Real Estate

Buyer protection, dispute resolution central to new condo laws

By AdvocateDaily.com Staff

Following explosive growth in Ontario’s condominium industry over the last two decades, legislative changes are on the way that will hopefully help protect consumers in a number of areas, Toronto condominium lawyer Armand Conant tells The Condominium Report with Joe Vero on AM 640.

Conant, partner and head of the condominium law group at Shibley Righton LLP, tells listeners that in the last 25 years, Ontario's condo industry has grown from a small number of condo corporations to over 10,000, with more than 1.5 million Ontarians living in condos.

As a result, he explains, disputes have become more complex, requiring further mechanisms to try to achieve a balance between individual unit owners versus the condo board and corporation as well as with the cost of dispute resolution.

Additional consumer protection for those buying condos is also needed, says Conant, in the form of adequate disclosure in the documents that are given to purchasers.

For example, there has been a trend in the last 15 years towards developers downloading certain costs to corporations, he says.

“No owner sees that when they’re buying, and all of a sudden the corporation is going to have to find $10 million to buy their own party room from the developer. It was disclosed, and that’s really where we see the shortcoming, where we’ve got to get better information to buyers so they understand what they’re buying — what is a condo, what does it mean to own a condo and live in a condo? — and go from there.”

As a result, Conant tells listeners, over the last number of years, various organizations have worked with the government to try to change Ontario’s condominium legislation, looking specifically at consumer protection, the condo authority, dispute resolution, financial management/governance, as well as licensing of managers.

“So that’s been working through the last eight years, and then about three years ago is when they stepped up and announced the formal reform to the Condo Act and the licensing of condo managers,” he says.

“The industry has been asking for years that there should be licensing, self-regulation of condo managers — they are highly trained professionals that are running a lot of the day-to-day operations of a condo corporation, handling large amounts of money, they are highly trained and should be deemed to be professionals and licensed,” Conant adds.

Under the new legislation, the Condominium Management Regulatory Authority of Ontario (CMRAO) will be responsible for licensing and regulating condominium managers and management companies.

Meanwhile, the Condominium Authority of Ontario (CAO) will provide public education, develop a mandatory course for members of condominium boards of directors on topics like governance and how to run a meeting, and maintain a database of all condos in Ontario.

But primarily, says Conant, who has been appointed a founding/first director of the CAO, the condo authority will administer a tribunal tasked with settling common disputes.

“We’re working on creating a very, very robust computerized online dispute resolution mechanism because once you’re in that dispute, we want you to get information, facilitation, try to resolve it before you get into a heated fight. But if you have to go into that fight, let’s get you through it cheaper, faster and better.”

Bill 106 — which encompasses the Protecting Condominium Owners Act, 2015 and the Condominium Management Services Act, 2015, received royal assent in December 2015 and the government is currently drafting the regulations.

“The regulations have become far more complicated than anticipated. What they’ve done this time is they’ve gone what we call ‘skeletal’ — lighter on the legislation, much heavier on regulation, because it’s easier to amend regulations. But because of that, it’s become so complicated that it's taking longer," he says.

Conant tells listeners that he hopes the government will be phasing in parts of the regulations, likely by the spring.

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