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The ‘New Condo’ Act Moving Through Second Reading

You will certainly recall that Bill 106 (the Act to amend our 1998 Condominium Act and to enact other condo-related legislation) was introduced to the Legislative Assembly of Ontario for first reading on May 27, 2015.   After the dog days of summer, Queen’s Park has resumed its work this week and the ‘new Condo Act’ is high on the list of priorities.

Indeed, on September 15, David Orazietti, the Minister of Government and Consumer Services, has moved Bill 106 to second reading.  Our MPPs debated the bill for nearly 6 hours over three days (September 15-17).  The debate is set to resume on September 23.

On the first day of debate, Mr. Orazietti presented Bill 106 with the following introductory words:

Ontario continues to be at the centre of North  America’s condominium boom. This success has been a double-edged sword. Condominiums, which were not so long ago considered a niche form of ownership, have grown to play a major role in providing a housing option of choice for millions of Ontarians. Condo communities offer convenient, accessible and affordable living that caters to a wide range of different lifestyles.

Many condominiums are clearly well-managed and maintained and meet the expectations of owners and residents. However, the rapid growth of the condo sector has also led to challenges and conflicts that threaten the well-being and investment of condo owners.

The Protecting Condominium Owners Act, if passed, will introduce much-needed measures to strengthen protection for those who buy and live in condos. This is a critical step forward to ensure that we are meeting the needs of an ever-growing market.

The Minister of Government and Consumer Services reminded the assembly that the proposed legislation was based on over 200 specific recommendations from condo owners, residents, developers, managers and industry experts through a very comprehensive public review. The proposed legislation would make sweeping reforms to the existing Condominium Act and would make a series of changes to the Ontario New Home Warranties Plan Act (Tarion).  As importantly (and perhaps more importantly), the proposed legislation would establish a new act regulating the province’s 2,500 condominium managers. This act would require them to be licensed and to meet certain qualification and training requirement.

Like many, Jim McDonell (MPP for Stormont – Dundas – South Glengarry) indicated that he was a little worried about what was “in the meat of the legislation versus what’s in its regulations”. Indeed much of the details of how this proposed legislation will work has yet to be adopted through regulations.

The input from Randy Pettapiece (the MPP for Perth-Wellington) was very insightful and is well deserving of a read. While he recognizes the importance of protecting condominium owners and their families, he voiced some concerns with some of the doors left opened by the proposed legislation and fears the government is “re-inventing the wheel”.

One of his concerns focuses on the lack of clarity on what will constitute  “adequate reserve funds”.  He is of the view that the reserve fund study requirements must be standardized. On this, he stated:

… we need to ensure that reserve funds meet each individual corporation’s needs. I have heard from those affected in cases where the corporation has required significant contributions for repairs that the owners were not prepared for. This is unacceptable and defeats the purpose of reserve funds and reserve fund studies. Financial management issues surrounding reserve funds are already issues for many condo buildings, and they must be addressed to keep pace with the current condo boom.

He is also concerned that the bill will result in increased red-tape and additional levels of bureaucracy. While he welcomes compulsory licensing of managers, he strongly disagrees with how the government will implement this licensing.  In particular, he disagrees with the creation of yet another administrative authority. He is also concerned with the cost associated with this, which cost will naturally be passed onto condominium owners. The cost for this administrative authority is expected to be in addition to the cost associated with the setting up of the Condominium Authority and of the Condominium Tribunal.

He is also concerned with the proposed levy to be imposed on condo owners. He calls it “another government tax grab“.  This levy, he says, which may range from $1 to $3 per month / per owner, would likely not be sufficient to cover the costs of these new authorities.

In response to the suggestion that these new authorities will result in a cheaper and faster dispute resolution mechanism, he asked:

“When is the last time this government did much of anything cheap or quick?”

As indicated above, the debate was adjourned, after two sessions of debate, without a vote having been held on Bill 106.  The debate is expected to continue on September 17.  Bill 106 is then expected to be referred to be further debated in Committee.

For a summary of Bill 106 or for more information on how a bill becomes law, check our blog of May 28.

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