331 Military Trail, Scarborough, Ontario M1E 4E3, Canada
YOUR ROLE IN THE CONDOMINIUM COMMUNITY
· Attending and voting at member meetings
· Participating in the election of the board of directors
· Serving on the board of directors.
Responsibilities of the condominium board
· management of the corporation,
· making decisions on major repairs and maintenance of buildings and grounds
· communicating regularly with the condominium owners
· maintaining and repairing the assets of the corporation,
· hiring specialists, like engineers, to update the reserve fund study every three years
· fiscal responsibility for the corporation, and
· upholding and enforcing legislation such as the Condominium Act, the declaration, and all condo by-laws and rules
Must complete the Condominium Director Training Program
York condominium corporation number 84
OWNERS’ CHARTER OF RIGHTS AND RESPONSIBILITIES
Owners are encouraged to participate democratically and ethically in the affairs of the Corporation as follows:
WHAT ARE COMMON ELEMENTS? (Lash Condo Law)
The parts of the condominium corporation that are jointly owned by all the owners; such as,
· Common element gardens and trees
· Internal roadways
· Parking areas
· Driveways
· Internal street lighting
· Patio areas
· Grassed areas
· Etc.
MEMBER LEASING A UNIT (Lash Condo Law)
LANDLORD (whole unit or part thereof)
The Condominium Act of Ontario contains requirements for the lessor and tenants of a unit.
.
· The cost of repairs and maintenance to the common elements
· The cost of condominium management services
· The corporation’s insurance policies
· Utilities; such as: water usage, and common element electricity
· Garbage collection
· Winter maintenance
· Summer Maintenance
· Painting
· Etc.
· Each owner (member) is responsible for the maintenance of their own unit, and
· the corporation is responsible for the maintenance of the common elements and the repair of the entire property.
ROLE OF THE BOARD OF DIRECTORS
DIRECTORS DUTIES
ROLE OF CONDO MANAGEMENT
The manager is accountable to the board of directors.
Property manager responsibilities may include:
- Creating and maintaining records for the corporation
- Responding to member complaints
- Coordinating the maintenance and repair of the property
- Hiring and monitoring the performance of service providers
- Preparing draft annual budgets and monitoring the reserve fund
- Preparing status certificates
- Issuing meeting notices and reporting on the affairs of the corporation
- Organizing board meetings and overseeing administration of all owners’ meetings
- Monitoring the corporation’s insurance
- Preparing financial reports and arranging for audits
- Collecting fees
- Advising the board on financial responsibilities
- Advise the board on its obligations under the Act
CONDOMINIUM DOCUMENTS
IN CALENDAR YEAR ORDER
VOTING
QUORUM
PROXY, NOTARAIZED POWER OF ATTORNEY, ESTATE & CORPORATE REPRESENTATION
Condominium Declaration, By-laws and Rules: What’s the Difference?
by: Rod Escayola | November 22, 2016
Hierarchy of governing documents
The setting up and governance of condominium corporations in Ontario can be found in 4 different sources:
The provisions of any of these documents cannot be inconsistent or contradict the provisions of a document above it. For instance, the declaration cannot contradict the Condominium Act but it has precedence over the by-laws and the rules. Similarly, when a board adopts a new by-law or a new set of rules, these cannot be inconsistent with the Condominium Act or with the Declaration.
The Condominium Act
Ultimately, the Condominium Act governs most aspect of condominiums in Ontario. It regulates the creation, the ownership and the governance of condominiums.
Declaration
Condominium corporations are created by the registration on title of a declaration and description. Once the declaration is registered on title, the Condominium Act applies to and regulates the condominium. The registration of the declaration is done by the developer, or more accurately, by the declarant.
The declaration will, amongst other things, define the units and common elements of the corporation and specify the boundaries of each of them. It will define the percentage of ownership of each unit and set the proportion pursuant to which each unit must contribute to the common expenses. The declaration also usually contains conditions or restrictions with respect to the use and occupation of the units and common elements. For instance, the declaration will determine whether some units can be used for commercial purposes. It will also allocate as between the owners and the corporation the obligations and responsibilities of maintaining, repairing and/or insuring the units and the common elements. Declarations could contain pet restrictions. They could also prohibit or limit smoking in units or on balconies. Smoking is already prohibited on common elements.
The declarant is the entity which sets the precise provisions of each declaration. Declarations therefore vary from one corporation to another but can be modified at a later date. Generally speaking, the declaration can be amended by the owners if 80% to 90% of the owners agree to such amendment (it depends on the type of amendment being sought). This is a high threshold, which is usually difficult to attain.
In addition to the owners’ ability to amend the declaration through a vote, courts can correct a declaration if it contains an error or an inconsistency. A court will only make the correction if it concludes that it is necessary or desirable to make such a correction.
By-laws
By-laws deal with the governance of condominium corporations (ie. how they are run). For instance, by-laws may deal with the qualification of condominium directors, their remuneration (if any) and their term of office. It may deal with the quorum required to hold meetings (of the board or of the owners). It may grant a corporation with the power to borrow money. It may also define what constitute a standard unit for the purpose of determining the responsibility of repairing or maintaining improvements made to the unit. It may also restrict the use and enjoyment that a person other than the occupant of a unit may make of common elements (ie. whether the owner who leases his or her unit to a tenant use the pool or the gym). By-laws can also govern the management of a property.
By-laws may be passed, repealed or amended by the board of directors. They must, however, be reasonable and they cannot be inconsistent with the Act or the declaration. Before becoming effective, by-laws must be approved by a majority of the units of the corporation. Therefore, 50% +1 of all units must approve a proposed by-law. Once this happens, it must be registered on title. Only then does the by-law become enforceable.
Rules
The board can also make, amend or repeal rules. However, rules cannot be about anything and everything. Rules must be either:
Typical rules may therefore be aimed at preventing nuisance or interference between owners. They may deal with noise, for instance. They may impose parking restrictions. Pet restrictions and smoking restrictions can be found in rules (not in by-laws). These restrictions could also be found in the declaration, but they are far easier to adopt in the context of a rule.
Rules must also be reasonable and must be consistent with the Act, the declaration and the by-laws.
To pass, repeal or amend a rule, a board of directors needs to circulate the rule to the owners for a period of at least 30 days. The notice to owners must advise them that they have the right to requisition a meeting of the owners to submit the proposed rule to a vote of the owners. If no meeting is requisitioned within 30 days, the rule becomes enforceable. If a meeting is requisitioned, the rule becomes valid and enforceable unless at least 50% of the units participating at the meeting (in person or by proxy) vote against it.
Each of the declaration, by-laws and rules have a different purpose and are amended pursuant to a different mechanism, requiring a different level of support by the owners. Each of them, however, are equally enforceable. Owners and occupants have an obligation to abide by the Act, the declaration, the by-laws and the rules. Similarly, owners are entitled to require that others comply by them. The Corporation must take all reasonable steps to ensure such compliance.
Re-printed with permission from the CondoAdviser.ca
The Condo Authority (CAO) and Tribunal
The CAO: Background
The CAO: Fees
The CAO: Mandate
PART 1: Condominium Corporations
Definitions, Interpretation, Registration & Creation
What is a condominium corporation?
within the scope of authority granted therein.
Super Priority Legislation
The Act
The Declaration
The By-laws
The Rules
Declaration + Description = Condominium Corporation
Contents of Declaration
Contents of Declaration - Schedules
YORK CONDOMINIUM CORPORATION NIMBER 84 was registered prior to a the requirement for Schedules "D", "E" "F" and "G"; so, it is "GRANDFATHERED" against the need to have these "SCHEDULES".
Contents of Declaration (continued)
Contents of Description
Key Definitions in the Act
Encumbrance”
“Prescribed”
¤
Whenever the word “prescribed” appears in the Act, a reference is being made to the regulations made under the Act or the statute being discussed.
- i.e. status certificates must be in prescribed form
“Reserve Fund” - ¨Akin to a savings account for major expenditures in the future. ¨Defined in the Act as simply, “a reserve fund established under Section 93”. ¨Purpose of the reserve fund is solely to fund major repair and replacement of the common elements and assets of the corporation.
¨i.e. Legislation Act, 2006 -“individual” -“person”
Interpretation: Computation of Time
The Condo Authority (CAO) and Tribunal
The CAO: Background
¨The Ministry of Government and Consumer Services is accountable for the performance of the CAO and is responsible for reviewing annual reports, business and strategic plans (including budgets), and ongoing monitoring and oversight.
The CAO: Fees
The CAO: Mandate
¨The CAO was launched on September 1, 2017, providing new services for condo communities. These include: ¤easy-to-use information to help owners and residents understand their rights and responsibilities ¤free online resources to help people identify and resolve common issues before those issues escalate into disputes ¤mandatory training for all condo directors elected or appointed after November 1, 2017 ¤resources to help condo owners and residents resolve common issues ¤an online dispute resolution service through the new Condominium Authority Tribunal (CAT)
The CAO: Director Training
The CAO: The Condominium Authority Tribunal (CAT)
¨The CAO: Condo Returns
¨A regulation under the Act requires all condominium corporations to file condo returns with the CAO. Filing a return means providing specified key information about the corporation
¨There are four different types of returns. The number and type of returns that each corporation must file depends on the date that the corporation was created and when its turnover meeting was held
¨The CAO is required to publish on its website the information that it receives in returns
The CAO: Contact Information
¨www.condoauthorityontario.ca ¨info@condoauthorityontario.ca ¨416-901-9356 or1-800-854-9014 ¨Facebook and Twitter
Types of Condominiums
There are two main types of condominiums:
¨Freehold; and ¨Leasehold
Freehold condominiums fall into one of four categories:
¨Standard condominium corporations ¨Common elements condominium corporations ¨Phased condominium corporations ¨Vacant land condominium corporations
Freehold Condominium Corporations: Standard
YORK CONDOMINIUM CORPORATION NUMBER 84
¨The most common type of condominium is the standard condominium corporation. ¨The majority of condominium corporations continue to be registered as standard condominium corporations and the majority of the Act focusses on same.
OWNERSHIP (Sections 10-15)
Part III of the Act (comprising of sections 10-15) deals with features of real property ownership as it effects condominiums.
Specifically, this Part covers:
(i)Type of property (ii)Individual ownership of units and common elements (iii)Easements (iv)The effect of encumbrances (i.e. mortgage, liens) existing on the property before registration of the description and declaration and their discharge (v)Property tax assessments
Type of Ownership (Section 10)
Units and common elements are real property for all purposes:
¨i.e. can be sold, mortgaged and leased
Easements (Section 12)
¨A legal term to describe someone’s right to use some part of another person’s real property for a specific purpose. ¨An easement does not give the holder of the easement right of “possession” of the property, but rather simply the right to use it. ¨For a condominium, easements are essential and necessary.
Easements (Section 12)
The following easements are automatically created and attached to each unit:
¨Supply of services such as electricity, water, plumbing and heating, and telecommunications ¨Providing physical support to the unit (support columns, foundations, other structural components) ¨Access to and installation and maintenance of shared services or facilities that are situated on the lands of the other condominium, where two corporations share services or facilities.
Effect on Encumbrances (Section 13)
Recall the definition of “Encumbrance”:
¨A claim that secures the payment of money or the performance of any other obligation (i.e. mortgage). ¨ ¨Section 13 deals with the effect of encumbrances over the condominium property which were created or registered against title to the property prior to the registration of the declaration.
Discharge of Encumbrances (Section 14)
¨Sets out procedures for removing or discharging from a unit’s title, those encumbrances which were registered against the entire property prior to the registration of the declaration.
Property Tax Assessment (Section 15)
¨Each unit, together with its appurtenant common interest, constitutes a parcel of land for the purposes of municipal (realty) taxes. ¨The common elements of a corporation that are not a common element condominium corporation DO NOT constitute a parcel of land for the purposes of municipal taxes.
Sale & Lease of Units (Sections 72-83)
First, a note on the Planning Act…
¨ ¨The Planning Act governs the subdivision of land in Ontario. ¨In certain instances, it will apply to condominium corporations.
Disclosure Requirements
¨This part of the Actis the essence of the Act as consumer protection legislation. ¨Purchasers of a new condominium unit are entitled to receive a “disclosure statement” designed to provide information to enable a purchaser to decide whether to proceed with their purchase.
Disclosure Requirements
¨When a purchaser decides to buy a unit in a new condominium project, s/he will be asked to sign an agreement of purchase and sale. ¨The signature on the agreement triggers an obligation on the declarant to deliver to the purchaser a current disclosure statement.
Disclosure Requirements
¨Section 72(3) of the Act stipulates what must be included in the disclosure statement. ¤i.e. Budget statement (prepared by the declarant for the one-year period immediately following the creation of the condominium corporation) ¤ ¨A declarant’s compliance with the disclosure requirements satisfies the consumer protection objectives of the Act and is the extent of a declarant’s obligations.
Disclosure Requirements
¨The Act is changing! The Act has been amended to include new disclosure requirements. However, these amendments have not yet been proclaimed into force. ¨Notably, the amendments include a requirement that, along with the disclosure statement, declarants deliver to purchasers a condominium guide. -The guide will be published by the Ontario government
Right of Rescission
¨Rescission is a legal remedy which seeks to restore the parties as closely as possible to their pre-contractual position. ¨Rescission is NOT just terminating a contract; but rather, unmaking it, or undoing it from the beginning.
Right of Rescission – Cooling-Off Period
A purchaser who receives a disclosure statement may rescind the agreement of purchase and sale and have any deposits refunded without penalty.
¨Purchaser may rescind for any reason ¨Purchaser must give a written notice of rescission ¨Rescission right is lost once purchaser receives title to the unit
Right of Rescission – Cooling-Off Period
Declarant must receive the written notice of rescission within 10 days of the later of,
a)the date that the purchaser receives the disclosure statement; and b)the date that the purchaser receives a copy of the executed purchase and sale agreement.
Right of Rescission – “Material Change”
Section 74(2) of the Act defines “material change”.
¨Generally, it means changes that would likely have led a reasonable purchaser to refuse to purchase or to exercise rights of rescission.
Right of Rescission – Material Change
¨The Actrequires that if there is a “material change” in the information contained in the last disclosure statement delivered by the declarant, then the declarant is required to deliver a revised disclosure statement or other notice to the purchaser. ¨Rights of rescission accrue to the purchaser upon a material change
Accountability for Budget Statement
¨Under the Actthe declarant is accountable to the newly registered corporation for the budget statement ¨The declarant must pay to the corporation any shortfall between the revenues paid or to be paid and the actual expenses in respect of the first fiscal year following registration
Sale & Lease of Units – Interim Occupancy
¨Defined as the occupancy of a proposed unit before the purchaser receives a deed to the unit that is in “registerable” form ¨During the occupancy period, purchasers pay a monthly occupancy fee to the declarant
Sale & Lease of Units – Status Certificates
The “status certificate” provides a snap shot of the health of the condominium corporation.
¨Any person can request a status certificate ¨It must be in prescribed form ¨It must set out specific financial and legal information about the condominium
Sale & Lease of Units – Status Certificates
¨The corporation can charge the prescribed fee to issue a status certificate, which is to be no more than $100 (including HST) ¨Upon written receipt of the request and payment of the fee, the corporation has ten days to issue the status certificate ¨The condominium corporation is bound by the information contained (or deemed to be contained) in the status certificate as of the date it is issued (or deemed to be issued).
PRACTICE POINT
Deficiencies in a status certificate can have significant (negative) consequences for both the condominium corporation AND the property manager. Property managers should ensure that the contents of the status certificate are correct and accurate before delivery. Negligently preparing a status certificate can amount to a breach of a duty of care.
Status Certificates
¨Ideally signed by two authorized signing officers of the corporation ¨In practice, carried out by an authorized representative of the property management company as agent for the corporation
Lease of Units
An owner who leases his/her unit to a tenant has obligations to:
¨Give notice to the condominium corporation along with information about the lease ¨Provide condominium documents to tenant
Condominium Corporations
Chapter 2
Condominiums vs. Business Corporations
Condominium corporations are creatures of statute.
¨They exist by virtue of the Act, and derive their powers from it. ¨A condominium corporation is an “artificial” person”.
Legal nature of a corporation:
Once created, a condominium has essentially the same rights as any other corporation:
¨Can sue and be sued ¨Can own assets including real property ¨Can carry out any other business subject to the limitations set out in the Act
Duties of the Condominium Corporation
Condominium corporation’s primary object and duty:
¨To control, manage and administer the property and assets, if any, on behalf of the owners (i.e. manage the affairs of the corporation). ¨To take all reasonable steps to ensure that the owners and occupiers of the units, amongst others, comply with the Act, Declaration, by-laws and rules of the corporation.
Easements, Leases and Licenses
The Actgives a corporation the power to grant rights to a person to use and travel over parts of the common elements by way of:
¨Easements ¨Leases ¨Licenses
Easements, Leases and Licenses
The Actgives a corporation the power to grant rights to a person to use and travel over parts of the common elements by way of:
¨Easements ¨Leases ¨Licenses
Telecommunications Agreements
¨The corporation may permit the telecommunications agreement by way of resolution of the Board and a by-law is not required as it is for other easements, leases and licenses. ¨If the telecommunications agreement is exclusive, it can only be terminated after 10 years; if it is non-exclusive and was entered into by a post-turn-over board, it cannot be terminated before the end of its term.
Action by the Corporation
The Act sets out when and how a condominium corporation can exercise rights to commence legal actions.
Action by the Corporation
Section 23 of the Act allows the corporation to commence, maintain or settle a legal action on its own behalf and on behalf of an owner for:
•Damages and costs with respect to any damage to the common elements and assets of the corporation or to individual units; and •A contract involving the common elements or a unit, even though the corporation was not a party to the contract.
Action by the Corporation
Section 23 does not apply to every lawsuit commenced by a corporation, only those in respect of damage to the common elements, assets or individual units, or to a contract involving the common elements.
Sections 25, 25 & 26
Section 24
Notices under the Expropriations Act
¨
Section 25
Notices under the Planning Act
¨
Section 26
Occupier’s liability
Occupier’s Liability: Section 26
The condominium corporation does not own the common elements, which can raise questions regarding liability for accidents, injuries or damages that occur thereon. This section allots liability to the condominium corporation (as opposed to the individual owners).
Board of Directors
A Condominium Corporation Acts Through its Board of Directors
Sections 27 – 41 of the Act deals with governance of condominium corporations. The matters dealt with in these sections include:
¨Board composition ¨Qualifications of directors ¨How the board conducts business ¨Removal of directors ¨Filling vacancies on the board ¨Standard of care ¨Conflicts of interest
Board of Directors
Except for the first Board, it is the owners who elect the Board in accordance with the requirements of the Act and the condominium corporation’s by-laws.
Basic qualification standards for a Director:
¨An individual ¨18 years old ¨Not an undischarged bankrupt ¨Capable of managing a property within the meaning of the Substitute Decisions Act, 1992 or the Mental Health Act ¨Has not been found to be incapable by a court ¨Must have complied with prescribed disclosure obligations
Director Disqualification
A person immediately ceases to be a director if:
¨Becomes bankrupt ¨Is found under the Substitute Decisions Act, 1992 or the Mental Health Act, to be incapable of managing property ¨Found to be incapable by a court ¨A certificate of lien has been registered against a unit owned by the person and he/she does not obtain a discharge of the lien within 90 days ¨Has not completed the prescribed training within the prescribed time ¨Has not complied with the prescribed disclosure requirements
Director Term
¨Directors are elected for a term of three years, or a lesser term as the by-laws provide. ¨A Director must serve until a successor is elected.
Director Consent
¨Director must consent to be elected. If not present at the meeting when he or she is elected, then he or she must consent in writing before the meeting or within ten days after the meeting.
Director Remuneration
Directors cannot be remunerated unless expressly passed in a by-law and then for only a maximum of three years
Conduct of Business
¨The Board cannot conduct any business of the corporation without a quorum of the Board. ¨A quorum is a majority of Directors.
Director Removal
A Director can only be removed before the expiry of his or her term by a vote of owners of more than 50% of all the units in the corporation, at a valid meeting duly called for that purpose.
A Director may also be removed if disqualified under the corporation’s by-laws or by Court order.
Officers
A corporation must have:
•A president •A secretary •All other officers that are provided for in the by-laws or by director resolution
Subject to by-laws, the directors shall elect the president from amongst themselves.r the corporation’s by-laws or by Court order.
Meeting of Directors
¨In addition to meetings required by the corporation’s by-laws, a quorum of the directors may at any time call a meeting to conduct any business related to the corporation. ¨Procedures for properly calling a directors’ meeting are outlined in Section 35.
Officers
A corporation must have:
•A president •A secretary •All other officers that are optional.
Director Conflict of Interest
The Act does not prohibit conflicts of interest, but rather sets out some basic principles and a procedure for the director if a conflict exists or arises later.e provided for in the by-laws or by director resolution
Subject to by-laws, the directors shall elect the president from amongst themselves.
Standard of Care
Directors and officers shall:
¨Act honestly and in good faith; and ¨Exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Director Indemnity/Insurance
¨The by-laws of the corporation may provide for the indemnity of directors and officers for liability and costs, expenses, etc., arising from the execution of his/her duties.
Exception: Where they are in breach of their duty to act honestly and in good faith. ¨It is mandatory for condominium corporations to purchase and maintain for directors and officers if “reasonably available”.
Director Conflict of Interest
The Act does not prohibit conflicts of interest, but rather sets out some basic principles and a procedure for the director if a conflict exists or arises later.
Conflict of Interest
- Directors who, directly or indirectly, have an interest in a contract or transaction to which the corporation is party must make written disclosure of the nature and extent of the interest, but only if the interest is material.
- Once disclosed the Director cannot: - Participate in that part of the meeting that deals with the issue. ¤Be counted in the quorum or vote on the issue.
Transfer of Control – The “Turn-Over” Process (Sections 42 - 44).
- Sets out the requirements and steps for the transfer of control of the newly registered condominium corporation from the developer (declarant) to the owners. ¨Such turn-over starts from the registration of the declaration and ends with the turn-over meeting and the fulfillment of the turn-over requirements
Termination – Insurance Trust Agreements
Insurance Trust agreements may be terminated upon 60 days written notice.
Condominium law PART 1 – law shorts
A contract is a promise between two or more parties to:
Perform some service;
Deliver goods;
Pay money.
Throughout this website there is no responsibility or liability for errors or omissions.
75 Townhouses, Registered April 17, 1973