• makes minor amendments to almost every Ontario statute, mostly by updating language and terminology
• repeals a few outdated or ineffective statutes
• makes significant improvements to the City of Toronto Act, 2006 and the Municipal Elections Act
• legalizes the until-recently covert process of conducting criminal records checks on jurors
• replaces the old Public Inquiries Act with a new one

The bill also makes three minor amendments to the Condominium Act, 1998 and a few small consequential changes to related statutes.   Here is a brief description of the changes:

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As of January 1, 2010, the maximum amount that can be claimed in an action in the Small Claims Court in Ontario will increase from $10,000 to $25,000.

This change, which we first reported here in December 2008, is intended to provide a faster and more affordable option for bringing civil disputes to court. The cost of filing a claim or other documents in Small Claims Court is relatively low, the rules of that court are less complex and the process is normally much simpler and often quicker than in the Superior Court of Justice. Legal fees for small claims proceedings are typically much lower as a result.

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The following guest entry by property manager and condo consultant Robert Buckler, RCM offers tips to property managers for dealing with the new ban on hand-held communication devices while driving. 

I can only add:  "Keep your eyes on the road and your hands upon the wheel!"

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Effective condominium managers spend more time communicating than in any other activity. They communicate by talking to board members, colleagues within the condominium management company, vendors, contractors, owners, potential services providers… the list goes on. Since condominium managers are often on the road, traveling between sites and the office or stuck in traffic, many of these conversations may take place on a cell phone, BlackBerry® or other mobile device.

As of October 26, 2009, Bill 118, a new law amending Ontario's Highway Traffic Act, comes into force. The legislation bans driving while holding or using a handheld wireless device of any kind, including devices used not just for voice conversations, but also texting, emailing, and even viewing the screen of a handheld GPS device.

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Anyone following the progress of Ontario’s Smart Metering Initiative and wondering how it applies to condominiums should read an August 2009 decision of the Ontario Energy Board (“OEB”) on smart sub-metering in rental buildings. See the decision here.

This case was commenced by the OEB on its own initiative as a stop-gap interim measure to try and guide a widespread frenzy of landlords outfitting their rental buildings with smart sub-metering equipment despite the fact that such installations have been expressly prohibited by law since 2005. Some landlords have actively begun downloading electricity costs to tenants, which is similarly illegal.

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A troubled condo project in Ottawa is being taken over this week by the developer’s major creditor. The Ottawa Citizen reports that this creditor announced it is terminating the existing purchase agreements and that:

The former purchasers of the condos were told they would receive their deposits back. But it’s not clear about other expenses, such as upgrades and fixtures that have already been purchased.

This situation illustrates that while a purchaser’s deposit for the purchase price is protected by section 81(1) of the Condominium Act, 1998 (“the Act”), not all monies paid to a developer are covered by this statutory requirement that money be held in trust by the developer’s lawyer or another trustee.

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The saga of the doomed luxury condo development at 1 Bloor in Toronto took an interesting turn earlier this month when the project was sold.

Great Gulf Homes announced that it had purchased the land at the corner of Yonge and Bloor Streets from developer Bazis International as part of a court-approved process to keep the project from falling into receivership. Bazis had initially purchased the land for $61 million but had defaulted on its loans before construction could begin.  

Despite the insolvency of the developer, those purchasers who braved the cold and lined up outside for days in late 2007 to buy units at 1 Bloor won’t lose a dime of their deposits (reportedly over $70 million). They can thank section 81 of the Condominium Act, 1998, which provides that deposits paid for the purchase of proposed condo units must be held in trust by a trustee or a law firm.  Section 82 provides that developers must pay interest on these deposits. 

Though their deposits are safe, those who purchased units at 1 Bloor are wondering what kind of condo they are going to get for their money.   The fate of the project won’t be known until after the sale to Great Gulf Homes closes in September but the new concept will probably be far less ambitious than the 80-storey, half-billion dollar skyscraper that was originally planned.  GMA's very own Gerry Miller shared his view on the project in this article in last Friday’s Globe and Mail.

Update (Sept 4/09):   Kris Scheuer of the Town Crier reports on her blog that 1 Bloor purchasers are now being refunded their deposits.

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Stark & Stark reports that the State of New York is considering legislation that will, if passed, require residential property managers to be certified by a state-approved certifying organization and then register with the state.

This approach may be an interesting hybrid between self-regulation and state regulation but, as with all legislative initiatives, the devil will be in the details (which can be seen here).

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Sections 132 and 134(2) of our Condominium Act make it mandatory for condo corporations and unit owners to mediate many types of disputes before proceeding to arbitration or commencing litigation. Among the disputes that must be mediated are disagreements over the declaration, by-laws or rules.

Despite the fact that mediation is mandatory in declaration, by-law and rule cases, this step is often by-passed where the parties don't agree on the selection of the mediator, as per section 132(1)(b) of the Condo Act.  This is a shame since the case will then proceed directly to arbitration and, in some instances, to court. The cost, complexity and level of animosity between the parties all increase sharply as the dispute progresses through the various stages. Early resolution  is almost always preferable.

In cases where mediation actually does take place, the likelihood of the dispute being resolved successfully depends heavily on a number of factors such as the skill of the mediator and counsel, the preparation and goodwill of the parties and, quite importantly, the ability of the parties to really listen to each other. Without proper preparation and anticipation of the likely concerns of the opposing party, mediation is often doomed to fail.

In a recent posting on the California HOA & Law Blog, attorney Beth Grimm shares her views on why mediation is the perfect way to solve condo disputes, why mediation often fails and what can be done to improve the odds of succeeding. Her comments are worth reading since they are perfectly applicable to condo disputes north of the 49th parallel.

Because mediation is mandatory for many condo disputes here in Ontario and since mediation represents an excellent opportunity to resolve disputes and heal divisions quickly and economically, board members, property managers and unit owners must equip themselves with the knowledge and tools to come to the mediation table to solve disputes.

Stay tuned in the coming weeks for more tips and insight into making the most of mediation.

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Readers keen on comparing Canadian and American condominium law should take note of a significant development south of the border, recently reported by attorney Mark Payne at Colorado HOA Law Blog.

In February 2009, the American Bar Association approved the Uniform Law Commission's proposed amendments to the Uniform Common Interest Ownership Act ("UCIOA").  This model law covers all aspects of common interest ownership and, as with all uniform model laws, was prepared by a national body of lawyers and stakeholders who then recommended its use in all American states. Each state may then choose whether to implement all, some or none of the model law, but model laws are commonly used in brainstorming and customizing new laws.

This set of amendments to UCIOA is the product of four years' work and is only the third revision of this model law that first emerged in 1982 as a combination of the Uniform Condominium Act (1980), Uniform Planned Community Act (1980), and the Model Real Estate Cooperatives Act (1981).   With the third set of amendments, the model law is now known colloquially as "UCIOA 3.0."  

UCIOA 3.0 contains prefatory notes that outline the history of the development of this model law and describe the effect of amendments made since the original law was adopted in 1982. 

In addition to numerous amendments dealing with owner/association issues, new features of UCIOA 3.0 provide:

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Condo unit owners and directors are often uninformed about their rights and responsibilities or about how condos work. This is largely due to a lack of comprehensive information online to address basic condo concepts.

A new website may help fill that void.

The Condo Information Centre (found at www.condoinformation.ca) was launched on June 30, 2009 by Anne-Marie Ambert, a retired university professor and condo director, who offers her knowledge of how condos work. Her site offers an impressive digest of original text and commentary on a number of topics, including:

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The following guest entry by local condo director Ernie Nyitrai is a call to action for other condo corporations and unit owners to lobby for amendment to the Assessment Act, which governs the municipal tax assessment regime in Ontario.  

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Condominiums, even though they have been around for quite some time in Ontario, have only modestly grown in the past and mostly only in urban areas. However, all that started to change in the late 1980’s when growth in condominium development began to expand. This growth increase almost seemed to double each year. In fact, in many urban areas, especially in the Greater Toronto Area, they have almost come to supplant single-family residences as the preferred form of residential accommodation. MacLeans magazine, in its December 31, 2007 issue, featuring real estate in Canada, postulated that half the people in urban Canada will be living in condos by 2025. 

This growth has led many urban municipalities to allocate an ever-increasingly larger proportion of residential building permits to condominium development. Since condominium developments, specifically high-rise condominiums, utilize less land area, they have also become an excellent planning tool for the urban municipality, enabling them to accommodate more people in a smaller land area.

Although this growth in condominium developments has increased, almost exponentially in recent times, one aspect of condominium life has not changed, namely assessment on condos for the purpose of municipal taxes.

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The proposed Green Energy Act (“GEA”) is moving forward quickly and will be considered in committee later this month. As it now reads, nothing in the GEA contemplates any amendment to the Condominium Act, 1998 (“the Condo Act”).

That may change, but not in a way we would like.

The Toronto Atmospheric Fund (“TAF”), together with a local condo developer and their respective lawyers, made a written submission to the Minister of Energy and Infrastructure on the implementation of the GEA. A copy of the submission is available here. [Hat tip to environmental law blogger Dianne Saxe.]

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Earlier this year the New York Times featured an article about miniature horses replacing guide dogs as “service animals” for people with certain types of disabilities.  (Hat tip to Daniel Zimberoff of the Northwest Condo & HOA Law Blog for passing it along.)  The article thoroughly discussed the several different types of service animals and the definition briefly and generally described the history of service animals:

“… [F]irst it was guide dogs for the blind; now it’s monkeys for quadriplegia and agoraphobia, guide miniature horses, a goat for muscular dystrophy, a parrot for psychosis and any number of animals for anxiety, including cats, ferrets, pigs, at least one iguana and a duck. They’re all showing up in stores and in restaurants, which is perfectly legal because the Americans With Disabilities Act (A.D.A.) requires that service animals be allowed wherever their owners want to go. …”

This New York Times article is of particular interest in light of the new Accessibility for Ontarians with Disabilities Act, 2005 (“AODA”), which came into force on January 1, 2008 and which affects most condos as private sector organizations that provide goods and services. The purpose of the AODA is described as follows at section 1:

Recognizing the history of discrimination against persons with disabilities in Ontario, the purpose of this Act is to benefit all Ontarians by,

(a) developing, implementing and enforcing accessibility standards in order to achieve accessibility for Ontarians with disabilities with respect to goods, services, facilities, accommodation, employment, buildings, structures and premises on or before January 1, 2025; and

(b) providing for the involvement of persons with disabilities, of the Government of Ontario and of representatives of industries and of various sectors of the economy in the development of the accessibility standards.

Section 9 of the AODA’s Regulation 427/07 establishes accessibility standards for customer service and prescribes the following criteria as to whether an animal is properly qualified as a service animal:

(a) if it is readily apparent that the animal is used by the person for reasons relating to his or her disability; or

(b) if the person provides a letter from a physician or nurse confirming that the person requires the animal for reasons relating to the disability.

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The Ontario Government unveiled its proposed Green Energy Act ("GEA") this week, amidst much fanfare.   According to the Ministry's News Release, the GEA should attract new investment, create new green economy jobs and better protect the climate.

While big on hype but short on specific details, the two main thrusts of the proposed GEA are described by the Ministry as:

• making it easier to bring renewable energy projects to life, and
• fostering a culture of conservation by assisting homeowners, government, schools and industrial employers to transition to lower energy use.

More info on the GEA is available here and here.

The idea of condominium corporations generating electricity from solar or wind power for their own use and selling the surplus is an interesting concept that may not be too far off.  Given the right incentives, any condo board would closely consider whatever green energy options may be available. 

One area of concern is the type of projects that unit owners may undertake on their own, especially if those projects affect other units, the common elements or life safety.   As with the regulation enacted last summer that permits the use of clotheslines and clothestrees where otherwise restricted, the proposed GEA will permit certain renewable energy projects to be undertaken notwithstanding restrictions imposed by municipal by-laws and condominium by-laws.  While it appears that section 117 of the Condominium Act ("no dangerous activities") will continue to prevail, we will be watching closely to see what comes of this.

For information on what steps you or your condominium corporation can take to save energy today, see The Ontario Energy Efficiency Resource Guide, which provides information about the many programs, financial incentives, and resources available to help Ontarians conserve energy and achieve greater energy efficiency.   View and download a PDF copy of the Guide here.

If your condo is currently planning or implementing a renewable energy project, post a comment and share the details.  

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In December 2008, the Premier of Ontario said that municipal property assessments issued last fall for the 2009-2012 tax years are "unrealistic" since resale values have significantly declined in recent months.  

Will there be a flood of objections and appeals in respect of these assessments? Time will tell, but seeing as how each condominium unit is treated as separate property for municipal tax assessment purposes, a large volume of appeals may be likely.   A 100-unit standard condominium could, for instance, give rise to 100 separate objections or appeals. With more than 5,000 condo corporations in the Greater Toronto Area alone, the number of appeals by condo unit owners alone could be astonishing.

In reality, obtaining expert representation to navigate the process and collecting the necessary market value data to use as evidence is not cheap. For that reason alone, most property owners do not appeal from their assessments.  

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It is time for the 2-year review of the City of Toronto Act, 2006.    

When this Act was proclaimed in force in January 2007, the Ministry of Municipal Affairs and Housing said that:

[The Act] recognizes Toronto as a responsible, accountable government. The city is now better able to determine the appropriate mechanisms for delivering municipal services, determine the appropriate levels of municipal spending, and use new fiscal tools to support the city’s activities.

What do you think?

Submissions and comments can be made to the Ministry online, by email or in writing.    

Speak now or forever hold your peace.

Hat tip to Toronto lawyer Rachel Loizos of the Move Smartly blog for spreading the word.

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Each year, the Canadian Commission on Building and Fire Codes (“CCBFC”) invites stakeholders and members of the public to participate in the review of proposed changes to six national model codes, including the following construction codes:

• National Building Code
• National Fire Code
• National Plumbing Code

These construction codes, last published in 2005 but subsequently amended and expected to be revised in 2010, form the basis of the construction codes of each of the provinces and territories to varying degrees. 

Builders and developers have an obvious vested interest in participating in the development and upkeep of these model construction codes, and so do the end users of most buildings, particularly condominiums.  Typical construction issues that affect interest condominium communities include soundproofing, building materials, energy efficiency and life safety.

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In a news release yesterday entitled “Resolving Lawsuits Faster and More Affordably,” the Ontario Ministry of the Attorney General announced a number of notable changes to the civil justice system.  Most of these changes stem from the Civil Justice Reform Project chaired by the Honourable Coulter Osborne, who released a report of findings and recommendations in November 2007.

Among the reforms announced this week is an increase in the monetary limit of the Small Claims Court to $25,000 from the current level of $10,000 and a doubling of the monetary limit for the simplified procedure in Superior Court to $100,000 from the current $50,000. 

These increases become effective on January 1, 2010, more than a full year from now.

While these increases in the monetary limits are decidedly positive, the long delay until they become effective bears some comment.

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Where a unit owner, tenant or a guest causes damage to an owner’s unit, section 105 of the Condominium Act, 1998 permits condo corporations to charge back certain repair costs by adding those costs as common expenses to that owner’s unit and collecting them by way of lien. Corporations can pass by-laws extending the circumstances under which they can charge back repair costs. The underlying concept is that an owner who is responsible for damage should pay any repair costs not covered by the corporation’s insurance.

This type of charge back is typically limited to the deductible amount under the corporation’s insurance policy, which can range from $500 to $10,000 for most water escape or fire claims. In larger condominiums or those with a poor claims history, the deductible can reach $50,000.

No matter what the amount, few owners can easily afford these charge backs. Thankfully, they can obtain insurance to significantly lessen the impact of such charge backs and protect their personal property and improvements to their unit, none of which are covered by the corporation's insurance.

The problem is that a surprisingly large number of owners do not secure proper insurance because they do not understand the limitations of the corporation’s insurance and mistakenly assume that they don't need to obtain their own coverage.  The truth emerges very quickly in the aftermath of a water escape or fire, but too late.   

Failure to obtain proper insurance can result in a crippling financial burden that can rob owners and their families of their financial security and their home. There are few things as heartbreaking or as avoidable.

Condo boards and managers should take concrete steps to help educate their unit owners about insurance on an ongoing basis and especially when new standard unit by-laws or insurance deductible by-laws are proposed.  Here are some ideas:

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Before 2004, a person in Ontario who suffered a loss typically had six years within which to commence a civil lawsuit to seek compensation or recover damages for the loss. With the enactment of the Limitations Act, 2002 (“the Act”), the old six-year limitation period was reduced to two years for losses (or "claims") discovered on or after January 1, 2004.

Under the old limitations law, the courts exercised significant discretion as to when the limitation period began to run and whether it could be extended in order to achieve fairness in appropriate cases, such as where a plaintiff’s lawyer failed to issue the lawsuit on time due to a miscalculation or an oversight. This discretion is known as the doctrine of “special circumstances.” While the enactment of the new Act significantly changed the law of limitations, the courts continued to apply the “special circumstances” doctrine in a number of cases. An important June 2008 ruling of the Ontario Court of Appeal has now put an end to that.

In Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, a case where the plaintiff’s lawyer issued the lawsuit almost two months after the expiry of the limitation period because of an oversight, the Court of Appeal washed away the old doctrine of special circumstances for most claims arising after January 2004 and confirmed the principle that the two-year limit is a firm two-year limit, subject to any specific exceptions in the Act. The Court found that the aim of the new Act is “to balance the right of claimants to sue with the right of defendants to have some certainty and finality in managing their affairs.”

The result of this decision is that where a plaintiff commences a lawsuit after the expiry of the applicable limitation period, regardless of the reason, the lawsuit will most likely be statute-barred and dismissed. It appears that certainty for defendants has prevailed over fairness for plaintiffs.

While some pre-2004 claims are still subject to the old six-year limitation period, most claims discovered between January 2004 and October 2006 are now (as of October 2008) probably already statute-barred. Parties with claims discovered in 2006 and 2007 are in serious danger of losing their right to sue, as is anyone that does not understand that a lawsuit must be commenced within two years of discovering a claim.

The lesson: Carefully consider whether your condo might have claims that need to be dealt with and move them forward promptly. Incoming condo boards or managers need to get up to speed immediately upon taking office and determine whether any claims need to be acted upon and to do so quickly.

The limitations clock is ticking.

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Yes, an Environmental SWAT Team does exist.

The City of Toronto began charging a fee on garbage collected at condominium and other mult-residential buildings on July 1, 2008.   The basis for this fee, besides the promotion of recycling, likely stems from Regulation 103/94, a long ago enacted and historically dormant 1994 Regulation under the Ontario Environmental Protection Act,

Regulation 103/94 calls for the implementation of “Source Separation Programs” in all multi-unit residential buildings across Ontario; however the Ministry of the Environment did not have a system in place to monitor conformity.  Therefore in 2001 an Environmental SWAT Team  (now called the Sector Compliance Branch) was dispatched by the Ministry to undertake inspections of multi-unit residential buildings for compliance with the Regulation's Source Separation Program in cities across Ontario.  The SWAT team’s initial efforts were described by the Ministry as follows:

"The team began its inspections of multi-unit residences on July 31, 2001 and continued with its inspections for four weeks. Working from lists provided by the City of Toronto, the team targeted multi-unit residences in Toronto (focusing on Scarborough and North York) that were suspected to be in non-compliance. The team then expanded its inspections to the areas of Ottawa, Kingston and Belleville. In total, they conducted 103 inspections." 

A “Source Separation Program,” under section 2(1) of the Regulation, must include:

• the provision of facilities for the collection, handling and storage of source separated wastes described in subsection (2) adequate for the quantities of anticipated wastes;
• measures to ensure that the source separated wastes that are collected are removed;
• the provision of information to users and potential users of the program describing the performance of the program and encouraging effective source separation of waste and full use of the program;
• reasonable efforts to ensure that full use is made of the program and that the separated waste is reused or recycled.

Section 10 of the Regulation defines multi-unit residential buildings as those with 6 or more dwelling units located in municipalities with a population of at least 5000. An “owner” of a multi-unit residential building is deemed to include “a condominium corporation created under the Condominium Act.”   And condos should be sure to follow the above guidelines at a minimum.

A good start in implementing a Source Separation Program is to launch an effective recycling regime in the building. There is no charge in Toronto for the collection of any volume of recyclable material and the City has made recyclable collection extremely user friendly by dispensing with the sorting requirement.  Recyclable material collected from condo buildings is now sorted mechanically at a sorting facility. The City has also made the transition easier by publishing a Recycling Handbook for Owners, Property Managers and Superintendents  to help implement the Source Separation Program in Toronto. 

So far, condos and other multi-residential buildings have been free to self-govern their building’s compliance with Regulation 103/94.    The actual fees charged for garbage collection are still in flux.  The garbage fees themselves may be enough of an incentive for a condo corporation in Toronto to implement and monitor Source Separation Programs in their buildings. We hope that our condo friends outside of the GTA have begun to implement their own Source Separation Programs so that if the SWAT comes knocking on the door, they are met with a clean and green building.

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 The Government of Ontario recently introduced Bill 108 - "An Act respecting Apologies." 

According to the Attorney General's news release, the Apology Act would, if passed:

• Allow individuals and organizations, such as hospitals and other public institutions (or condo corproations), to apologize for an accident or wrongdoing without fear of the apology being used as evidence of liability in a civil lawsuit
• Help victims by acknowledging that harm has been done to them — an apology is often key to the healing process
• Promote accountability, transparency and patient safety by allowing open and frank discussions between patients and health care providers
• Enhance the affordability and speed of the justice system by fostering the resolution of civil disputes and shortening or avoiding litigation.

Several other provinces and states have passed similar legislation and there has been growing call for such a law to be introduced here so as to help minimize conflict and disputes.   Indeed, the bill has the support of the legal and medical professions:

“Apology legislation would help to foster better communication and more compassionate relations between potential litigants,” said Jamie Trimble, President of the Ontario Bar Association. “An apology should not be something that can be used in a lawsuit later on to establish the liability of another party, nor should it be able to be used by one party to prevent the ability of another to seek justice.”

We've all heard about long and drawn-out lawsuits over disputes that reportedly could have been resolved at the very beginning with a simple apology.  Only time will tell whether apology laws have an appreciable effect on the number of disputes ending up in our courts or whether people begin to apologize more freely to each other.   We all hope that legislation like this is a step in the right direction towards creating a more civil society.

Update (July 17, 2009):   The Apology Act, 2009 was passed and came into force in April 2009.  See here for full text.

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