Condo law reform in Ontario

Bill 72 improves upon the province's existing Condominium Act
Monday, July 30, 2012
By Bruce Reynolds & Sharon Vogel

As members of the Ontario legislature sang him “Happy Birthday” on May 10, NDP MPP Rosario Marchese likely hoped he would be gifted this year with the passing of his private member’s bill reforming Ontario’s condominium laws.

Bill 72 is Marchese’s fourth kick at the can at drafting legislation that increases protection for condo owners. While no previous attempt could get past the committee stage – where Bill 72 now finds itself after passing second reading – Marchese believes he “might be lucky enough to get (the bill) through the whole process.”

If passed, Bill 72 would become the Property Owners’ Protection Act, 2012, and amend the existing Ontario New Home Warranties Plan Act, Ontario Building Code and Condominium Act, which, despite the province’s condo boom, has not been substantially altered since it came into force more than a decade ago.

Here are the five major changes being proposed.

1. Licensing of property managers
Bill 72 introduces a licensing requirement for property managers. A property manager will be considered to be any person who manages the finances, maintenance, repairs, and enforcement and compliance of the declaration, bylaws and applicable legislation of a condominium. The property manager will be required to meet certain qualifications and possibly pay a fee before being issued a licence by the Ministry of Consumer Services.

2. Creation of a review board
Currently, if a condo owner has an issue with a developer, the avenues available for addressing the dispute include mediation, arbitration or application to the Superior Court. These can take considerable time and may sometimes be expensive.

Bill 72 includes the creation of a review board that would aim to resolve matters quickly. Matters to be addressed by the review board would be heard by a panel staffed by members that have “demonstrable experience and knowledge of homeowner advocacy and consumer protection.”

3. Expansion of Tarion
Tarion, a corporation that is the regulator of Ontario’s new home building industry, currently provides one year warranties for new condo owners.

Bill 72 expands warranty coverage to five years and explicitly extends it to include defects in windows, doors, caulking and other materials that might lead to water leaks, as well as defects in material and work related to electrical, plumbing and heating delivery and distribution systems.

Bill 72 would also have Tarion cover condominium conversions as opposed to just new condominium construction.

4. Opening of reserve fund
Presently, condo owners contribute towards a reserve fund through their common expenses. This fund can be used by the condo board without condo owners’ consent for major repair and replacement of the common elements and assets.

Bill 72 opens up the reserve fund for any repair and replacement of common elements following reasonable wear and tear, and also for the installation of renewable and prescribed energy-efficient technologies – again, without condo owner consent.

5. Imposing a duty of fair dealing
Bill 72 establishes a formal duty of fair dealing on every declarant and corporation, which, if breached, gives a right of action to damages. Marchese says he hopes the duty “will force the developer to do what he or she said prior to construction.”

Bruce Reynolds and Sharon Vogel are partners in the construction, engineering, surety and fidelity group at Borden Ladner Gervais LLP. Bruce can be reached at 416.367.6255 or breynolds@blg.com. Sharon can be reached at 416.367.6148 or svogel@blg.com.

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