<![CDATA[Clifton Kok LLP Legal Counsel - Bill 106 Blog]]>Tue, 30 Apr 2024 14:27:20 -0700Weebly<![CDATA[Blog Entry #29]]>Sun, 09 Apr 2017 04:20:29 GMThttp://cklegal.ca/bill-106-blog/blog-entry-29Reviewing the Draft Regs (Series 2)
 
Deemed Declaration Provisions 
(proposed section 6.1 of Ont.Reg. 48/01)

Although the time has passed for submitting official comments to the Ministry, there is still lots of opportunity to analyze the most recent proposed regulatory amendments under the Condominium Act, 1998, before they come into force (between July 1 and Fall, 2017, according to the Ministry website) with whatever changes the government might make in the meantime.  

In our brief comments to Ministry staff, we raised concerns regarding that part of the regulations (proposed section 6.1(1) of Ont. Reg. 48/01) that deems the following provisions to be part of every declaration:
1.




2.


​

​3.
Despite anything in the declaration, as soon as reasonably possible and, in any event, by no later than the 15th day after the declarant transfers the first unit in the corporation, the declarant shall give written notice to the first board mentioned in subsection 42 (1) of the Condominium Act, 1998 of the day that the declarant transferred that unit.

Despite anything in the declaration, as soon as reasonably possible and, in any event, no later than five days before the day that, according to the declarant’s anticipation, is the day on which the declarant will cease to be the registered owner of the majority of the units, the declarant shall give written notice to the first board mentioned in subsection 42 (1) of the Condominium Act, 1998 of the anticipated day. 

Despite anything in the declaration, as soon as reasonably possible and, in any event, by no later than five days after the declarant ceases to be the registered owner of the majority of the units, the declarant shall give written notice to the first board mentioned in subsection 42 (1) of the Condominium Act, 1998 of the day that the declarant ceased to be the registered owner of the majority of the units.
What’s the Point?

First, we question the point of these deemed provisions.  Sure, we understand what they mean, and what their effects are:

  • The first means that, within the stated time period, a declarant is required to give written notice to the pre-turnover appointed board of directors of the date on which the first unit sold is transferred;
 
  • the second means that, within the stated time period, the declarant must notify the pre-turnover appointed board of directors of the date on which it is anticipated the declarant will cease to own a majority of units; and
 
  • the third means that, within the stated time period, the declarant must notify the pre-turnover appointed board of directors of the date on which it actually ceases to own a majority of the units.

This sounds pretty good, right?  This sounds like we’re holding the declarant accountable to make sure that the timing for turnover doesn’t come as a surprise to (or get missed by) that first board of directors that is responsible for calling and holding the turnover meeting.  It’s a great idea, except, of course, that it’s really, kind of, sort of, pointless (at least, in any case that we can think of without straining our imagination too much).

To consider why we say this, consider the answer to this question: Who appoints the pre-turnover appointed board of directors? Answer: the declarant.  

Then consider who the declarant normally appoints to this board.  Answer: the declarant’s own people.

In our experience as lawyers to many condominium developers over the past 10 years (and for a few more before that at another law firm) and in dealing and communicating with other condominium development lawyers, it appears to us that nine times out of ten, if not more, the declarant’s pre-turnover appointed board of directors consists solely and exclusively of principals and officers of the declarant.  Sometimes there might be a key employee, or a family member (especially for those smaller “mom-and-pop shop” developers); but, in any case, almost never (actually, never, as far as we have seen) is the first board made up of strangers, or even known but arm’s length individuals, in relation to the declarant.

So who do these provisions require the declarant to notify?  In both principle and practice in the vast majority (if not all) cases: Itself.

Now, we admit to not knowing every case and circumstance out there, but it seems to us that it would be only the most unusual case where the notification requirements, here mandated as deemed provisions in every declaration, are actually needed for anyone’s protection.

What’s the Problem?

Our attention turns next to the second part of proposed section 6.1.  Its sub-section (2) provides as follows:

                    No board, other than a board of the corporation described in subsection 11 (8) of the Act,
                    may amend or repeal any of the provisions listed in subsection (1).

We, again, find ourselves asking what the point is; but, more importantly, we think we also identify a substantive problem.  In our view, this section is not only relatively pointless, but it also might be powerless, or, in other words, legally ineffective.

Pointless

On its pointlessness, consider this:  What this clause states is that only a board of directors elected or appointed when the declarant does not own a majority of units – for simplicity, we’ll just call this the “turnover/post-turnover board” – is able to amend the provisions deemed to be included in the declaration under section 6.1(1); but, really, why would they? 

The deemed provisions clearly only have effect during the period of time prior to the election or appointment of a turnover/post-turnover board.  Once that stage in the corporation’s progress is reached, none of the deemed provisions has any effect.  The first unit will have been sold already; the declarant will already not own a majority of units; so both the time periods and the purposes of these deemed provisions will have passed.

Further, since these are deemed provisions, they don’t actually show up in the declaration.  That is the whole point of a deemed provision: it means it is there in the declaration, without actually having to be written there in the declaration.  

So, given those two considerations, why bother amending them? No reasonable turnover/post-turnover board is likely to waste a moment’s thought over the subject.  At that stage, they can simply be ignored.

Powerless

Secondly, though, even if a post-turnover board was to want to amend those deemed provisions, we’re pretty sure they really can’t.  Hence, we think the provision could be powerless.

When we raised this issue with the Ministry, they pointed out that some of the new provisions added to section 177(1) of the Condominium Act, 1998, by the Protecting Condominium Owners Act, 2015, do, in fact, deal with the possibility of being able to amend provisions that are deemed to be in a declaration.  Indeed, new sub-paragraph 6.1 under section 177(1) does state that the regulations may deem certain provisions to be included in declarations, by-laws or rules of a condominium, “unless they are amended or repealed in accordance with this Act.”  Further sub-paragraphs 6.2 and 6.3 deal with further restrictions the regulations may impose on the right to amend or repeal such deemed provisions. However, in our view, these provisions don’t settle or resolve the issue.

One problem here is that while the new sub-paragraph 6.1 of section 177(1) of the Act suggests that the provisions the regulations deem to be included in a declaration may be amended or repealed in accordance with the Act, the Act does not actually contain any provisions that authorize such an action.  That is, there is nothing in the Act in accordance with which those amendments can be made. 

Presently, and under the changes being made to the Act, declaration provisions can be amended in only four ways:

  • Under section 107, the owners can consent to an amendment of any provision of the declaration, as proposed by the board; 
  • under section 108, the board can unilaterally amend the mailing address and address for service of the corporation; 
  • under section 109, a court may order certain amendments; and 
  • under section 110, the director of land titles may also order certain amendments.

In only one of these cases a board of directors can amend a declaration on its own authority, and that case is very, very restrictive, in that it relates only to updating the mailing address and address for service of the corporation.  In none of the other cases is it the board that actually amends the declaration – it is either the corporation as a whole (primarily, the owners), the court or the director of land titles.  Therefore, unless the Act is amended to grant the authority to amend or repeal a deemed provision in a declaration, it simply can’t be done.

In our view, the proposed section 6.1(2) of Ont. Reg. 48/01 does not fill the gap by creating the authority of the board to amend the declaration; and, even if it was supposed to do that, it does not reference a method authorized in the Act for doing so.  Therefore, in our view, this proposed regulatory amendment is not only without any point, but is also without any power.

We said that was “one problem”.  There is, we think, another.  

As we noted above, since these are deemed provisions, they don’t actually show up in the declaration.  That is the whole point of a deemed provision: it means it is there in the declaration, without actually having to be written there in the declaration.  So, where is it?  It is in the regulation.  Now, perhaps it goes without saying, but we will point it out: Not only does the Act not grant a condominium board authority to unilaterally amend the declaration (other than for the limited purposes set out in section 108 of the Act), it certainly does not grant the board the authority to amend legislation.  

We aren’t sure that anyone other than the government can amend or repeal (i.e., opt out of) statutorily deemed provisions of any document, unless the statute itself clearly grants that they can.  Neither the Act, even as amended, nor these proposed regulatory amendments appears to do this.

In the end, we get that even though it seems no board would ever really have good reasons to do so, the government wished to ensure that a post-turnover board could eliminate those deemed provisions if it wanted to; we just don’t think that these provisions actually accomplish that purpose. 
]]><![CDATA[Blog Entry #28]]>Thu, 09 Mar 2017 11:11:19 GMThttp://cklegal.ca/bill-106-blog/blog-entry-28Reviewing the Draft Regs (Series 2)
 
A few months after publishing the draft regulations relating to the Condominium Management Services Act, 2015 (see our blog entries on those regulations here, here and here), the Ontario government issued several of its promised proposed regulatory amendments under the Condominium Act, 1998, as amended by the Protecting Condominium Owners Act, 2015.  Rather than issue entirely new regulations, the government followed the same pattern it did when amending the Act rather than replacing it.  Instead of an entirely new set of regulations, what are proposed are amendments to the existing regulation, O.Reg. 48/01. 
 
When the “plain language summary” of the draft regulatory amendments is 38 pages long – a summary that admits it “does not reflect the complete technical scope of the proposed amendments” – and the draft amendments themselves are 69 pages, you know we are in for a ride; and these regulations cover just four topics relating to the governance of condominiums.
 
When the “plain language summary” of the draft regulatory amendments is 38 pages long – a summary that admits it “does not reflect the complete technical scope of the proposed amendments” – and the draft amendments themselves are 69 pages, you know we are in for a ride; and these regulations cover just a few topics relating to the governance of condominiums. In this and further installments of this blog, we will help you navigate the salient changes under each of the relevant headings.  But before we get into what most consider the key points of the draft regulations, we’d like to tell you about…
 
The change no one is talking about.
 
If you read the plain language summary of the regulations, you’ll see it is broken down into four general headings: “Communications from corporation to owners and mortgagees,” “Mandatory disclosures and training for condominium board directors,” “Meetings and Voting,” and “Record retention and access”.  Our next few blogs will cover points under each of these.  One heading that is missing, however, is, “Defining a portion of the units”.  Sounds exciting, eh?  No, not really.  It’s not half as vibrant and gripping (to those who live and breathe condominium law) as the other headings, but it is important and has broad ranging impact on several sections of the Act. 
 
Section 2(1) of the draft regulations quietly adds section 1.1 to Ont. Reg. 48/01, which, in turn, imposes new meaning on thirty other sections of the Act and the regulations.  What it requires is that whenever, in any of those sections, there is a reference to a portion of the units – which might mean a majority, or any other number of units – the meaning is:
1.



2.




​3.
Where the issue that the section deals with applies to owners of what are currently called “owner-occupied” units, but under Bill 106 will be known as “non-leased voting” units, then the reference to a portion of the units applies only to those units.

Where the condominium has the types of unit that section 49(3) of the Act states cannot vote unless they are the only types of unit in the condominium (that is, parking units, storage units, or units used to house services, facilities or mechanical installations) in addition to other types of unit, the reference to a portion of the units applies only to those other types of unit.

​Where neither of those restrictions apply, then any reference to a portion of the units actually means “all of the units”.  
The impact and purposes of these provisions are easily missed, unless the time is taken to review all of the thirty sections of the legislation affected by it.  Yes.  Really.  We did that.
 
Without taking you through the complete list, however, we can inform you that the impacts fall under three general headings.
 
First:  Protecting the Voting Power of "Primary Purpose" Units
 
The term, “Primary Purpose,” has been invented by us for the purpose of providing this explanation.  It is not a term used in the proposed legislation.  For our purposes, it means pretty much what it sounds like:  The type of unit that matches the central character of the condominium.  E.g., in a residential condominium, it will mean the residential units; in a commercial condominium, the commercial units; in a mixed residential and commercial condominium, both of those; and so on. 
 
Perhaps a Primary Purpose unit is better defined by what it is not: It is not a unit that is a parking unit, storage unit, or a unit used to house services, facilities or mechanical installations (except in a condominium where any or all of those types of unit are the only types, where they would then be the Primary Purpose units).
 
These new provisions proposed in the regulations will protect the voting rights of Primary Purpose unit owners by ensuring that where the Act calls for a vote by the owners of a particular percentage of the units, it is to be read as meaning a particular percentage of only the Primary Purpose units.
 
But doesn’t section 49(3) of the Act already state that votes cannot be cast for those types of units?  Well, yes, but actually that is part of the problem.
 
What the provisions of the Act currently do is actually grant a kind of voting – or, more accurately, vote-blocking – power to those units in situations where the outcome of a vote is determined not by a majority of owners present at a meeting, but by some percentage of all of the units.  In those cases, the percentage required to be met to pass the proposed business (be it a by-law, or a change to the common elements, or removal of a director, and so on) is a percentage of the total number of units including both voting and non-voting types of unit. 
 
In these circumstances, it is possible for a vote to be cast in which the owners of a majority of the voting units approves a decision, but if that majority does not also constitute a majority of all the units, the proposed action will not be approved.  In a condominium where a majority of the units are non-voting units (such as any residential condominium in which the Primary Purpose residential units constitute only about one-third of the units in comparison to the parking and storage units), this gives rise to the risk that the condominium might, technically, not ever be able to do almost anything.  It also allows an individual owner, or small group, that owns all of the non-voting units, to potentially control the destiny of the corporation in regard to an array of matters.
 
These quiet little changes to the regulations fix all that.
 
They also ensure that when counting quorum, it is the proportion of Primary Purpose units that counts.
 
Interestingly, however, there are at least two exceptions.  These new regulatory provisions do not affect the determination of the portion of units needed to approve a proposal to amend the declaration or to amalgamate with another condominium.  It is not clear why these situations were left off the list, while other highly significant matters, such as termination of the condominium and sale of the common elements, are affected by the changes.
 
Second: Ensuring the Voting Power of the Non-Leased Voting Units (sort of)
 
The changes made in this part of the draft regulations are also intended to ensure that where a section of the Act intends that voting or other determinations should only be by or for the non-leased voting (i.e., owner-occupied) units, it only will be by or for them.
 
Having said this, however, it appears that (unless our reading of this part of the regulations is flawed) none of the sections of the Act that actually deal with a proportion of the units being a proportion of non-leased voting units is included in the list of affected sections.  This could be because any of the relevant sections of the Act is already clear and effective in ensuring that where voting or other determinations should only be by or for the non-leased voting (i.e., owner-occupied) units, it only will be by or for them.
 
It is possible, therefore, that this part of the definition of a portion of the units is somewhat superfluous; but it might be helpful to be included anyway, even if just on the chance that it is needed to catch and unforeseen situation.  There seems to be such a ‘catch’, for example, in the newly proposed section 12.8(1)(a)(i)(A) of Ont. Reg. 48/01, which requires material to be included in a notice of meeting if (amongst other things) submitted by the owners of at least 15% of the units:  If the material submitted were to pertain solely to the non-leased voting units, then this requirement should be satisfied by the owners of 15% of just those units.  These proposed regulatory changes make this the case.
 
Third:  Controlling the Voting Power of the Declarant (again, sort of)
 
Lastly, some of the proposed changes are related to provisions of the Act (as amended by Bill 106) that restrict a declarant from exercising control over its newly built condominium in regard to such matters as: what parts of the property of a condominium the regulations require to be considered a unit, asset or common element of the condominium; whether the condominium corporation is required to purchase any property or assets; and what sort of remedies (e.g., legal claims) a condominium can seek against the declarant.
 
In all these cases, the proposed regulations clarify that where the Act states that such decisions cannot be made by a board that includes of a majority of individuals appointed or elected at a time that the declarant owned a majority of the units, it means a majority of the Primary Purpose units. 
 
At a glance, these provisions appear to be intended to restrict the declarant, but, in fact, they also provide the declarant with some further freedom.
 
It is true that the effect of the changes is (consistent with what is described under our first heading above) that, if the declarant chooses to retain certain other types of unit after sale of the primary residential or commercial units in the condominium, these will not grant the declarant control over the outcome of any votes.  We are aware of at least one condominium which was designed with multiple non-voting (i.e., parking, storage or mechanical facility) units expressly for the purpose of helping to ensure that the declarant could prevent, over the long-term, significant changes to the manner in which the property is operated.  The imposition of these provisions of the Act and new regulations will alter this dynamic.
 
However, at the same time, this means that even if the directors in question are elected or appointed at the time that the declarant owns a majority of the units, but not a majority of the Primary Purpose units, the board can proceed with such matters as rejecting what the regulations require to be considered a unit, asset or common element of the condominium, requiring the condominium corporation to purchase certain property or assets, and restricting the remedies the condominium can seek against the declarant, all of which may be decisions that work in the declarant’s favour. 
 
This is not a pernicious error.  It will still be the case that the board so elected or appointed will not have been elected or appointed by the declarant exercising majority control, but by the other owners of the units; but it will allow the declarant to retain those non-voting units to itself if it wishes to, without thereby restricting any of the decision-making authority of the board (which board might or might not be friendly to the declarant’s intentions).
All-in-all, despite the fact that these are not the “sexiest” of amendments that attract the most popular attention, this single, quiet, and lengthy, section of the proposed new regulations is an example of the detailed and thoughtful manner in which this series of amendments to the legislation have been approached by government staff, and provide those of us who must read and interpret the legislation with a useful exercise in applying the same level of care and attention in doing so. 
]]><![CDATA[Blog Entry #27]]>Sat, 25 Feb 2017 06:30:57 GMThttp://cklegal.ca/bill-106-blog/blog-entry-27Reviewing the Draft Regs (Series One)

PART 3:  “But what about…?” Answers to key questions about manager licensing

In our previous two entries (here and here), we discussed several key provisions in the recently proposed draft regulations under the Condominium Management Services Act, 2015 (hereafter, the “CMSA”).  In this entry, we explore a few questions that readers might have arising from or relating to these regulations.
 
(1)     Must a licensed manager be employed by a management company?
 
The short answer: Some likely must; others need not.
 
A Limited License holder must be supervised by a General Licensee, and therefore likely must be employed by a provider that can offer that supervision.  In fact, while the draft regulations state that a General License holder cannot be employed by more than one condominium management provider without consent, they state that a Limited License holder “shall be employed” by not more than one such provider without consent.  It is not quite as direct a statement as might be wanted, but appears consistent with the view that a Limited License holder must be employed by a management company.
 
However, a General Licensee can operate as a sole proprietor or be employed directly by clients.  These are potentially two ways of describing the same thing, but might not be intended to be identical in the regulations, in so far as a sole proprietor must also obtain a condominium management provider license, while a person employed directly by a corporation as a manager likely need not.  It wouldn’t hurt for the government to add some clarity on this point. 
 
The draft regulations further provide that where a manager is employed directly by the condominium, the manager cannot be employed by more than three condominium corporations at the same time. This requirement may be problematic for a manager who manages a community of condominiums of the sort that were prevalent prior to the introduction of Phased Condominiums under the Condominium Act, 1998.  Such communities act more-or-less as a single entity, and some contain well more than just three condominium corporations.  It would likely be fair for the government to provide an exception (or discretion on the part of the Registrar to grant such an exception) in those cases.  (Alternatively, if being a sole proprietor – which requires obtaining a condominium management provider license as well as a General License for the manager individually – is intentionally different than being directly employed – which might only require the manager to be a General Licensee – then that might be the means for a manager to get around this particular restriction.) 
 
(2)     What about self-managed condominiums?
 
The short answer: Directors of self-managed condominiums need not be licensed.
 
One of the most significant concerns raised early on when condominium manager licensing was first discussed, was how to protect the right of condominiums to be self-managed.  The draft regulations address this by a straight-forward exemption:  A condominium management license is not required by “A person who is elected or appointed as a director of a condominium corporation under the Condominium Act, 1998, including a director who receives compensation pursuant to a by-law made under clause 56 (1) (a) of that Act, unless the person is providing condominium management services for compensation or reward or the expectation of such.”
 
What this means is that condominium directors, whether elected or appointed, can manage their own condominiums (the regulation does not actually specify this limitation, but it reasonably should be read that way) without needing to be licensed. 
 
We have recommended to the government that this exemption be extended to expressly include officers of the corporation.  The actual activity of self-management is largely carried out by individuals not in their capacities as directors, but as officers (e.g., president, secretary, treasurer, etc.) of the corporation.  Though many, if not most, officers are also directors, an officer need not be a director, so there is the risk that at least some officers in self-managed corporations would still require licensing, which could defeat the generous purpose of this exemption.
 
It may also be noted that the regulation even permits the director to receive remuneration under a by-law of the corporation; however, it then attempts to restrict this only to compensation that has nothing to do with providing condominium management services.  It is not clear what else a director does, though, (since the corporation, and thus, its directors, have the exclusive mandate of managing the property on behalf of the owners) so unless this is further clarified when the regulations are finalized, it would likely be safest for directors simply not to be compensated lest they risk being required to become licensees.
 
It is also not clear how anyone would determine with certainty whether a director provided management services with “the expectation of” remuneration.  One might expect it all one likes, but the real test should be whether or not any compensation is actually paid.
 
(3)     Are there exceptions for other providers of management-related services to condominiums?
 
The short answer: Yes.
 
Lawyers, architects, accountants, engineers, and insurance brokers are all exempted from requiring licenses, provided that the services they provide are within the scope of their respective professional designations. 
 
The draft regulations also exempt banks and court appointed receivers, Inspectors and Administrators. 
 
Security guards are exempted in regard to holding owners’ contributions to the common expenses for safe keeping, and in regard to supervising employees or contractors of the condominium corporation.  The draft regulations further exempt employees of condominium management providers whose sole responsibility (in regard to the condominium) is to collect and hold contributions to the common expenses.
 
Lastly, individuals who solely provide maintenance or repair services do not require licenses.  The draft regulations state that this expressly includes landscaping and cleaning services.  Not only does this exemption round out the exemptions so that virtually all providers of services relating to condominium management, other than managers themselves, are exempted, it even captures in its scope the volunteer “handy-man” resident who might putter about the garden or do the occasional plumbing repair for the property.
 
(4)     Where do I get information about a manager’s license?
 
The short answer: Ultimately, on-line, as well as in some other form.
 
The Registrar appointed under the CMSA will have a responsibility to compile and make available a whole raft of data regarding each licensee.  The regulations require that the information be accessible on the managers governing authority website, as well as in “at least one other manner that the registrar considers appropriate.”
 
Such information will cover the identity and contact information of each licensed manager and management company, as well as status of the license and details of any conditions attached to a license, complaints, proposed suspension or revocation, disciplinary action, charges and appeals.  Financial information that is reasonably deemed to be confidential will not be disclosed. 
 
Some of the disciplinary information will only remain accessible for two years after the sanction in question has ended, while a finding of guilt for an offence will remain visible on the manager’s record for five years.
 
Providing access to this kind of information is critical to raising the bar for the provision of condominium management services generally and integral to the representation of condominium managers as professionals.  Similar information is available on-line with respect to lawyers and teachers and other professionals, who are also subject to governing authorities and disciplinary structures.  It represents a commitment not only to transparency but to the accountability that grounds integrity and public confidence in the profession.]]><![CDATA[Blog Entry #26]]>Sat, 25 Feb 2017 06:21:52 GMThttp://cklegal.ca/bill-106-blog/blog-entry-26Reviewing the Draft Regs (Series One)

PART 2:  Governing the Profession

In our previous entry, we outlined the types of condominium manager license provided for under the recently proposed draft regulations under the Condominium Management Services Act, 2015 (hereafter, the “CMSA”).  But setting out licenses and qualifications isn’t all that the proposed regulations do. In addition, they contain some key provisions that serve to govern the conduct of the condominium management profession.  In this entry, we examine those provisions.
 
Some of those provisions are relatively straightforward.  Section 36, for example, lists an array of records that each licensee must keep.  There is nothing in the list that is either extraordinary or unusual.  In essence, the licensee must retain records that demonstrate having met and maintained the qualifications for licensing, that represent appropriate management of employees and delegates of the licensee, and that represent all the fundamental terms of the licensee’s contracts with clients.  
 
Certain other provisions, however, give rise to some matters worthy of comment.
 
Proxies
 
It would be the rare individual involved in condominium law or management who has not heard the term “proxy war”.  Unfortunately, it is not just the directors of condominiums that sully their hands with this sort of behavior, but several managers at times – whether to save their own contracts or because they genuinely and in good faith take one or another side in a condominium dispute – also engage in it. Section 53 of the CMSA puts a stop to some of that.  It states,
 
               A licensee, or any person acting on behalf of a licensee, shall not solicit an instrument appointing
               a proxy for a meeting of owners where the subject matter of the meeting includes, (a) any matter directly
              related to the licensee; (b) the removal or the election of one or more of the directors of the client;
​              or (c) any other prescribed matter.
 
So far, rather than prescribe other matters for which the manager may not solicit proxies, the draft regulations instead define “solicit” to clarify that what is being prohibited is a manager petitioning for, or trying to directly obtain, a proxy.  What is not prohibited are “collecting or holding” proxies, “notifying or reminding owners or mortgagees to submit” proxies if not attending the meeting, providing information on how to submit a proxy, providing proxy forms as part of a notice package or similar communication, or providing proxies upon request.
 
These clarifications will likely help avoid a number of troublesome and unnecessary accusations, but it is nearly impossible to write perfect laws that adequately define every circumstance.  Some line-crossing might still occur (as between, say, “trying to directly obtain” a proxy and trying to obtain a particular vote on a proxy, or between providing information about how to submit a proxy and providing submission requirements that are deliberately made difficult for specific owners to satisfy); so it will remain important for managers to consciously and conscientiously act in an ethical manner by choice and not solely by virtue of legislative restraint. 
 
Disclosure
 
The draft regulations cover two different issues about which disclosure by a manager is necessary.  First, is disclosure of an interest in a contract or transaction; second, is disclosure of insurance.
 
The latter is straight-forward.  Before entering into a contract with a client, the manager is required to disclose the type and amount of insurance coverage that the manager has, and to disclose when that information changes. 
 
The fact that the option exists for the disclosure to indicate the manager has no such insurance suggests that, at this stage at least, the government is not considering making such insurance mandatory (though the CMSA has provisions that would allow for this to happen).  It is important for condominiums to know whether that added layer of protection exists.
 
In regard to disclosure of an interest, the fact that such disclosure is required is not new information.  Section 52 of the CMSA already requires this.  The purpose of the regulations, according to the CMSA, should be to expand on the form and manner of the disclosure.  Instead, what the draft regulations actually do is reiterate and expand the obligation. 
 
The expansion is that, if an obligation to disclose exists, then the manager is not permitted to cause the client to enter into the contract unless such disclosure has occurred and the client has given express written approval to proceed.  Such written approval is required regardless of whether authority to enter contracts of the type in question has been formally delegated to the manager.  Also, as with a director’s conflicts of interest, the manager who has an interest cannot be present while the proposed agreement or transaction is being discussed.
 
These are good provisions, of course, but, once again, we recognize that they might only be as effective as a manager is honest.  If a manager’s interest is, for example, in the form of a “kick-back” from a contract, which is a dishonest practice in the first place, should we anticipate that the manager in question is going to disclose this fact?  In effect, the legislative requirements will more often than not merely help protect an honest manager from suffering undue accusations, while a dishonest one might simply proceed according to his or her status quo.
 
It may also be noted that the draft regulations do not make any effort to define the type of interest that qualifies for disclosure, leaving it open to the broadest interpretation. Basically, the rule for managers should be: When in doubt, disclose.
 
Transfer of Records on Termination
 
Section 37 of the draft regulations is another reiteration and expansion on a provision in the CMSA.
 
Section 54 of the CMSA already requires that, on termination of the management contract, the manager must “immediately” return all documents and records of the client to the client. Sections 37(1) and (2) of the draft regulations clarify that “immediately” means “no later than 10 days after the termination” in the case of existing documents, and “no later than one month after the termination” with respect to any records that are not in existence that the manager is required to provide.
 
The balance of section 37 seeks to ensure that managers who make and keep copies of client documents and records after termination (for their own record-keeping purposes) shall keep them secure and confidential.
 
What stands out in both these provisions and section 54 of the CMSA is that something not dealt with clearly is the transfer, on termination of a contract, of the client’s property, such as keys and financial assets.  While it will remain the obvious obligation of the manager not to retain such against the client’s wishes or well-being, it is a little surprising that nothing to this effect gets set out in the legislation.
 
Complaints
 
Lastly, Part III of the draft regulations is devoted to the topic of complaints.  Again, nothing extraordinary, unusual or otherwise surprising is set out here.
 
The regulations essentially require that when any complaint or related investigation or action is undertaken with respect to a licensee, the principal condominium manager of the applicable condominium management provider (i.e., company), or the board of directors if the manager is directly employed by a condominium corporation, must be informed.
 
The regulations further provide that not only shall a manager not do anything to prevent a person from making a complaint, the manager who is under complaint must also not interfere in any way with a person who is required to provide information relating to the complaint to any of the Registrar, the director of the authority that governs licensed managers, the condominium corporation, its board of directors, or the condominium management provider. 
 
In regard to this last point, two issues should be discussed.
 
First, a manager would be wise not only not to interfere with a potential complainant, but oftentimes should encourage the complaint. Not only will entering the complaint process potentially offer some relief to all parties, particularly as the complainant gets his or her issues “off his/her chest” and transfers responsibility to the Authority to handle, but encouraging a complaint also (a) demonstrates confidence about one’s own conduct and (b) demonstrates confidence in the integrity of the complaint handling process.
 
Second, directors of corporations should note that the manager subject of the complaint is required not to interfere with the board, but the regulations do not say the manager must cooperate with respect to an individual director. Whether intentional or not, this is consistent with the understanding that individual board members do not have individual authority but must always and only act in accordance with board resolutions.  A manager might not be faulted for “interference” if he or she discourages an individual board member from communicating with the investigative authority without the formal assent and authority of the board.
 
In our next installment, “But what about…?” Answers to key questions about manager licensing.
Check out our other two installments on the draft regulations under the Condominium Management Services Act, 2015, here and here.
]]><![CDATA[Blog Entry #25]]>Sat, 25 Feb 2017 06:10:50 GMThttp://cklegal.ca/bill-106-blog/blog-entry-25Reviewing the Draft Regs (Series One)

In December, 2016, the Ontario government provided draft regulations under the Condominium Management Services Act, 2015  (hereafter, the “CMSA”). These are the regulations that deal with the licensing of condominium property managers.  Although not final, we can expect that, in principle at least, these are the regulations that will be enacted.  So, in the interest of continuing to prepare better for what is to come, in this entry and two that follow we provide you with our set of comprehensive highlights.

PART 1: Types of License

The CMSA regulations provide for four types of license.  Three of these - the “Limited License”, a “General License” and a “Transitional General License” – apply to individual property managers, and the fourth is the license for a “condominium management provider” (or, management company).  They also provided for a “deemed” Limited License and a “deemed” Transitional General License, just, of course, to make things a little complex.  (How else will they keep lawyers employed?)
 
Not all requirements for each type of individual license are identical, but it is worth noting that every property manager who is a licensee must be marginally adult (over 18 years old) and not have a long criminal history (there must be a clear criminal record check dated no further back than 6 months prior to the time of application).  Other requirements pertaining to such things as education and work experience vary and might even be waived to some extent or another based on factors the Registrar appointed under the CMSA can consider; but, in general, the objective appears to be to license only managers who demonstrate basic maturity, trust-worthiness, knowledge and capability to manage condominium properties in accordance with the law, or who are directly supervised by such people in order to make sure that they do.
 
When the relevant provisions of the CMSA come into force, each current property manager will either be deemed to hold a Limited License, or will be deemed to hold a Transitional General License.  Both will have up to 150 days (subject to discretion by the Registrar) to apply for, respectively, an actual Limited License, Transitional General License or General License.  Failure to apply within the permitted time period results in the deemed license lapsing, terminating the right of that individual to provide condominium management services.
 
The distinction between whether a manager has a deemed Limited License or a deemed Transitional General License, comes down to experience.  A minimum two years’ experience is required to hold a deemed Transitional General License.
 
As that statement implies, a Limited License is basically for managers with little-to-no experience, which is quantified as having less than 2 years’ experience.  Currently, a Limited License holder (including a deemed licensee) has no educational requirements to qualify for a license (though the regulations allows for some to be imposed), but must work under someone holding a General License or Transitional General License.  They require such licensee’s express approval for some acts (such as entering contracts and handling operating funds), and there are certain things (such as handling the Reserve Fund or issuing status certificates) that simply cannot be done by a Limited Licensee.
 
Limited License holders have five years in which to progress to a General License, or the Limited License may not be renewed (subject to limited discretion on the part of the Registrar). 
 
The General Licensee has the same more-or-less unlimited power as a current condominium manager is expected to wield, subject, of course, to the terms of the management agreement and the instructions of the condominium’s board of directors.
 
The primary differences between the requirements for a General License and a Limited License are based on education and experience.  A General Licensee must, at the time of application, have had at least two years’ certified experience, which includes some specific tasks such as planning and conducting meetings of condominium boards and owners, preparing condominium budgets, interpreting condominium financial statements, and overseeing condominium management and repairs.  The General Licensee must also have satisfied the educational requirements imposed by the Registrar, or their equivalent (as approved by the Registrar in accordance with the regulations). 
 
In general, the educational requirements for a General Licensee are those required to become an RCM.  In fact, an RCM in good standing with ACMO, or a manager who has completed certain courses offered by ACMO, and who held a deemed Transitional General License at the time the CMSA comes into force, is deemed automatically to have the educational (and most other) requirements for licensing.
 
The Transitional General License is an interesting compromise between the two other types of license.  It appears basically to be available for people who will meet the requirements for a deemed Transitional General License when the CMSA comes into force, but who do not meet the educational requirements necessary to obtain a General License proper.  Subject to the discretion of the Registrar, a manager can only renew a Transitional General License for up to 3 years before it expires, so this more or less limits the time the manager should take to meet the educational requirements for a General License.
 
The fourth and final type of license is that which is issued to a “condominium management provider,” which is a corporation, partnership, association, other organization, or a sole proprietor, that provides condominium management services. Every such provider is deemed to hold a condominium management provider license provided it was providing such services to at least one client as of the day prior to the day that the CMSA comes into force.  The organization or entity must apply for a license proper within 150 days of that time, or else the deemed license will expire (subject to the discretion of the Registrar).
 
Each condominium management provider license holder must have a designated “principal condominium manager”.  Unusually, the regulations provide that this requirement does not apply while the entity holds only a deemed condominium management provider license.  It is not clear why this provision is needed, since the regulations could also just as easily have provided that the principal condominium manager, during the time that the deemed condominium management provider license is in place, could also be a deemed licensee.
 
Note that one of the interesting twists in this set up is that a property manager who is a sole proprietor will need to obtain two licenses: one for him- or herself and the other for his or her ‘company’.  No exemption appears to be provided for this; though one would think it only fair if the sole proprietor manager receives some sort of a break on fees, at least.  We did not see this provided for in the regulations, but nothing should stop the Registrar from putting such a break in place.
Check out the next two installments in this series of entries about the draft regulations under the Condominium Management Services Act, 2015, here and here.
]]><![CDATA[Blog Entry #24]]>Mon, 13 Jun 2016 11:58:40 GMThttp://cklegal.ca/bill-106-blog/blog-entry-24   
Some Things Stay the Same

In this blog, we’ve written about several things in the Condominium Act, 1998 (the “Act”) that are to be changed once Bill 106 – the Protecting Condominium Owners Act, 2015 – comes into effect.  But there are a number of things in the Act that Bill 106 doesn’t change – at least, not entirely.  One of those is the board of directors’ standard of care.
 
Section 37(1) of the Act says, and, once Bill 106 is fully in force, will continue to say, 

Standard of care

​37. (1) Every director and every officer of a corporation in exercising the powers and discharging the duties of office shall,

(a) act honestly and in good faith; and
​
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 

​These standards are good standards.  They are the appropriate minimum standards of character and conduct that it is reasonable to expect every director and officer of a condominium corporation in Ontario to uphold.  Heck, they are basic standards of decency, fairness and mindfulness that every person should be able to uphold without extraordinary effort or difficulty.  Unfortunately, what’s reasonable is not the same as what is.
 
These standards are stated in the Act for a reason: that not everyone automatically or characteristically subscribes to them.  In our experience as lawyers for literally hundreds of condominium corporations and unit owners in Ontario, we know that most condominium directors will try to meet these standards at least when they are explained to them, but that there are some for whom it does take some effort, and that there are even a few (for whom we generally chose not to work) for whom these standards describe the exact opposite of their actual and deliberate conduct. 
 
So these standards are still needed, and it is a good thing that Bill 106 doesn’t change them.  Reducing the standards would have simply put more members of condominium communities at risk of mistreatment; and raising the standards even further would simply have made it less likely that any director or officer could comply.
 
Rather than change these standards, what the new legislation will do is seek to make them somewhat easier to meet. 
 
Amongst the new provisions of the law that help to do this are those contained in the new section 29, which require condominium directors to have met basic disclosure and educational standards.  If used effectively, these provisions will serve to help ensure that the standards of conduct expected of directors are reinforced through training and through public accountability.
 
In addition, other provisions, such as those relating to the disclosure of condominium records, reporting to unit owners, and bearing the costs of litigation, all could serve to help and encourage condominium directors to meet their standards of care by supporting an atmosphere, or culture, of openness and, again, accountability.
 
The setting of such standards is about the closest the law can come (outside of criminal and human rights law) to enforcing ethical behavior.  The real effectiveness of such laws is manifest when individuals choose willingly to comply with them.  Although the standards are legislated, and the tools for encouraging compliance are improved in the new legislation, one important thing that will remain unchanged under Bill 106 is the fact that the best way to ensure a board of directors acts in a consistently appropriate manner is for unit owners to be engaged in their communities, to attend and participate in meetings, and to vote – particularly, to elect directors – thoughtfully.
]]><![CDATA[Blog Entry #23]]>Sat, 11 Jun 2016 03:59:49 GMThttp://cklegal.ca/bill-106-blog/blog-entry-23   
Show Me the Regs!

We've been dawdling at little at getting new blog posts out.  This is in part because, as we've explained before (for example, here and here), the new regulations to be created under Bill 106 are where a lot of the real substance of the new law will lie, so it's imperative to know what they say in order to know better some of the things we should say when explaining the new provisions of the Act to you.   Well, the regulations still aren't ready, but they are on the way.

Early in June, one of our founding partners, Michael Clifton, was invited to join with a few other Ontario condominium industry experts to meet with government staff and policy specialists to discuss some of the issues the regulations need to address in relation to condominium corporation governance.  This was the first of many such meetings the government will host over the next few months with a wide array of condominium lawyers, managers, unit owners and others.  

In this meeting, issues relating to corporation records, proxies, notices of meeting and other typical and mundane matters generated enough discussion to fill the whole four-hour block that was set aside for it.  Sometimes the discussion was even animated and exuberant as various issues and interests were expressed, explained, argued and analyzed to help the policy makers who will write the regulations get a better sense of how the things they are imagining might play out in reality.

Unfortunately, though, we are not entitled to let you know what was actually said. The regulations are coming, but the discussions are so preliminary at this time that Ministry staff have asked all participants in these meetings to commit to saying nothing yet, in order to help avoid confusion over what the regulations will ultimately provide.

What we can tell you is what we've said to several inquirers before: it won't all happen at once.  Government staff confirmed that the regulations will be released – and both the regulations and the related provisions of Bill 106 (the Protecting Condominium Owners Act, 2015) will come into force – in stages.  

The precise contents of each stage are unknown, and whether it will all be in place by the end of 2017 remains an open question.  We anticipate, however, that provisions relating to some of the governance issues discussed in our meeting, as well as the establishment of the Condominium Authority Tribunal, and very possibly some or all aspects of condominium manager licensing (discussed in these prior blog entries), will be among the first parts proclaimed into force.  But, truthfully, it all remains to be seen.

Although the possibility of the Protecting Condominium Owners Act, 2015, taking a long time (well into 2017 and potentially later) to come into force and effect is a little disappointing, it is also comforting to see that the responsible staff and policy experts are taking that time in a sincere effort to get it done right.  ]]><![CDATA[Blog Entry #22]]>Tue, 05 Apr 2016 07:00:14 GMThttp://cklegal.ca/bill-106-blog/blog-entry-22   
So, you want to evict a tenant

from your condo?

As promised in a previous blog entry, we are back to discuss the amendments to the Condominium Act, 1998 (the “Act”) under Bill 106 regarding the permanent removal of persons from the condominium.

As any condominium board member or property manager knows, unruly unit owners and tenants are not uncommon. Unfortunately, sometimes the only way to resolve non-compliant, bad and/or dangerous behaviour is to commence an Application in the Superior Court.  On occasion, the behaviour of a person has been so bad that the court will actually issue an order removing him or her permanently from the property.  This is not a very common result, but our firm has been involved in one such case.

The court’s authority to issue such an order arises from the broad language in the Act as it exists today (prior to the coming into force of the amendments under Bill 106), which grants the court the discretion to make any order it deems “proper” (per section 135(3)), or “fair and equitable in the circumstances” (per section 134(3)). 

This power is not absolute. Although the Act currently contains no statutory restriction in relation to an order removing a unit owner or a member of an owner’s household permanently from the property, it does limit the court’s authority relating to termination of tenancies to just two circumstances: where it is satisfied that, either, (a) the tenant is in contravention of a previous compliance order (meaning the corporation must seek two separate orders, and the first must have been disobeyed by the tenant) or (b) the tenant has failed to pay his or her rent directly to the condominium corporation after the corporation has instructed the tenant to do so in order to pay the unit owner’s arrears of common expenses (per section 87 of the Act).  (Of course, in regard to a tenancy, it would be most ideal for the landlord unit owner to bring an application at the Landlord and Tenant Board to evict his or her own tenant; however, some unit owners are reluctant to do so, and either fail to take, or delay taking, such action, leaving the corporation to its own devices.)

Under Bill 106, this situation changes somewhat. 

Notably, both of the special provisions noted above relating to tenancies are eliminated, such that now the same standards or criteria are applied for the removal of any person from the condominium property, whether unit owner or tenant.  Further, the amendments now provide a clear and restrictive set of criteria, limiting the authority to issue an order to vacate the property permanently to just two specific circumstances:
1.



​2.
Where that person poses a serious risk to the health and safety of individuals or to the property of the condominium corporation, in contravention of the new subsection 117(1) of the Act (relating to dangerous conditions or activities, but not to nuisances or disruptions); or

on the basis of that person's acts of non-compliance or oppressive conduct, the court is satisfied that the person is “unsuited” for the “communal occupation” or “communal use” of the property, provided that no other order will be adequate to enforce compliance or prohibit the conduct in question.
The emphasis is clear: recourse to an order that a person vacate the property permanently must be a remedy of last resort.

​In principle, this is not a significant change to the law as it has been carried out to date.  The courts have not readily granted such orders in the past; but the effect of these amendments is to ensure that there is no legislative authority for changing this trend.

It should be noted that an application for such an order can only be made to the court (not the Condominium Authority Tribunal), and cannot be made by the landlord unit owner against his, her or its own tenant. The eviction of a tenant by a landlord remains within the purview of the Landlord and Tenant Board under the Residential Tenancies Act, 2006. ​
]]><![CDATA[Blog Entry #21]]>Tue, 08 Mar 2016 07:54:39 GMThttp://cklegal.ca/bill-106-blog/blog-entry-21
Changes to the Standard Unit

In this blog entry, we discuss one of the most important sets of changes Bill 106 brings to the Condominium Act, 1998 (the "Act") – changes to the standard unit definition.

Under the legislation at this time, there are two purposes of a standard unit definition:
  • to define the scope of the insurance obligations with respect to the units; and
  • to define the scope of repair (after damage) obligations with respect to the units.

A condominium does not insure any components of the units that, according to the standard unit definition for the condominium, are improvements; and, further, the party responsible for repair of a unit after damage is only responsible for repairing the unit up to the standard unit definition. (See our Condopædia article here, and our About Condo memorandum, here, for more detailed discussions about this.)

One of these applications of the definition is disappearing once the relevant provisions of Bill 106 come into force, amongst other significant changes.

Where to Find Your Standard Unit Definition Today

Currently, the Act does not provide a standard unit definition. Instead, there are two mechanisms whereby a condominium corporation may have one.

The first method is the provision of a definition by the declarant (developer) of the condominium. Within 30 days following its turnover meeting, the declarant must deliver to the board of directors of a condominium, a schedule setting out what constitutes the standard unit for each class of unit in the condominium.

Technically, almost every condominium corporation created since May 5, 2001, should have such a schedule; however, in reality, most condominium corporations either don't know they have one, or the declarant simply did not provide one. Therefore, the second method is the one more commonly relied on, which is the establishment of a standard unit definition by by-law.

Many standard (including phased) condominiums registered within the past 15 years have a standard unit by-law that was prepared by the declarant and registered together with the condominium’s original by-laws (such a declarant would, therefore, likely not bother to also provide a schedule after turnover).  Most other condominiums have enacted a standard unit by-law sometime after registration under the direction of the unit owners and an owner-elected board.
Some condominiums, however, still, even now, do not have a standard unit definition. The courts have determined that in these cases the standard unit is defined as the whole of the unit, the boundaries of which are set out in the corporation’s declaration. Obviously, this is not an ideal scenario for the corporation. It means the corporation is obligated to maintain insurance for the entire unit. The costs for the corporation are therefore potentially much higher than they otherwise would be.

Where to Find the New Standard Unit Definition
(or, rather, where not to find it yet )

Once the relevant provisions of Bill 106 are in force, condominiums that have not previously passed a by-law to create their own standard unit definitions, will now have one imposed on them.   

Bill 106 removes the requirement for a declarant to provide a standard unit definition by schedule after turnover, and instead restricts the standard unit (for each class of unit in a condominium) to be
  • the standard unit as described in a by-law passed by the corporation; or,
  • the standard unit as prescribed in the regulations, if the corporation has not passed a by-law. 
 
Therefore, if your corporation doesn't have a standard unit by-law there will soon be no need to look to the declarant's schedule (and in fact the requirement for the declarant to provide such a document will be repealed when the amendments are in force); and the court's ruling that the entire unit will be standard, may no longer apply.
 
Of course, we have to say may, since we can't be certain of the details until we see the regulations. As the regulations have not yet been drafted, we don’t know how the standard unit will be defined, only that it will be.  The exact nature of the default standard unit definition remains, for now, a mystery. (See our previous blog entry on the topic of the regulations to come, here.)
 
A New Definition of Improvements

The amendments to the Act brought forward by Bill 106 also include a revised definition for what constitutes an “improvement”.

Currently, an improvement to a unit is whatever is not defined as standard.  Once the amendments under Bill 106 are in force, an improvement will be defined as (a) any part of a unit, where the part does not constitute a standard unit or part of a standard unit, or, (b) any repair or modification to a standard unit that is done using materials that are higher in quality, as determined in accordance with current construction standards.

It is possible, based on this new definition, that, going forward, standard unit definitions may need to include some details about the make and materials included in standard unit components, something which the current legislation does not require.  Further, there would likely need to be a record kept of when repairs or modifications are made that trigger a redefinition of a standard unit component as an improvement.  Unit owners and corporations might also have to be diligent in informing their insurers, or at least be aware themselves, when components change from one category to the other, as this might alter the coverage required for the unit, and would at least, in most cases, change the party responsible to have such insurance coverage in place for that component.
 
Impact on Maintenance and Repair Provisions

As noted at the start of this entry, currently, the standard unit definition establishes the responsibility for repairing the unit after damage as well as insuring it.   Only the standard components of the unit are subject to that obligation.
However, among the most significant changes to be made to the Act under Bill 106 (which will be discussed in more detail in a future blog entry) are amendments to its maintenance and repair provisions of the Act, which substantially alter the application of the standard unit definition.

Basically, Bill 106 eliminates the term “repair after damage” as it is currently used under the Act.  Instead, it speaks solely of repair and maintenance obligations.  In so doing, Bill 106 also eliminates the provisions of the Act that restrict the scope of the repair obligation with respect to units to just the standard unit.

The new provisions of the Act deal only with “maintenance” and “repair” obligations, and, despite the fact that the new subsection 56(1)(h) of the Act, revised by Bill 106, states that a purpose of the standard unit definition is in part to determine “the responsibility for repairing or maintaining improvements made to units,” nowhere is the standard unit definition mentioned in the provisions specifically describing repair and maintenance obligations.

Possibly, more light will be shed on this in the regulations (which we will let you know as soon as we find out ourselves), however, for now it appears as if the standard unit definition will, in fact, be irrelevant to determining the scope of repair obligations, leaving it solely relevant in regard to insurance duties under the Act. 
]]><![CDATA[Blog Entry #20]]>Sat, 20 Feb 2016 03:49:35 GMThttp://cklegal.ca/bill-106-blog/blog-entry-20
Regulations:

    Where the real law hides

In many entries in this blog, we have made reference to the “regulations,” meaning the regulations to be enacted under Bill 106 (or, rather, under the Condominium Act, 1998, as amended by Bill 106, a.k.a. the Protecting Condominium Owners Act, 2015).  What about these regulations? What are they, and what will they do?

“Regulations,” in the context of Ontario law, are a kind of legislation that is not made, debated and passed publicly in the legislature, but is created by committees of legislators and staff behind closed doors and a regulation comes into force simply on the date it is filed with the province's Registrar of Regulations (unless the regulation itself provides otherwise). 

The right to make such regulations is always set out in a regularly enacted statute.  The statute will delegate the authority – usually to a Minister or to the “Lieutenant Governor in Council” (essentially, the Cabinet) – to, by regulation, expand upon, clarify, modify, or provide procedures relating to certain sections of the statute.

What this allows is for legislation to be passed that sets out some broad-brush principles for whatever area of law the statute covers, without going into the specific details of how the principles enacted will be realized in practice.  The regulations set out those details.
​
Bill 106 – the Protecting Condominium Owners Act, 2015 – is rife with references to “the regulations”.  Numerous details about the changes being brought into play are, in fact, nowhere to be found in the Act itself, but are to be spelled out in regulations that have not yet been drafted.  It is for this reason that so much of what we and other commenters say about the changes to the Act is tentative or uncertain.

The following is a short-list of some of the things that the regulations to be made under Bill 106 can or will cover :
  • Specifications of certain powers or duties of the Condominium Authority;
     
    Rules for providing information to the public relating to various procedures and practices of the Condominium Authority and decisions of the Condominium Authority Tribunal;
     
    Terms and qualifications for members of the Condominium Authority Tribunal;
     
    The specific types of dispute that can be heard and decided by the Condominium Authority Tribunal;
     
    Adjustments to the maximum amounts of compensation awards and other penalties that can be ordered by the Condominium Authority Tribunal;
     
    Specification of the manner in which common expenses are to be determined and the kinds of losses for which unit owners may be responsible to indemnify or compensate condominium corporations;
     
    Specification of provisions a declaration may or must contain over-and-above what is set out in section 7 of the Act;  

    The form of summary to be included in a declarant’s disclosure statement, and specifications for certain information required to be contained in the statement and the associated budget for the proposed or newly made condominium;
     
    Specification of parts of the property that must be defined as common elements or assets of a condominium corporation;
     
    Establishing the period of time in which reservation funds paid under a reservation agreement must be applied as a credit to the purchase price of a unit once an agreement of purchase and sale is entered into;
     
    Requirements pertaining to certain types of easement that can be created in a declaration;  
    ​
    Requirements relating to turnover by the declarant;
     
    The form, required contents and deadlines for information returns (and notices of changes in such information) to be provided by condominium corporations to the Condominium Registrar;  
     
    The manner in which the information in such returns is to be maintained and made public by the Registrar;  

    Requirements pertaining to the form, contents and registration of shared facilities agreements;  

    Requirements relating to the information certificates to be distributed regularly by a condominium corporation to its owners;  ​

    Disclosure and educational obligations imposed upon candidates for condominium board membership and standing directors;  
     
    Requirements for receiving and holding condominium corporation funds;The types of electronic communications systems that can be used by condominium boards to hold meetings;  
     
    Requirements and restrictions on the kinds of agreements or transactions the corporation may enter into and the related procurement process to be followed;  
     
    A default Standard Unit definition, to be imposed on condominium corporations that fail to enact their own definition by by-law;
     
    Alternative timing for Performance Audits (and for several other processes indicated in the Act);
     
    The requirements to be met for conducting a reserve fund study as a reserve fund study provider
Specification of material to be included with a notice of meeting to unit owners in a condominium corporation;  
 
Specification of any additional types of meeting (if any) to which the 25% quorum requirement shall not apply.
Establishing a required form of proxy for owners’ meetings;
 
The deadline for submissions by candidates for the non-leased voting unit position on a condominium board, and specifications of materials to be submitted;  
 
Details as to the form, content and delivery of requisitions for meetings made under section 46 of the Act, and adjustments to any of the other time-lines or requirements relating to requisitions that are set out in the Act;
 
Specifications as to the types of records a condominium corporation must keep over-and-above what is already set out in the Act, and specifications as to the periods of time that such records must be retained and the manner and formats in which they may be kept;
 
Specifications of additional types of records that owners are not entitled to examine;
 
Specification of additional types of by-law a condominium corporation may enact, and adjustments to the number of owners whose vote is required to approve a by-law;
 
Statements required to be included in a condominium auditor’s report;
 
Additional conditions relating to the sale of a part or all of the property of a condominium;
 
The form of notice of new budget to be issued by directors of a condominium corporation;
 
Requirements for notifying unit owners when a board proposes to spend more for a budgeted expense than was indicated in the condominium corporation’s budget;
 
Requirements for notifying owners of additional contributions to the common expenses that are required to be paid by them;
 
Specifications of additional repair or maintenance obligations that may be imposed upon owners or corporations in the declaration of the corporation;
 
Additional purposes to which reserve fund monies may be put;  (it is anticipated ‘green’ technology enhancements or additions might be permitted in this way)
 
Minimum balance requirements for reserve funds, and time periods for remedying a short-fall;
 
Purposes for which the corporation may modify the property without requiring unit owner approval, over-and-above those already set out in section 97 of the Act, the method by which the cost of a modification is to be determined, and the required form or contents of notices to be sent to owners under section 97 of the Act;
 
Adjustments to the percentage of owners whose consent is required to approve a declaration amendment;
 
Specification of types of nuisances, annoyances and disturbances that are not permitted in a condominium corporation;
 
Specification of circumstances, other than emergencies, in which an agent of a condominium corporation may enter a unit without prior notice to the owner;  

Setting out additional conditions for termination of the governance of the Act over a condominium property, and for the distribution of proceeds of sale to the owners upon a sale, expropriation, etc., of the property; and
 
A process for mediation and arbitration of disputes (where no by-law of the corporation or agreement amongst the parties, requires otherwise);

​...and this list doesn't include everything (nor does it include all the many issues that can already be dealt with by regulation under the Act currently).  

Self-serving as it may be to say it, the fact that so many requirements and conditions pertaining to the creation and management of condominiums are to be included in the regulations rather than the Act, speaks to the importance of seeking legal counsel when undertaking any major endeavours and, indeed, even for much of the day-to-day management of the corporation.
]]>