The Purpose of this Update
Condo directors will no doubt have heard about some of the changes being made to condominium legislation in Ontario.
This update is to provide a brief summary of where we stand in September of 2017. It is important in our view that directors have at least a working knowledge of the issues involved, as many changes are due to come into effect in November 2017 as you will see below.
The information in this update is only an overview. For example, there are many exceptions and transition issues which are not fully explained here. Directors may need to consult further with property management and/or the condominium's legal counsel for more information on specific issues.
Note below the various references to standardized forms. As of the date of this writing, no such standardized forms have been published.
What is the 'New Condo Act?'
In a nutshell, the 'New Condo Act' was enacted as Bill 106, Protecting Condominium Owners Act, 2015. This Act amends the Condominium Act, 1998 as well as enacts the Condominium Management Services Act, 2015.
How did we get here?
Reform of the condominium legislation has been discussed for many years. This resulted in consultations with the public and the process essentially has evolved as follows:
- Since mid-2012: Various consultations with condominium industry and the public
- May 27, 2015: Introduced for first reading
- October 7, 2015: Passes second reading
- December 2, 2015: Passes third reading
- December 3, 2015: Bill 106 received Royal Assent
- Not yet proclaimed into force
- **IMPORTANT – only certain portions of the legislation is scheduled to come into effect in 2017
2. CONDOMINIUM ACT, 1998 CHANGES – THE FIRST PHASE
It is anticipated that the first phase of Condominium Act changes, relating to the broad categories below, will come into force on November 1, 2017. These are essentially the portions of the Condominium Act, 1998 for which regulations have been finalized. Other provisions in the Condominium Act, 1998 would come into effect at some unknown future date(s).
The broad categories in the first phase of the Condominium Act, 1998 changes are:
- Director Disclosures and Training
- Communications to Owners
- Meetings and Voting
Each of these will be addressed in turn below.
A. Director Disclosures and Training
Candidates for election to the Board, as well as elected directors now have disclosure obligations to the Corporation and to the unit owners. Directors will now also be required to have "director training".
Disclosure Obligations for Candidates
When a preliminary notice of meeting is sent for a meeting that includes the election of directors (see below re: 'preliminary notice'), individuals providing notice of their intent to be a candidate would be required to include a statement including the required disclosure. The disclosure would then be included with the notice of meeting.
If the candidate does not provide a notice of intent to be a candidate or the required disclosure in advance, then the candidate would need to make the disclosure at the meeting.
What's in the disclosure? The list is lengthy, but includes information regarding legal proceedings involving both the candidate and the corporation, information on any convictions under the Act or Regulations, disclosure of interests in contracts and transactions involving the corporation or the developer, and a statement if the candidate is in common expense arrears more than 60 days.
Disclosure Obligations for Directors
For post-turnover Boards, the disclosure obligations of board members is similar to that required and explained above concerning candidates. Keep in mind that under the new s.29(2)(f) of the Condominium Act, a director who does not provide the required disclosure within the required time immediately ceases to be a director.
Directors would be required to complete training within six months of being elected or appointed, if elected or appointed after the applicable Regulations come into force. The Condominium Authority is authorized to either develop the content of the training or designate another organization that would be authorized to provide the training. Directors have the right to be reimbursed for the costs directly incurred in the required training. It would appear, although this is not confirmed, that training would be available online.
B. Communications from the Corporation to Unit Owners
Condominium Corporations are now required to send out information bulletins or "certificates" to all unit owners.
The new s.26.3 of the Act references requirements for certain "information certificates" to be sent by the Corporation to owners and mortgagees. These are to include:
- Periodic Information
This information certificate is to be provided by the condominium to owners twice per fiscal year, within 30 days of the end of the first and third fiscal quarters. Much of the information is similar to what might be found in a Status Certificate, although there are quite a few additional requirements and explanations required.
- Information Certificate
To be required upon various events, including upon any change in directors, management and addresses for services for same.
- New Owner Information
To be sent within 15 days of a new owner giving notice in writing of becoming an owner. The NOIC is to include a copy of most recent PIC and ICU, and any other materials required by the by-laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.