The 19th annual ACMO/CCI Condominium Conference was held November 13-14, 2015 in Toronto. Over 1,600 attendees (including condo owners, directors, property managers, lawyers and other industry members) took the opportunity to network, meet exhibitors for updates on the latest condo products and services, attend professional development sessions and learn from industry experts.
Over two days, the conference ran various breakout sessions on a wide array topics including proposed changes to Ontario’s Condominium Act (“the Act”), insurance, manager relations and governance and others that impact the more than 1.3 million condominium residents in Ontario.
Here are some of the key takeaways from the sessions I attended.
Bill 106 – The Latest Updates
- The goal of Bill 106 is to correct the power imbalance between boards and owners and to make the condominium dispute resolution process easier to navigate and less costly.
- The Condominium Authority will not be ready until 2018 or 2019.
- The implementation of the Condominium Authority is a four stage process. We are currently in phase one, which involves the establishment of an advisory group. The advisory group is a panel of experts in the condominium sector that is helping the ministry fully understand the issues that are raised during the review of the Act and advising on the process in general.
- Bill 106 proposes mandated procedure, content and form for proxies and owner requisitions.
1C – Monster Condo
- With large, mixed use condominiums (i.e. condominiums possessing both commercial and residential units) it is important to know what you own and where your property boundaries lie.
- Fire alarms no longer automatically go off in all units of modern buildings; rather, alarms may be isolated to the units that are affected by a fire issue. It is important to educate residents about different fire alarms and alerts. This can be done through town hall meetings and customized videos.
- There are strict deadlines for the amending or terminating of cost-sharing agreements. Also, cost-sharing agreements cannot be amended or terminated unilaterally; rather, a court application is required under s. 113 of the Act. The court may make an order amending or terminating the agreement where: 1) the disclosure statement did not clearly and adequately disclose the provisions of the agreement and 2) the agreement or any of its provisions produces a result that is oppressive or unconscionably prejudicial to the corporation or any of the owners
- Condominium assets should be appraised for insurance purposes.
- Boards should be telling owners what they need to hear, not what they want to hear.
- It is recommended that board members agree to the CCI ethics contract. Although under the current Act, such a contract is unenforceable, the new legislation looks to change this.
- The courts’ guiding principle when deciding on condominium disputes is that parties have to live together as neighbours for a long time even after the legal battle has concluded.
2A/B – Rapid Fire Legal (moderated by GMA’s Chris Jaglowitz)
- On January 1, 2016, new standards under the Accessibility for Ontarians with Disabilities Act, 2005 will come into force.
- Where an owner has claimed disability requiring accommodation, the condominium corporation should first request proper medical evidence from the owner.
- Condominium corporations should look at their reserve funds regarding additional costs of renovations for disability accommodations.
- An owner who requests disability accommodation cannot subsequently claim confidentiality over medical evidence demonstrating the disability.
- Courts have found rules placing weight restrictions on dogs to be reasonable.
- Condominium corporations’ standard nuisance rule can be invoked to address the issue of smoking.
- A specific smoking prohibition rule has yet to be tested in court. Usually it is advisable to avoid litigation, but we may eventually need court guidance regarding the issue of smoking.
- The Condominium Authority under the new legislation aims to be a more accessible and cost-effective means of condominium dispute resolution.
- The Condominium Authority Tribunal under the new legislation will have the jurisdiction to adjudicate on such issues as fees and fines and the enforcement of condominium documents.
- In British Columbia, the Tribunal is being paid for by taxpayers. The question in Ontario is whether the Tribunal should be funded through an increase to the monthly common expenses of every condominium unit owner.
3C – Condo Health and Safety: Current Perspectives (featuring GMA’s Andrea Lusk)
- The Ontario Health and Safety Act (“OHSA”) applies to anyone being paid to work at a condominium.
- Mandatory health and safety training is to be provided to all workers. All such training should be documented.
- It is the condominium/constructor/employer’s duty to take every reasonable precaution to prevent injury.
- If an owner acts as a “constructor”, he/she must be properly insured.
- An owner must register with the Ministry of Labour (“MOL”) when undertaking a “project” costing over $50,000.
- You should allow your lawyer to review reports regarding workplace injuries before sending them to the MOL.
- A condominium corporation has no right to remain silent when questioned in an MOL investigation. However, there is a right way and wrong way to answer questions.
- When there is an investigation, it is important to get legal advice in order to benefit from solicitor-client privilege.
- Do not obstruct MOL investigators.
- Condominium corporations should hire professionals to help fix workplace injury issues rather than just waiting for the MOL investigation.
- Condominium corporations should establish, implement and monitor safety policies and procedures.
- There is no double jeopardy in terms of being charged for infractions under the OHSA and Criminal Code of Canada.
4A – Status Certificates – Managers and Condo Corp Liability – It’s a Nightmare!
- Status certificates are binding against condominium corporations as well as the purchasers and mortgagees who rely on them.
- The property manager should send the status certificate to the condominium corporation’s lawyer annually to ensure adequacy.
- It is better for a property manager rather than non-professional board members to prepare a status certificate.
- If a status certificate is found to be inaccurate, the board may be held liable where it possessed information that was not disclosed.
- If a property management agreement has an indemnity provision, the board may be on the hook for an inaccurate status certificate. It is important for a condominium corporation to carefully review the management agreement.
- There is a required form for status certificates, so there should be a good reason if adding to a status certificate.
- If the condominium corporation performs an inspection, put a disclaimer in the status certificate that the inspection is for a limited purpose. Otherwise, a condo corporation may be liable if an inspection is performed and an issue is missed.
- In Orr v. MTCC 1056, the condominium corporation’s status certificate included a statement that there were no issues concerning the declaration. When an issue emerged, the corporation was found liable and was responsible for several hundreds of thousands of dollars in damages.
- Regulations under Bill 106 may change the form of status certificates.
5B – ACMO Leading the Way – Licensing of Condominium Managers
- Under the new legislation, there will be:
- New governance requirements for chargebacks, meetings, notices to owners, and procurement processes;
- More work for property managers;
- A reduced quorum requirement of 15% for annual general meetings after three failed attempts to obtain quorum; and
- New notices to owners, including for status certificates, budgets and anticipated over-expenditures.
- The new legislation, and the Condo Authority Tribunal thereunder, hopes to address the lack of uniformity in the condominium mediation/arbitration process under the current Act.
- When considering dispute resolution in a condominium context, ask what’s the value of avoiding a dispute.
- Under proposed new Condominium Management Services Act, condominium managers will need to be licensed. This licensing process looks very similar to the program for Registered Condominium Managers (“RCM”). There will be grandfathering for RCMs.
Case Law Update
- If an owner is acting unreasonably, a meeting or mediation/arbitration regarding a noise/nuisance issue may be futile. A court application would be necessary. That being said, the judiciary seems to favour the mediation/arbitration process as a first step and has awarded costs against a condominium corporation for failing to utilize this process.
- It is the condominium corporation’s duty to step in where there is a violation of the Act or condominium documents.
- Where an owner requests accommodation on the basis of a disability, it is the condominium corporation’s duty to ascertain whether the owner has a disability, and if so, accommodate to the point of undue hardship.
- There is a reasonable expectation of privacy in the common elements of a condominium corporation. In R v. White, evidence was precluded where police were found to have obtained such evidence via trespass on the common elements.
- Condominium corporations can allow police on the common elements if the purpose for the entry is known and consistent with the condominium corporation’s operations and duties.
- Under the Personal Information Protection and Electronic Documents Act, a condominium corporation cannot disclose to the police personal information about owners without consent, except where the police provide a subpoena or warrant.
- Whenever a claimant is settling a common element deficiency claim, the release should be signed off by the corporation and owner.
- For an owner to use the oppression remedy to address the failure of a condominium corporation to undertake maintenance and repairs, there must be a breach of the reasonable expectation of the owner regarding such maintenance and repairs.
- Condominium corporations should avoid undue delay in undertaking maintenance and repairs.
- A reasonably prudent director would not antagonize or undermine a board. This is bad faith.
- Each director has the duty to support the decisions of the board.
- The standard of care for directors is what a reasonably prudent person would do in comparable circumstances.
Thanks to all the speakers and exhibitors for a great conference. Be sure to save the date for the 20th annual conference on November 11 and 12, 2016!