Canadian Underwriter

Ontario politicians debate bill proposing condo insurance changes, licensing of condo managers

September 23, 2015   by Canadian Underwriter

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A proposal to update Ontario’s condominium insurance rules, and to license condominium managers, is currently before the legislature.

Bill 106, the Protecting Condominium Owners Act is before the Ontario legislature

If passed into law, Bill 106 “would update rules and requirements relating to insurance when damage occurs to a unit or the building,” said Chris Ballard, Liberal MPP for Aurora-Newmarket and parliamentary secretary to government and consumer services minister David Orazietti, at Queen’s Park. “Creating a definition of a standard unit would help to clarify insurance obligations for condo owners.”

When they tabled the budget last April for the 2015-16 fiscal year, the ruling Liberals said they would create two new administrative authorities: one to license condo managers and the other to improve education and dispute resolution for condo corporation boards and owners.

On May 27, Orazietti tabled Bill 106, the Protecting Condominium Owners Act, which is on the agenda for debate Wednesday.

With Bill 106, the Liberals propose to “clarify and standardize the circumstances when an owner would be required to pay an amount up to the corporation’s deductible with respect to property damage,” Ballard said last week after the bill was tabled for second reading.

“If an owner causes damage to a unit, the common elements or any assets of a corporation, an amount, up to a maximum of the corporation’s insurance deductible, is added to the contribution to the common expenses payable by the owner, subject only to a declaration amendment,” the province stated in an explanatory note on Bill 106.

The bill also proposes to create an authority which would “provide reliable education and awareness to the condo community” and to “serve as a registry of information about condo corporations,” Orazietti told MPPs, adding it “would create an expedited, low-cost condo dispute resolution centre to help resolve the most common issues.”

Such an authority “could divert approximately 75% of all cases from costly court litigation, mediation and arbitration, saving residents and condo corporations tens of thousands of dollars each year,” Orazietti added during a debate last week.

Bill 106 also proposes a “licensing authority to administer the licensing and regulation of condo managers and establish minimum qualifications and mandatory training standards,” Orazietti said.

“At the root of almost all of the problems we’ve had with condominiums, when there has been fraud, when there has been tampering with the reserve funds, when there have been transactions or acquisitions by the condo that were not legal or have burdened condo owners with things that were expensive – it is really setting a standard for condo managers and buildings that’s transparent,” said Glen Murray, minister of environment and climate change. “So now they will be licensed. Both the builder-developer and that first board of fresh young faces that takes over from the condo board will actually now have the ability to go to a place and see an independent assessment and know that they’re not fly-by-night operations, and they’ll know what the record of the condo management company is.”

Related: Condo Risks

Without a reform of existing law, there could be “increased potential for fraud and mismanagement” in condo corporations, Orazietti suggested, as well as more disputes between owners and between owners and boards.

If passed into law, Bill 106 “would forbid condo corporations from finalizing some contracts until they had fulfilled certain procurement rules, ensuring better management in the interests of condo owners,” Ballard said earlier. “The proposed legislation would give owners more information about their condo corporation’s financial matters and provide more control over important changes. Regulations under the act would also clarify rules by detailing how condo corporations can determine if the reserve funds are adequate.”

Opposition members spoke last week partly in favour of Bill 106.

“The bill includes important and much-needed reforms to condo board governance and finance,” said Teresa Armstrong, NDP MPP for London-Fanshawe. “Condo owners will benefit from greater training and assistance for condo board directors. Owners will have more power to see important corporation documents, to requisition meetings and to ensure that large expenditures do not go without consultation and notification of owners.”

But Jagmeet Singh, MPP for Bramalea-Gore-Malton and the NDP’s government and consumer services critic, suggested there should be a tribunal for disputes between condo owners and developers and condo managers – not just between condo owners and boards.

“It only makes sense that if a condominium owner wants to raise a complaint, they should be able to raise all of their complaints in that tribunal,” Singh told the legislature during debate on second reading. “Now, the way the system works is that you can raise some complaints to this tribunal when it comes to your condominium board, but if it’s a developer issue or if it’s a condominium manager issue, you have to go to court. We all know how difficult it is to go to court, to navigate the court system, how costly it could be and how difficult it could be for someone who doesn’t understand the court system or is not familiar with it.”

Randy Hillier, Progressive Conservative MPP for Lanark-Frontenac-Lennox and Addington, noted Bill 106 would create a “newly-delegated administrative authority” with tribunal functions.

“This will be a licensing body as well as an adjudicative body,” Hiller said. “To have those functions wrapped up in a subordinate body of the Legislature that has no scrutiny over it, no oversight of it — I think we’re living in a bit of a dream world if we believe that we are going to achieve the results that we want to achieve of having expeditious, efficient, low-cost remedies to disputes. We won’t be able to actually look into what they’re doing. We won’t be able to see what the due process, what the rules of that tribunal will be. We won’t even be able to see what the statistics and the data are for complaints registered, complaints remedied or the cost.”