Helping condo legislation keep pace with growth
By Mia Clarke, Associate Editor
When Toronto condominium lawyer Armand Conant began in the condo industry more than 25 years ago, there were fewer than 1,000 condo corporations in the city.
There are now more than 2,500, says Conant, partner with Shibley Righton LLP. And that’s just within the city of Toronto. More than 1.5 million Ontarians now live in condos, according to a recent Globe and Mail story.
With that kind of growth comes the inevitable growing pains, Conant tells AdvocateDaily.com.
“In some ways, the industry became a victim of its own success and the legislation had a tough time keeping up with the phenomenal growth,” he says.
“In the mid-1990s, when the current legislation was being drafted, nobody could have anticipated the incredible growth. They couldn’t have envisioned the legislative tools needed to keep pace and deal with the growing complexity of the industry.”
Within a few years of the current legislation becoming law in May 2001 — and despite the improvements it provided — it became apparent that further legislative reform was needed, says Conant.
The government started reviewing the Condominium Act, 1998 in 2012 "with a new and innovative procedure that started with broad-based public engagement," he explains.
After considerable consultation and the work of numerous committees, the government introduced Bill 106 in early 2015. The bill, known as the Protecting Condominium Owners Act, 2015 (PCOA), received Royal Assent in December 2015.
“The bill covers three main areas,” says Conant. “The first substantially reforms — but doesn't replace — the current legislation and its regulations. Next is the mandatory licensing of condo property managers, under a new statute called the Condominium Management Services Act, 2015 (CMSA). And the third is reforms to the Tarion warranty coverage.
“There was never any Tarion coverage for conversions — only for new builds. Bill 106 is amending the legislation so that there will be some coverage for conversions.”
The PCOA, explains Conant, does not become law until the draft regulations have been passed. The regulations are set to be phased in so that corresponding portions of the amendments to the Act can be proclaimed into law. The balance of the PCOA can then be phased in as the regulations are passed, which Conant says is hoped to be completed in 2018.
He adds that Phase I of the regulations for the reforms to the Act, which will come into effect this fall, will impact directors, owners and corporations. It will focus on communication from boards to owners; governance; mandatory training of directors; and the creation of the Condominium Authority of Ontario, which will open its doors for limited services on Sept. 1, and the Condominium Authority Tribunal, which will begin Nov. 1 for the issue of corporation records and access to them.
“In the 1990s, the regulations were sizable, but they weren’t huge. Most of the details were in the Act rather than the regulations,” he says. “This time around, most of the details are in the regulations. They did that on purpose because regulations are easier to change than legislation.”
Conant believes Bill 106 addresses the issues within the industry “fairly well.”
“The drafters really did try to understand the condominium industry,” he says. “They dove in, they studied, they analyzed. So far, I think they’ve done a good job. Are there problems? Of course there are, as already people are starting to comment on certain provisions. That inevitably happens with all new legislation.
While it may not solve all the industry’s problems, it is a big improvement, says Conant, who’s been a member of all the government committees involved in reforming the Condo Act. He was also appointed one of the founding directors of the Condominium Authority of Ontario.
With so many people now living in condos, the changes are particularly important. Conant says approximately half of all residential sales in downtown Toronto are condos.
The industry has certainly come a long way since condos were "made legally possible" in 1967, reports the Globe and Mail. From relative obscurity, condos have transformed many Toronto neighbourhoods.
With the city’s red-hot housing market pricing new homes out of the grasp of many, condos continue to be a more affordable option. According to another Globe and Mail story, as of mid-July, the average condo was still $503,188 cheaper than the average detached house in the Greater Toronto Area.
Conant says reforms to the Condo Act will help protect consumers trying to realize their dreams of home ownership and will make all communities more harmonious to live in.
“Don’t forget that the real impetus for all the reforms is consumer protection,” he says. “That means protection for first-time buyers from developers and it also protects people who own units and live in condominium communities. These reforms are trying to enhance consumer protection for all aspects of the condo industry.”