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New Regulations on Insurance, Complaints Procedure and the Code of Ethics for Condo Managers

New year: more changes to the condo industry.  The province of Ontario has issued today an update on recent condo law changes taking place in early 2018. Specifically, the province has confirmed the implementation of more provisions and of new regulations under the Condo Management Services Act, which will come into effect on February 1, 2018. In this post, we focus on those changes affecting Condo Managers.

New Code of Ethics

You may recall that the province sought your comments on a draft Code of ethics last September.  Well, the final version of the Code of Ethics has been adopted and can now be found in Regulation 3/18 adopted under the Condo Management Services Act. In  a nutshell, the Code of Ethics includes (but is not be limited to) the following obligations:

  • Managers shall treat every person they deal with fairly, honestly and with integrity. They shall also treat every person they deal with equally, without discrimination, harassment or violence and they must provide reasonable accommodation for persons with disabilities;
  • Managers shall provide conscientious, courteous and responsive service and must demonstrate reasonable knowledge, skill, judgment and competence when providing services and opinions. They shall use best efforts to prevent error, misrepresentation, fraud or unethical practices;
  • They should not provide any opinion or advice unless they have the necessary education or experience to do so;
  • They are to ensure they use current forms and documents;
  • They shall make and keep all reasonably required records;
  • They shall be financially responsible in providing condo management services;
  • They cannot misrepresent the type, class or conditions of their licence (general, limited or transitional);
  • They shall not engage in any act or omissions which, in the circumstances, would be regarded as disgraceful, dishonourable, unprofessional or unbecoming of a licensee;
  • Except as permitted or required by law, they are not to unreasonably interfere with the use and enjoyment of the common elements, units or assets of the corporation by owners, occupiers or directors;
  • They shall keep their client informed, in a timely manner, of all significant steps being taken by them and of the condition of the property. They shall not exaggerate or misrepresent material facts;
  • They must promote the best interests of their clients and they shall act diligently in executing their obligations towards the clients. They shall refer their client to someone else if they are not able to provide the required service with reasonable knowledge, skill, judgement and competence;
  • Except as otherwise required by law, they shall not disclose to a third party any confidential information without prior written consent of the person to whom the information relates.

Of interest, a manager shall not accept gifts if a reasonable person might conclude that the gift could influence the licensee when providing management services.  Think of the manager receiving a gift from a service provider. Would that gift be perceived as influencing the manager when recommending services to the corporation? This, however, does not prevent a manager from accepting a gift of nominal value as an expression of courtesy or hospitality.

Discipline Committees

Regulation 3/18 also implement provisions pertaining to the Discipline and Appeal Committees. The following elements may be of interest:

  • The Registrar has a maximum of 2 years to refer a complaint to the discipline committee;
  • The discipline committee must provide at least 45 days notice of a discipline hearing;
  • If the administrative authority is going to tender evidence at a discipline hearing, it must disclose it 30 days before the hearing. Anyone else filing evidence will have to disclose it at least 15 days before the hearing;
  • A copy of the decision of the discipline committee will have to be provided to the person having made the complaint;
  • A party to a discipline committee hearing will have 30 days to appeal the decision.

No interference with complaints

Managers (and management providers) shall not obstruct or prevent a person from making a complaint to the registrar or from providing information to the registrar, a director, a corporation or the management provider relating to the conduct of a licensee or relating to a potential contravention under the Act. Basically, you can’t prevent or discourage someone from complaining about managers.

Mandatory insurance for management providers

A condo management provider must maintain errors and omissions insurance that includes coverage for every condo manager they employ. They must also maintain fidelity insurance, including against losses arising from the dishonesty of the managers or other employee they employ.  Prior to entering into a management contract, the provider must provide a certificate of insurance to his clients.  The management provider must also notify his clients, in writing, of the cancellation, termination or any other material changes to the insurance coverage, within 15 days of such changes.

Obligations pertaining to the management contract

The new regulations impose various requirements on managers when entering into a contract.  Some of these obligations actually come into play prior to entering into the management contract. The following obligations may be of interests.

Prior to entering into a contract, the manager shall confirm in writing:

  • the kinds of services that may be appropriate for the corporation;
  • what kind of services and associates costs will be provided under the contract;
  • whether certain discount or services are contingent on other services being obtained from the manager. Think of the classic example of the discount you get from your internet provider if you also have your phone and/or cable with them.  This kind of “bundling” must be disclosed by management before entering into the contract;
  • whether some services will be provided by someone other than a manager;
  • whether another one of their client is involved in pending litigation with this new client;
  • whether another client has agreed to share in the provision, use, maintenance, repair, insurance, operation and administration of the same property.

Management of records

A manager (or management provider) who holds records for a corporation must ensure that they are maintained securely, accurately and with care.  They must also make the records available for inspection by the client as soon as reasonably possible and must transfer them to the client or provide a copy of them as soon as reasonably possible, upon request.

More stuff to read

The above is just a summary.  For those wishing to read the complete regulation, you can do so by clicking the links below:

The province has also developed a useful Guide to Condo Act Changes, which provides a good summary of these changes in “plain language”. It has also developed the Guide to the Condo Management Services Act.  This guide provides you with a summary of the key elements of this new legislation.

Finally, the province is providing a set of useful tools to demystify access to corporate records:

… and the beat goes on.

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