CONDOMINIUM HANDBOOK
(ONTARIO)
Fifth edition April, 2001
For Directors, Managers, Owners and Purchasers
Gerry Hyman, Q.C., LL.M., F.C.C.I.
Published by Canadian Condominium Institute
To Bryna
and to
Gwen, Andrew, Wendy, Jamie, Karen and Sandra
I am grateful to Ron Danks for his valuable assistance in reviewing and commenting upon the manuscript.
INTRODUCTION
Condominium Handbook is intended to explain the nature of the condominium concept in Ontario and the impact of the new Condominium Act in a non-technical and readable manner. Complex analysis has been avoided and case citations, which may be relevant to lawyers, have been omitted.
Ontario's first Condominium Act was passed in 1967 and was replaced by a more comprehensive statute in 1979. It took another two decades for the passage of the Condominium Act, 1998, in December 1998 and its proclamation in May of 2001, to finally produce reforms which were long overdue.
The new Act is a mammoth document! It does much more than updating and amending the previous legislation. The Act exposes us to a barrage of new and sometimes novel condominium concepts. There will undoubtedly be problems in the understanding and implementation of so many untested statutory provisions. Some of the sections of the Act have already been identified as faulty. Repairs resulting from wear and tear, for example, are treated as maintenance, which may prevent condominium corporations from using reserve funds to replace worn out or deteriorated common elements (Chapter Nine). A loophole exists which will enable boards to avoid notifying unit owners of intended common element changes which are non-substantial but nonetheless significant (Chapter Ten).
One of the fundamental defects in the previous Act remains. Developers will sometimes still be able to elect a majority of the directors of the condominium corporation at the turn-over meeting, thus retaining control of the board (Chapter Five).
The new Act, on the other hand, improves upon the previous legislation in many ways, including: clarifying the disclosure obligations of developers to purchasers and the obligations of developers to provide documentation at and following the turn-over meeting; reducing the vote required for declaration and description amendments; delineating the rights and obligations of condominium corporations in regard to telecommunications agreements; permitting teleconference board meetings.
The Act also expands the ways in which notices may be given to unit owners; reduces the quorum for owners' meetings; requires reserve fund studies; specifies permitted investments; outlines requirements relating to performance (technical) audits; clarifies required voting percentages; extends common expense lien priority to non-residential units; eliminates the requirement to call owners' meetings for all common element changes; permits owners to carry out common element changes under agreement with the corporation.
The reader will be relieved to discover that this book is considerably shorter then the new Act. This was accomplished by ignoring provisions of interest mainly to developers and, for the sake of brevity, affording to other provisions less space than they may deserve. As a result, the writer is forced to concede that Condominium Handbook cannot be a substitute for legal and other professional advice for specific problems encountered by the reader.
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INTRODUCTION How a Condominium is Created Who Owns What Types of Condominiums CHAPTER TWO THE CONDOMINIUM ACT, DECLARATION, The Condominium Act, 1998 Regulations Under the Act Declaration Declaration Amendments by the Corporation Address for Service Amendments by a Judge or Director of Titles Description By-Laws Confirming, Registering and Amending By-laws Special By-laws Occupancy Standards By-Laws . . Human Rights Code Rules Passing and Amending Rules . Shared Facility By-Laws and Rules CHAPTER THREE What Is It? What Does It Do? Entry to Units Right to Sue The Board of Directors Election of Directors Building by Building Voting Owner Occupied Unit Representation Remuneration Vacancies on the Board of Directors Removal of Directors By-Laws for Removal Replacement of Directors Meetings of the Board of Directors Notice of Directors' Meetings Delegation of Authority
Officers CHAPTER FOUR Sale Agreements The First Board of Directors The First Owners' Meeting The Turn-Over Meeting Subsequent Turn-Over Cost of Preparing Turn-Over Documentation Court Order Upon Default The Turn-Over Board Reasons for a Developer to Retain Control
The One Vote per Owner Concept CHAPTER FIVE Construction Deficiencies Guarantee Fund Limitation Periods Major Structural Defect Performance Audit CHAPTER SIX First Owners' Meeting and Turn-Over Meeting Annual General Meetings Requisitioned Meeting Notice Quorum Transaction of Business Voting at Owners Meetings Proxies Advance Polling Conducting Owners' Meetings CHAPTER SEVEN What are They? Calculation of Common Expense Contributions Common Expense Lien Registration Amounts Secured by the Lien Lien Procedure Lien Priority Common Expense Arrears Payable by Tenant CHAPTER EIGHT Obligation of Corporation Reserve Fund Study Reserve Fund Plan Use of Reserve Fund Holding and Investing Reserve Funds Investment Plan Taxation of Reserve Funds CHAPTER NINE Repair and Maintenance Obligations Owner's Failure to Repair or Maintain Unit Improvements Standard Unit Normal Wear and Tear CHAPTER TEN Changes by the Corporation- Previous Act The New Act Substantial Changes Non-Substantial Changes Changes by Unit Owners Exclusive Use Common Element Changes Registration CHAPTER ELEVEN Contents Legal Review
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CHAPTER TWELVE OWNERS AND OCCUPIERS - RIGHTS Compliance Records Unit Alterations Occupancy Standard By-laws Lot-line Condominiums Enforcement Compliance Order Mediation and Arbitration Other Mediation and Arbitration Requirements Appointment of an Inspector or Administrator Oppression Remedy Damages Offences and Fines CHAPTER THIRTEEN Directors' Management Functions Standard of Care Protection from Liability Acting in Good Faith Conflict of Interest Indemnification of Directors Liability Insurance Avoiding Liability CHAPTER FOURTEEN The Minto Case CHAPTER FIFTEEN Administrative Charges by Corporation Declaration Restrictions Rights and Obligations of Tenants Court Order Notice to Corporation CHAPTER SIXTEEN Property Insurance Construction Defect Exclusion Unit Improvements Replacement Cost Responsibility for the Deductible Insurance Trust Agreements Breach of Policy Termination Use of Proceeds Rights of Mortgagees Owners' Policies Conflict Other Required Insurance Optional Insurance Directors and Officers Liability Insurance Bonding CHAPTER SEVENTEEN Financial Statements Audit Committee Appointment of Auditor Removal Resignation Functions Amendment of Statements CHAPTER EIGHTEEN CHAPTER NINETEEN Conditions for Amalgamation Procedure Reserve Fund Study CHAPTER TWENTY Telecommunications Agreements Termination of Telecommunications Agreements Easements and Telecommunication Control Units CRTC Regulations Mutual Use Agreements Termination of Other Agreements CHAPTER TWENTY-ONE Considerations Purchasing from a Developer Disclosure Statement Cooling-Off Period Insufficient Disclosure Statement Material Change and Revised Disclosure Statement Definition of Material Change First Year Budget The Purchase Agreement Developer's Obligations Deposits Payment of Interest Interim Occupancy of Unit Payment upon occupancy Ontario New Home Warranties Plan Act
Purchasing a Resale Unit Status Certificate Omission of Information Default in Giving a Certificate CHAPTER TWENTY-TWO Common Element Condominium Corporations Phased Condominium Corporations Vacant Land Condominium Corporations Leasehold Condominium Corporations INDEX |
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