Reminder: ACMO CCI-EO 5th Annual Conference on Friday June 2, 2017: Jim Davidson and Nancy Houle presenting

Davidson Houle Allen LLP Condominium Law is proud to be a Gold Sponsor of the 5thAnnual ACMO CCI-EO Condominium Conference being held in Ottawa on June 2, 2017.

The schedule for the day includes exciting presentations, with timely and relevant issues geared towards condominium property management to be discussed. Jim Davidson is presenting on the Condominium Act updates, and Nancy Houle is speaking on the Legal Panel.

The conference has a comprehensive array of fantastic exhibitors ready to speak with attendees about condominium issues throughout the day. Davidson Houle Allen LLP has a booth; please come by and visit us !

Register today by visiting the CCI -EO website here !

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act and upcoming events .

First Phase of the Condominium Act Amendments -Update

The latest we’ve heard is that the “arrival date”  for the first phase of the Amendments (including the arrival of the new Licensing Requirements for Managers) will now occur later than anticipated, in the fall of 2017, not July 1, 2017.

We look forward to providing our readers with more exciting updates about changes to the Condominium Act, as information becomes available.

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act.

 

 

 

Insurance Deductibles By-laws – A Continuation

There’s been considerable dialogue across Ontario on the following:  When Section 105 of the Condominium Act is amended, condominium corporations will no longer be able to pass Insurance Deductibles By-laws.  But what about by-laws passed before then?  Will those existing by-laws still be effective?  Will they be “grandfathered”?

We’re pleased to advise that the province has offered some helpful additional comment on this issue.

The bottom line is as follows:  No decision has yet been taken about the possible “grandfathering” of insurance deductibles by-laws passed before the new Section 105 comes into force.

As mentioned in my previous blog on this topic, the draft new Regulations say that Periodic Information Certificates (PICs) to be issued by condominium corporations will include reference to insurance deductibles by-laws.  The province has confirmed that this doesn’t mean that insurance deductibles by-laws will necessarily be grandfathered.  It’s just that Section 105 won’t be amended as part of the first phase of condominium legislation amendments – and the new requirements respecting PICs will be part of the first phase.   The point is that existing insurance deductibles by-laws will certainly still be effective – at least until Section 105 is amended (some time in future) – and therefore will need to be mentioned in PICs (at least for the time being).  That’s what the new Regulations are saying – nothing more.

However, the province has also said this:

“No decisions have been made as to whether there will be transitional rules and, if so, how they would apply, in relation to the coming into force of the amended s. 105 of the Act. …This is something we intend to consult on as part of later phases of regulation development.”

I think this means that existing insurance deductibles by-laws might be grandfathered.

[This might be achieved, for instance, by saying that the new Section 105 won’t apply in certain circumstances – or in other words that the new Section 105 will only be proclaimed in force for certain situations.  For example, the current Section 105 might be allowed to continue in certain cases – for instance, where an insurance deductibles by-law has been passed prior to the date on which the new Section 105 comes into force.]

So again:  Existing insurance deductibles by-laws MIGHT be grandfathered.  We just don’t know.

What does this mean for condominium corporations?

Condominium corporations might wish to consider passing (or amending) insurance deductibles by-laws (pursuant to the current Section 105) for two reasons:

(a) Such by-laws will certainly be effective for the time being – until Section 105 is amended; AND

(b) Such by-laws also MIGHT be grandfathered (and therefore may continue to be effective even after the new Section 105 is proclaimed in force).

Here’s the added wrinkle:  In order to pass such a by-law, we of course need the support of the owners of a majority of the units.   It can be tricky to explain these insurance deductibles issues to owners (and to obtain their support).   I wonder if this will be even more difficult if we’re required to tell owners that the by-law might only be effective for a limited period of time (i.e. until Section 105 of the Condominium Act is amended).

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act.

 

Insurance Deductibles By-laws – Will Existing By-laws be Grandfathered?

There’s been considerable dialogue across Ontario on the following:  When Section 105 of the Condominium Act is amended, condominium corporations will no longer be able to pass Insurance Deductibles By-laws.  But what about by-laws passed before then?  Will those existing by-laws still be effective?  Will they be “grandfathered”?

My answer to this question is:  Maybe; but I don’t think so.

In my view, the amendments to Section 105 of the Act are clear:  Insurance deductibles by-laws will no longer be effective after the amendments to Section 105 come into force.  Put simply, the amended Section 105 says that the corporation’s deductible is a common expense except in certain specific circumstances listed in the Section – and a by-law is not one of the circumstances [As our readers will know, one new exception will be an amendment to the Declaration.]

The bottom line is as follows:  For insured events that occur after Section 105 is amended, I don’t see how a by-law can have any effect on responsibility for the corporation’s deductible.

HOWEVER:  According to the draft new Regulations, the information to be contained in Periodic Information Certificates (to be issued by condominium corporations) will include the following:

If an insurance policy obtained and maintained by the corporation in accordance with the Act contains a deductible clause that limits the amount payable by the insurer, a statement that,

(i) describes any such deductible clause, including the portion of a loss that would be excluded from coverage,

(ii) clearly identifies, for any such deductible clause, the maximum amount that is to be added to the common expenses payable for an owner’s unit under section 105 of the Act or as a result of a by-law passed under clause 56 (1) (i) of the Act before the repeal of that clause came into force, and

(iii) warns owners of their liability as described in subclause (ii).

This is unquestionably confusing.  Why refer to insurance deductibles by-laws in Periodic Information Certificates if such by-laws will no longer be effective?

I think there may be two answers:

(a) Insurance deductibles by-laws will of course continue to apply to any insured events that occurred before the amendments come into force. Adjusting those “pre-amendment losses” may take some time; and

(b) The amendments to Section 105 are not expected to be part of the planned First Phase of the amendments (whereas Periodic Information Certificates ARE expected to be part of the First Phase). Therefore, insurance deductibles by-laws may still be effective for some time to come – ie. until Section 105 is ultimately amended.

The Canadian Condominium Institute is checking with the province to see if the confusion can be resolved.

In the meantime, what should a condominium corporation do?

If you don’t currently have an Insurance Deductibles By-law, I suppose you could consider passing such a By-law.  The by-law certainly will be effective until Section 105 is amended.  And the by-law might continue to be effective after Section 105 is amended. But I have two cautionary notes:

I. Again, I think there’s a real possibility that such by-laws will have no further effect after Section 105 is amended.

II. Owners might be reluctant to consider passing a by-law that might soon be ineffective.

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act.

Marijuana in Condominiums- My take on the issue

Marijuana will soon be legal (for persons over a certain age).  Growing marijuana at home, for one’s own consumption and limited to a certain number of plants, will also be legal.  What does this mean for condominiums?

In terms of smoking marijuana on a condominium property, it seems to me that marijuana will be essentially the same as tobacco, subject to special rights surrounding “medical marijuana”.  To me, here’s what this means:

(I)   In general, condominium occupants will be permitted to smoke marijuana only where people are permitted to “smoke” on the property. Pursuant to the Smoke-Free Ontario Act, smoking is not permitted in interior areas of the common elements, nor is smoking permitted in workplaces (for instance, workplaces of condominium superintendents).  Smoking is also not permitted on outdoor patios of bars and restaurants (including bars and restaurants on condominium properties).

A condominium’s Declaration or Rules can also regulate or prohibit smoking in other areas of the property – including outside areas of the common elements (including exclusive-use common elements) and also inside the units.  [Note that grandfathering of “prior smokers” might apply in many cases.]

However, medical marijuana users will normally have the right to smoke where smoking is otherwise prohibited, depending upon their specific needs (for marijuana) and their specific medical prescription.

(II)   In any case, second-hand smoke (whether from tobacco or marijuana) must be controlled. In most cases, the condominium corporation will need to investigate any problem involving unwanted migration of second-hand smoke (often with the assistance of an expert), in order to track down the cause of the migration, and to determine who is responsible to stop it.  There are many possibilities (including sealing between units and/or the common elements; adjustments to air handling and/or exhaust systems; air purification or filtration; air pressure adjustments; etc.).  In some cases, the corporation may have some obligations (to solve the problem).  In some cases, the owner or smoker may have some obligations.  And in some cases, they may both have obligations.  And I stress:  These issues also apply to medical marijuana.

(III)  I also recommend a Rule or a provision in the Declaration to deal with these issues (not only smoking and medical marijuana issues, but also control of second-hand smoke).

In terms of growing marijuana on a condominium property, I again recommend a Rule or a provision in the Declaration.

Even though growing marijuana may be legal (from a criminal law perspective), this doesn’t necessarily mean that condominium occupants have the right to grow marijuana on the property.  Again, it’s my view that growing marijuana could still be regulated in the Declaration or in a Rule.  Here’s my take:

(I)   I think that growing marijuana on the common elements (including exclusive-use yard areas) could generally be prohibited (in the Declaration or Rules) except where the Board consents.

(II)  It might also be possible to prohibit growing of marijuana in the units (again in the Declaration or Rules) – particularly if this could cause harm to the building (for instance, as a result of excessive humidity or heat) or if this could mean excessive consumption of water or electricity. On the other hand, since the number of marijuana plants will be limited by federal law, it may be difficult to distinguish between growing marijuana and growing some other type of plant (in terms of potential harm or excessive consumption of utilities).

(III)  In order to minimize arguments about the reasonableness of a restriction, a provision in the Declaration may be preferable.

(IV)  In summary, in my view the best approach is to deal with these issues fully and carefully, either in the Declaration (an original provision in the Declaration or an amendment to the Declaration) or in the Rules.

(V) Depending upon the specific circumstances, a medical marijuana user might still have the right to grow marijuana (pursuant to the Human Rights Code), notwithstanding any contrary Rule or provision in the Declaration.  But I think that the grower could still be held responsible for any resulting harm or expense to the condominium corporation and/or other owners.

Stay tuned to Condo Law News for more blogs about updates related to condominiums and marijuana.

Amendments to the Condominium Act: Repair & Insurance Obligations in relation to Units

The coming legislative amendments will bring some changes relating to repair and maintenance obligations of condominium corporations and owners.   What are those changes; and what impact will they have on condominium insurance?

The Condominium Act (the “Act”) currently indicates that, subject to the contents of a condominium’s declaration, the condominium corporation is responsible for repairing units after damage.  The amended Act will say that owners must repair their units – unless the declaration says otherwise.  In our view, this will have very little impact on most condominiums, for the following reason:  Almost all declarations spell out the repair and maintenance obligations.  In other words, the Act seldom determines the repair and maintenance obligations.  As a result, the repair obligations contained in the vast majority of condominium declarations will simply continue to apply, regardless of the changed wording of the Act.

This said, in our view, it will nonetheless make sense for all corporations to review their Declarations – and to consider whether or not the Declaration should be amended – for the following reasons:

(a) The definitions of “repair” and “maintenance” will change – and this might mean some changes of responsibility in the particular condominium.  [It would be a good idea for the corporation to understand any such changes of responsibility – and also to consider any resulting desire to amend the Declaration (see below).]

(b) If the Declaration does not spell out the repair and maintenance obligations, the amendments to the Act will indeed change the responsibilities in that condominium.

(c) Some corporations might simply wish to consider an amendment to the Declaration, to change the repair and maintenance obligations set out in the Declaration, whether or not as a result of the coming changes to the Act.

What about condominium insurance?

Notwithstanding the pending amendments to the Act, condominium corporations will still be obligated – under Section 99 of the Act – to obtain and maintain insurance covering the common elements and the standard units.   So even though owners may have the obligation to repair their units (as is most often the case now), owners have the benefit of insurance – arranged on their behalves by the corporation – covering their standard units.

The only changes to the insurance regime will be as follows:

(a) There will be a prescribed standard unit description that will apply in cases where condominium corporations don’t have a standard unit by-law.

(b) As described in our recent blog post, there will be changes to responsibility for the deductibles on condominium corporation insurance policies.

Otherwise, the insurance regime is not changing.

Stay tuned to Condo Law News for more blogs about amendments to the Condominium Act.