June 8, 2012
It has been eleven years since Ontario's Condominium Act, 1998 came into force. In that time, the condominium market has changed dramatically in both size and complexity. The Ontario government recognizes that a comprehensive review is necessary to modernize the Act so it reflects the current and future needs of owners, residents and other stakeholders in the condominium community.
On June 8, 2012, the government announced that the Ministry of Consumer Services will launch a review of the Act through a public consultation to identify a comprehensive set of issues and long-term solutions.
The consultation involves working in a new way, through an innovative public engagement approach, with people from the condominium community.
The goals of the review are to:
This webpage provides background for anyone interested in the issues facing the condominium sector and who may want to become involved in the review. It outlines:
The condominium sector has changed dramatically since the Act first came into force in 2001. Over one million people live in condominiums in Ontario. In 2011, Toronto had the fastest growing high-rise condominium market in North America, with an estimated 120 buildings under development. In 2010, the Municipal Property Assessment Corporation estimated that there were over 525,000 condominium units in the province.
There is a wide variety of types of condominiums today – many did not exist when the Act came into effect. Today we see:
Despite its immense popularity, condominium ownership remains an often poorly understood form of housing. The Condominium Act, regulations and individual condominium declarations and by-laws contain complex requirements and rules for security, maintenance costs, and for the use and enjoyment of common elements. Condominium ownership is quite different from owning a freehold home.
The current condominium development boom has brought to light significant concerns for buyers, owners, condominium boards, and the businesses that build, sell and manage condominiums. The ministry is aware of a range of concerns, including:
Several other Canadian jurisdictions have updated or are currently seeking to update their condominium legislation. British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia and Newfoundland and Labrador have all completed stakeholder consultations in reviewing their respective condominium legislation.
Successful legislative reform requires that everyone affected have an opportunity to have their voice heard in the process. This is especially important when the subject involves rules that affect people directly in their homes and home communities.
The Ministry of Consumer Services is planning an approach that will engage interested individuals, groups and organizations affected by the Condominium Act, including owners, residents, developers, condominium board members, property managers, builders, brokers and lawyers. Through an open and inclusive public engagement approach, the ministry will ensure that interested individuals and organizations have the opportunity to speak about their issues, hear the concerns of others, and work together to develop solutions.
There are three components to this public engagement approach:
There are several benefits to using the public engagement approach to policy development, including:
Reaching out in a comprehensive, collaborative way
The identification of issues will be in the hands of the people that live them. Through a participatory, collaborative process, condominium residents and other stakeholders will have the opportunity to hear each other's concerns and work together to explore solutions.
Stakeholders "owning" their issues
Engaging condominium residents and other stakeholders to share their views and hear the views of others can bring Ontario's condominium community closer together.
The approach will require the stakeholders and condominium residents to work together to identify issues and concerns, and to find solutions. Because these stakeholders are directly involved from the beginning, there will be a strong sense of ownership over the outcome.
Given the variety of stakeholders involved, any single issue may give rise to different ideas about how to resolve it. When the process gives stakeholders the chance to hear and understand each other's viewpoints, there is a greater likelihood of finding solutions that make sense for the community.
What We Know Today
We know there are challenges facing the condominium community in Ontario. The review will draw on work already done by organizations like the Association of Condominium Managers of Ontario (ACMO) and the Canadian Condominium Institute-Toronto and Area Chapter, which prepared a detailed submission with over 200 recommendations to reform the Act.
In 2010, the ministry conducted an online questionnaire of condominium owners to get a snapshot of their concerns. Over 3,100 responses were received which provided valuable information and insights into the condominium sector.
Overview of Issues Identified to Date
Issues in the condominium community appear to fall broadly into five key areas:
Below is a sampling of issues that have been raised. This is not an exhaustive list. The public engagement approach is intended to surface a comprehensive set of issues natural to a sector of this size and complexity.
Condominium Board Governance
A substantial portion of the Condominium Act is dedicated to the running of a condominium corporation. Suggestions have been made to better facilitate the relationship between unit owners and the corporation (via the board). Some of the issues we have heard so far include:
Condominium owners and corporations have raised concerns that the existing legislated dispute resolution mechanisms of mediation and arbitration are costly and time-consuming. Stakeholders in other provinces have raised and attempted to resolve similar concerns.
Some stakeholders have requested a third party dispute resolution mechanism in Ontario, similar to the Landlord and Tenant Board. Specific issues include:
Condominium Finances and Reserve Fund Management
Concerns have been raised about the long-term viability of condominiums in the province. Condominium ownership is a relatively recent concept in Ontario – the first Act came into effect in 1978. In particular, there has been some recent media coverage about buildings that are in serious states of disrepair and which have required court-appointed administrators.
Specific issues include:
Consumer Protection for Buyers
Many condominium purchasers, condominium owner associations and boards, have raised concerns that developers are treating them unfairly and have asked the Act be amended to ensure fair dealing. Specific issues include:
Developers, on the other hand, have told us that existing sale and contract materials provide home buyers with clear options and disclosure of key terms. Further, the flexibility of terms that may be offered contributes to a healthy condominium marketplace with many choices for consumers.
Expertise/Accreditation of Condominium Managers
Concerns have been raised about condominium managers who do not understand the Act or their professional responsibilities, and who are also improperly advising condominium boards. Specific issues include:
Residents have also raised condo-related issues that are beyond the scope of the Condominium Act. Over the years, recommendations have included changes to other statutes, including the Building Code, the Planning Act and the Ontario New Home Warranties Plan Act. Some of these issues may be raised in the course of the review. However, the focus will be on finding solutions to issues within the scope of the Condominium Act. Recommendations related to other legislation and aspects of condo living will be brought forward to the ministries responsible.
Details of the public engagement process will be announced this summer. In the meantime, you can stay informed on the status of the Condominium Act review and register your interest in becoming involved. You can: