The Dirt: Gov’t moving fast on reform of still-modern condo law

The provincial government recently announced its long-awaited public review of the Condominium Act with a call for input from owners, residents, and other stakeholders in advance of an expected major overhaul of the legislation.

Although industry groups have insisted that legal reform is well overdue in the area of condominium law, the truth of the matter is that the government completely revamped the Condominium Act in 1998 with changes coming into force in 2001.

Compared to the almost glacial pace of legislative reform in almost every other area of the law, the Condominium Act is relatively nascent and the proposed modernization and strengthening of the legislation called for by the government is nothing short of fast and furious.

The legislative review comes on the heels of bill 72, a private member’s bill launched by NDP MPP Rosario Marchese with a number of proposed amendments to the act that would make it more of a prophylactic consumer protection legislation by adding features such as, most notably, a tribunal to hear the plethora of disputes typically involved in condominium living.

What’s driving the call for reform is the explosive growth of condominium construction in the province since the passage of the 1998 version of the act.

According to a press release by the joint government relations committee of the Canadian Condominium Institute and the Association of Condominium Managers of Ontario, there are now more than 1.3 million Ontarians calling a condo their home.

Nowadays, condominiums comprise almost 62 per cent of new home construction in the province. Although strongest in the Greater Toronto Area, condominium growth has spread throughout much of the province with 104 of 107 Ontario ridings now having condominium projects.

Although the surge in condominium ownership seems to be causing politicians to fall over each other in a rush towards legal reform, much of the recent call for change doesn’t really derive from the governance issues that are germane to the Condominium Act.

Instead, most of the recent popular press concerning condominium problems are really no more than construction issues more properly governed by the Ontario Building Code, the Ontario new home warranty program, and tort and contract principles inherent in construction law generally.

For instance, the recent Toronto Life article, “Trouble in Condoland,” focused on construction defect disputes in certain high-profile Toronto buildings, but it’s not really clear that the issues at the heart of those matters would fall under the Condominium Act, reformed or otherwise.

They are, at most, construction issues that might have arisen just as readily in office, apartment or any other high-rise construction.

Miller Thomson LLP’s Audrey Loeb, an architect of the existing version of the Condominium Act, feels that any amendments will have to address the phenomenon of investor-owned buildings with large numbers of rental units.

As Loeb eloquently put it during a CBC interview recently, the disenfranchised minority of the future will be the remaining owner-occupiers “who are living in communities of tenants rather than in the condominium community environment that the government originally anticipated would be there when condominium communities were built.”

Although the announcement really just begins the consultative stage of legislative reform, there’s an expectation that, at the end of this reform process, the amendments to the act will likely include increased consumer protection for buyers, more comprehensive rules for condominium finances and reserve-fund management, revisions to board governance, accreditation of condominium managers, and enhanced dispute-resolution protocols.

Many eyes are looking to British Columbia, which recently introduced legislation to develop an online dispute-resolution protocol for condominium owners.

If the legislation becomes law, an independent tribunal will provide online dispute-resolution tools and, where necessary, hold hearings to address condominium-related matters.

On the one hand, this may result in a noticeable increase in the number of disputes. On the other, such a mechanism would take these issues out of the courts.

It’s important to note that not all condominium lawyers see the need for wholesale reform of the act. While the Toronto Life article did highlight the problems in certain buildings, the demand for condominium units suggests that, by and large, the vast majority of owners and occupants are probably quite happy with their homes.

Instead of wholesale reform of relatively modern legislation, it may be just a matter of tweaking the existing law and persuading the courts to properly enforce the existing provisions.

In many cases, the courts have openly skirted the plain and obvious intent of the act in order to craft their own solutions to the complexities inherent in condominium life.

As a result, jurisprudence related to condominium law has been wildly inconsistent.
Whatever reforms come of the process, it’s unlikely there will be anything that substantially dismantles the current system.

The foundations already exist for a system of condominium ownership in Ontario. Based on them, condominiums have beco
Jeffrey W. Lem is a partner in the real estate group at Miller Thomson LLP. His e-mail
address is
[email protected].

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