Reminder: ACMO CCI-EO 4th Annual Conference on May 27, 2016

Nelligan O’Brien Payne is proud to be the Diamond Sponsor of the 4th Annual ACMO CCI-EO condominium conference being held in Ottawa on May 27, 2016.

There is an exciting schedule of presentations by leading experts in the condominium field, providing updates and discussing timely issues relevant for managers, board members and condominium owners!

As always, the conference has a comprehensive array of fantastic exhibitors ready to speak with attendees about condominium issues throughout the day.

Register today by visiting the CCI website here!

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Tarion is Under Review

As many of our readers may know, Ontario recently initiated a review of Tarion Warranty Corporation. Tarion is the non-profit corporation created under the Ontario New Home Warranties Plan Act to oversee warranties and other matters related to new home construction and sales in Ontario.

Detail about the province’s review of Tarion can be found at the Ministry of Government and Consumer Services website here. Below is an extract from their site:

We have initiated an independent review of the Ontario New Home Warranties Plan Act and the Tarion Warranty Corporation.

The Honourable J. Douglas Cunningham, QC has been appointed as a special advisor to review protections for owners of new homes and identify opportunities to improve consumer protection.

His final report will provide recommendations on how to improve consumer protection, accountability, transparency and board governance to help protect consumers buying new homes in Ontario.”

I offered written comments to Justice Cunningham, and was honoured when he invited me to participate as a member of a “focus group” to provide feedback about Tarion that might assist in the review process.

Members of the focus group were asked a number of questions about Tarion, including:

  • What is your understanding of Tarion’s role and purpose? Do you have any suggestions on what role Tarion should have?
  • What do you see as the strengths of the Ontario New Home Warranty Plan Act (ONHWPA)? What do you see as weaknesses or deficiencies?
  • What warranty coverage and consumer protections do you believe should be provided to new home owners? What are the current gaps in coverage, and how can these gaps be improved?
  • What are some common concerns for new home owners? What do you think gives rise to these concerns? Who should be responsible for responding to these concerns?
  • What concerns are best addressed by organizations other than Tarion?
  • What does Tarion currently do well? What improvements would you recommend (including consumer protection, accountability, board governance and/or warranty coverage itself)?

I was very pleased to provide written responses, and I look forward to eventually seeing Justice Cunningham’s report once he has completed his review.

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An Owner Makes Changes to the Common Elements

A recent court decision, York Condominium Corporation No. 78 v Stein, nicely summarizes the principles that apply when an owner makes changes to the common elements.

In this case, the owner had made substantial renovations to her apartment, which also included some changes to the common elements. For instance, the owner had made changes to electrical and plumbing features, as well as to heating equipment in the apartment, and these were changes to the common elements (in the case of York Condominium Corporation No. 78).

The court noted that the owner had made the changes without complying with Section 98 of the Condominium Act, 1998, which includes the requirements for consent of the Board and for a registered agreement between the condominium corporation and the owner. The court also noted that the changes were a possible threat to safety.

The court granted the condominium corporation full access to the unit (upon 48 hours’ notice to the owner) for the purpose of:

  1. carrying out a full inspection to determine any further unauthorized additions and/or alterations to the common elements;
  2. restoring any such unauthorized additions and/or alterations to the common elements to their original condition;
  3. carrying out a full inspection to determine whether the current state of the Unit poses any risk(s) as provided for in section 92 of the Act.

In my view, some of the key points to take away from this case are as follows:

  1. When an owner renovates a unit, the renovations may include changes to the common elements.
  2. An owner’s changes to the common elements must comply with Section 98 of the Condominium Act. Briefly, the requirements of Section 98 are:
    • Consent of the board;
    • An agreement between the corporation and the owner, registered on title to the owner’s unit;
    • In some cases, involvement of all owners in the approval.
  3. One of the obligations of the condominium corporation is to take reasonable steps to ensure compliance with Section 98.
  4. In each case, the corporation should also consider whether or not the changes could represent any risk to safety.

Read more about changes to common elements in our previous blog post.

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Reminder: Kingston Condo Law Primer – 2016

The deadline to register for the Kingston Primer is fast approaching and space is limited. Register now to avoid disappointment!

Hosted by Nelligan O’Brien Payne’s Condominium Law group, this not-to-be-missed event will address issues of interest to the condominium community.

Some of the topics of discussion at this seminar will include:

Here are the event details:

  • Date: April 9, 2016
  • Location: Residence Inn Marriott, 7 Earl St, Kingston (Click here for a map)
  • Time: 9:00 am – 12 pm
  • Cost: $40 (Includes HST)

To register, please click here to fill out the form and email to wanda.blakney@nelligan.ca or send by fax to 613-531-0857. If you have any questions, Wanda can be reached at 613-531-7905.

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Collecting Costs from Owners

When an owner (or the owner’s tenant) causes the condominium corporation to incur costs, two questions arise:

  1. Does the condominium corporation have the right to collect those costs from the owner?
  2. Can the costs be added to the owner’s common expenses?

The Condominium Act contains some specific provisions about recovery of costs from owners. For instance:

  • If a condominium corporation is required to take enforcement proceedings against an owner and/or the owner’s tenant, the condominium corporation may be entitled to recover all reasonable costs incurred by the condominium corporation in the Court process. And the corporation will normally have the right to add those costs to the owner’s common expenses. [See Section 134 (5) of the Condominium Act.]
  • Under Section 92 of the Act, if a condominium corporation carries out maintenance or repairs on behalf of an owner, the related costs can be added to the owner’s common expenses.
  • Under Section 105 of the Act, owners may be responsible for the corporation’s insurance deductible in certain circumstances. If so, the amount is added to the owner’s common expenses.

But what about other costs caused by an owner or the owner’s tenant that are not related to a court process? This could include legal costs (for warning or demand letters), extra management costs (for special enforcement efforts), engineering costs (for special investigations) or any other costs incurred by a corporation as a result of an act or omission of an owner or the owner’s tenant.

The corporation’s right to recover those types of costs – and to add those costs to the owner’s common expenses – can often depend upon an “indemnification” provision in the corporation’s declaration, by-laws or rules.

Note as well that, in order to add such costs to an owner’s common expenses, the amendments to the Condominium Act require that the indemnification provision (specifically stating that such costs are added to the owner’s common expenses) be in the declaration.

So, all of this leads to the following questions:

a)      Does your declaration contain an indemnification provision?

b)      Is that indemnification provision well-worded?

c)      If the answer to (a) or (b) is “no”, should you perhaps be considering an amendment to your declaration (with consents from owners of 80% of the units) to add an indemnification provision to your declaration? Or maybe improve the wording of a current provision?

NOTE: Without such a provision in your declaration, when the amendments to the Condominium Act come into force, you may have to look for other ways to collect amounts owed by owners…such as a claim against the owner and/or tenant in Small Claims Court. Depending upon the specific facts, this may be a far less efficient alternative.

To read more on condominium arrears, take a look at our previous blog post.

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