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Proposed Ontario condo authority lacks adequate oversight: Opposition


October 7, 2015   by Canadian Underwriter


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Ontario’s ruling Liberals say their proposed condominium law would clarify rules on insurance and paying for property damage, but opposition critics contended Tuesday that the proposed licensing and adjudicative body would be “weak in accountability and transparency” and would not address disputes between owners and builders.

The Ontario government is proposing changes to condominium rules, including insurance

Bill 106, the Protecting Condominium Owners Act, is before the legislature for second reading.

If passed into law, the legislation would “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,” said Chris Ballard, parliamentary secretary to government and consumer services minister David Orazietti, during a debate last month.

“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 government stated in an explanatory note on Bill 106.

The Liberals are also proposing to create an organization that would function as a condominium dispute resolution centre.

With Bill 106, the Liberals propose to create a “licensing authority to administer the licensing and regulation of condo managers and establish minimum qualifications and mandatory training standards,” Orazietti said during an earlier debate on the bill.

“It creates a specialized body which will be able to resolve disputes that may take place within a condominium,” Yasir Naqvi, government house leader and Minister of Community Safety and Correctional Services, told the legislature Tuesday at Queen’s Park in Toronto. “It takes the pressure away from our court system; it helps resolve condo issues in a low-cost manner; and it really puts a focus on not having an adversarial, litigious process but a process that is more driven through alternative dispute resolution mechanisms like mediation.”

If the bill is passed into law, then corporations, owners, mortgagees and purchasers would be able to apply to the new Condominium Authority Tribunal for resolution of certain disputes. It would not have authority to hear disputes on ownership or liens. The tribual would have exclusive jurisdiction to exercise its powers and appeals on questions of law would go to Divisional Court.

The proposed condominium authority would have the power to collect fees from condominium corporations, said Laurie Scott, Progressive Conservative MPP for Haliburton-Kawartha Lakes-Brock. Those fees, she suggested Tuesday, would be passed down to individual condo unit owners.

“It begs the question as to why condo owners are expected to pay for this authority and for property managers’ licensing when they are employees of property management firms,” she said. “As owners, they’re going to have to absorb a lot of costs with this newly delegated authority, so we have to be sure we get it right.”

The bill also leaves a “gap” in dispute resolution, said Jagmeet Singh, the New Democratic Party’s critic for government and consumer services.

“While we’re seeing an improvement in terms of having a dispute resolution mechanism – that’s good – but it doesn’t provide for a mechanism to address other disputes beyond just the condominium board,” added Singh, MPP for Bramalea-Gore-Malton. Owners and residents also have disputes with condominium builders and developers, Singh noted.

“So that area has been left unaddressed by this bill,” Singh claimed.

NDP members spoke partly in favour of the bill.

“Condo owners will benefit from greater training and assistance for condo board directors; and the owners will have more power to see important corporation documents, to request meetings and to ensure that large expenditures do not occur without consultation or notification of the owners,” Lisa Gretzky, NDP MPP for Windsor West, said Tuesday.

However, the licensing and adjudicative body “seems awfully weak in accountability and transparency,” Scott said Tuesday.

Bill 106 proposes to give the auditor-general the authority to audit the condominium authority, but “this delegated administrative authority has little reporting mechanisms back” to the legislature, Scott added.

In Bill 106, the Liberals also want to expand the criteria for condominium corporation directors to include disclosure obligations and required training.

“Protection from liability for directors and officers is expanded to cover cases where the individual relies in good faith on a report or opinion of a reserve fund study provider,” the government stated in its explanatory note.