In late September, stage 2 of Ontario’s Condominium Act Review came to a close with the issuance of a Solutions Report.

This report is the product of condo residents, stakeholders and experts closely considering the various concepts and problems identified in stage 1 of the review process and devising specific and often creative solutions to address them. Working groups were struck to cover each of the five main topics identified early in the review process (being consumer protection, governance, financial management, dispute resolution and condo manager qualifications) and they worked over the summer to formulate solutions that were then vetted by an expert panel.

Of the more than 100 recommendations presented in the Solutions Report, most are much-needed clarification or tweaking of the current statute, but some are much more profound, including:

Creation of the “Condo Office”:

An umbrella organization be created with government-delegated authority to carry out four main functions:

• Fill the urgent need for better education and awareness for condo purchasers, owners, occupants and directors;
• Facilitate dispute resolution by offering decision-making and case evaluation;
• Oversee licensing of condo managers; and
• Create and maintain a condo registry.

Added Consumer Protection:

Developers be prohibited from selling or leasing back assets or components to the condominium corporation that would typically be part of the common elements, such as superintendents’ suites, HVAC components and so forth, but not carefully disclosed green energy or energy-efficient equipment intended to benefit residents.

Developers be prohibited from artificially decreasing first-year common expenses by deferring operating expenses or other costs to a later year, a common practice nowadays that causes fees to rise sharply after the units are sold.

Clearer Financial Management:

Boards be required to present two annual budgets, an operating budget and a reserve fund budget, and be required to notify owners of significant off-budget spending from the operating fund or reserve fund.

Improved Dispute Resolution:

Create a “Quick Decision Maker” at the Condo Office to handle small but important disputes in a simple, fast, summary way.

Create a Dispute Resolution Office at the Condo Office to provide early neutral evaluation and settlement assistance in more complex cases and decision-making in unopposed rule enforcement cases;

Clarify and streamline the processes for moving other disputes through mediation, arbitration and the courts.

Better Governance:

Lower the threshold for quorum at condo meetings to allow condominiums to pass by-laws and make other significant changes.

Abolish the pesky owner-occupied director position on the board.

Increase the qualifications for condo directors, including mandatory condo education.

Licensed, Qualified Condo Managers:

License condo managers and impose ethical, educational and insurance requirements.

Establish a delegated administrative authority to oversee the licensing process.

Require condo management firms to be registered, certified and  carry sufficient insurance.

The public is invited to comment on the Solutions Report until November 8 using the interactive tool on the Public Policy Forum website.

Because the Solutions Report covers the recommendations in relatively broad strokes, Condo Act keeners may be interested to see much more detail, including the considerations, rationale and alternatives for the various concepts. To get that greater insight before making your comments on the Solutions Report, see the “Working Group Outcomes” for each of the working groups, located on the PPF website.

Government will consider any comments on the Solutions Report that are submitted by November 8 and devise an action plan. While government has and will be accepting comments at all points throughout the entire process, now is the time to comment on the directions raised in the Solutions Report.

There is plenty to talk about, given the large number and breadth of the recommendations contained in the Solutions Report, but here are a few of my thoughts on selected topics to help fuel some discussion and to get your creative juices flowing:

On the Condo Office as an Information Resource: The single largest improvement in condominium living and administration in Ontario might well be the creation of an impartial office that creates and disseminates high-quality information to condo purchasers, residents and directors in easily-accessible ways for no charge. The various working groups and expert panel are convinced that this information resource will help people make better choices and avoid disputes.

On the Condo Office as Dispute Resolution Resource: The proposed Quick Decision Maker will provide simple, fast and cheap adjudication of minor disputes and the Dispute Resolution Office will provide badly-needed evaluation and assistance for owners and boards that will help resolve more complex disputes before they must proceed to further steps. Though some have called for the Condo Office to adjudicate all condo disputes (in the same way that the Landlord and Tenant Board is one-stop shopping location for landlord/tenant disputes), condo disputes can be far more voluminous and complex than can be handled by a single body designed to handle relatively simple disputes. The comparison to the Landlord and Tenant Board is not apples to apples. That said, the Solutions Report points out that the creation of the Condo Office is ambitious and that the new office will need to evolve and grow into its role. Given that one of its functions is to gather statistics on disputes, it is entirely possible that the Condo Office may, with time and experience, roll out additional services and features.

On regulating Condo Managers: No one is more glad than the condo managers themselves that mandatory qualification and licensing is now taking root, but the managers are rightly concerned as to the form of the delegated administrative authority and how it will be constituted and governed. Some owners’ groups say that managers should not be self-regulated but overseen instead by a consumer-led watchdog, but this completely ignores the fact that accountants, lawyers, engineers, teachers, healthcare workers and other professions and trades regulate themselves. No compelling reason has yet been raised as to why condo managers should not be permitted to self-regulate in the same way as those many other groups.

On dealing with tenants: The Solutions Report identified rule enforcement against tenants as a matter requiring further study, for the simple fact that landlord and tenant groups did not participate in this stage of the review. Further complicating this aspect is the fact that landlord/tenant law and condominium law are governed by two separate statutes and administered by different ministries. Given the massive increase in the number of tenant-occupied condo units in recent years and the inevitable explosion in that number over the next 2 years alone, we stand at the brink of a potential cataclysm. If the process for enforcing condo rules against tenants is not definitively and decisively addressed and improved as part of this review and the coming revisions to the Condominium Act, the scale and impact of that failure might overshadow almost every benefit and improvement to come out of this process. Though it will take more hard work, courage and strong leadership, the Ministry of Consumer Services must see this aspect through to the end for the benefit of all condo occupants, including owners, landlords and tenants alike.

On land registry and condominium documents: One of the reasons condo purchasers and occupants are not adequately familiar with or comfortable handling their condominium documents stems from seemingly minor but practically significant shortcomings in Ontario’s land registry system. Because land registry is not governed by the Condominium Act and is not administered by the Ministry of Consumer Services, an effort must be made to reach out to the appropriate ministry (Ministry of Government Services) and the for-profit company holding a 50-year government-sanctioned monopoly for running the land registration system to improve how condominium documents are registered, accessed, deleted and otherwise handled.

Having served on two of the working groups (Dispute Resolution and Condo Management) and having sat on the expert panel, I had the great privilege of working alongside a group of distinguished and talented individuals who worked hard towards the common goal of improving our condo law for the benefit of all stakeholders. While some commentators criticise the involvement of lawyers, consultants, managers and organizations like Canadian Condominium Institute and Association of Condominium Managers of Ontario in the working groups and expert panel as self-serving, a close review of the recommendations in the Solutions Report will quickly dispel that claim and show that condominium-owning consumers stand to benefit immensely from this monumental effort.

I, for one, am very proud to have been part of this process and of the fine work now presented for your consideration. I also credit the Ministry of Consumer Services for its leadership in this unique civic engagement process and the Public Policy Forum for expertly facilitating this project that involves a complex, multi-faceted statute requiring careful balance of several competing interests.

Please take the time to review the report carefully and submit your comments by November 8.