Who Can Rely On A Status Certificate?

Recently I received an interesting question respecting status certificates from a very astute condominium manager.

As many of our readers know, under the former (1978 version) of the Condominium Act, Section 32(8) of that Act said that a status certificate was binding upon the condominium corporation “as against the person requesting the certificate.”

However, the current Act – Section 76(6) – does not contain the same words. Instead, section 76(6) of the current Act says that the certificate binds the corporation “as against a purchaser or mortgagee of a unit who relies on the certificate”…and this could, in theory, be someone other than the person who requested the certificate!

So the question raised by the condominium manager is as follows: Continue reading “Who Can Rely On A Status Certificate?”

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Condominium Act Amendments and Common Expense Increases

At the ACMO / CCI EO Condominium Conference on June 2nd, I offered my view that the Protecting Condominium Owners Act, 2015 (including amendments to the Condominium Act and the introduction of mandatory licensing for condominium property managers) will likely mean an increase in common expenses for most condominium corporations in Ontario.

In my view, common expenses can be expected to increase for at least three reasons:

1. There will be added burden on condominium property managers – for various new procedures and requirements under the Condominium Act. Condominium management fees should therefore increase.

2. Condominium managers will also be faced with annual licensing fees and other expenses under the new licensing requirements – which of course will need to be passed on to condominium corporations.

3. Condominium corporations will be required to make payments to the new Condominium Authority of Ontario – which payments are currently estimated to be somewhere between $1 and $3 per unit per month.

It’s difficult to know what sort of common expense increase this will mean for a given condominium corporation, but there seemed to be general agreement at the conference that the amount will be somewhere between $5 and $10 per unit per month.

This raises the following question:  Should condominium corporations mention this (now) in the status certificates? 

In my view, this might not be necessary (because such increases will result from circumstances that are public knowledge); but I still feel that the safe thing is to add wording to the status certificates (paragraph 12) along the following lines:

The corporation has no knowledge of circumstances that may result in an increase in the common expenses for the unit except:

The Protecting Condominium Owners Act, 2015, will bring some important changes to condominium law and administration in Ontario, including changes to the Condominium Act, as well as mandatory licensing for condominium property managers.  As a result, condominium management fees are expected to increase.  Also, condominium corporations will be required to make payments towards the new Condominium Authority of Ontario.   These matters are expected to result in an increase in the common expenses, and the increase is currently estimated at between $5.00 and $10.00 per unit per month. 

These changes are expected to come into force in phases, from 2017 – 2019.

Condominium corporations might also want to let their owners know about these coming increases.

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

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A Reminder About Reserve Funds and Status Certificates

If a condominium corporation is aware of any circumstances that may result in an increase in the common expenses (that is, an increase beyond inflation), this must be disclosed in Paragraph 12 of the status certificates. Therefore, something may need to be mentioned in Paragraph 12 of the status certificates if it appears that contributions to the reserve fund may need to increase (beyond inflation).

For example, some features of the common elements may not be covered by the reserve fund study; such as, if those features won’t require replacement until after the reserve fund study period. If so, I recommend that the condominium corporation give careful consideration to the following: Is it possible that the annual contributions to the reserve fund will need to increase when those features “come into the study period” at some time in the future? If so, this may need to be mentioned now in Paragraph 12 of the status certificates.

As mentioned in my blog post last November, the reserve fund study period (currently required to be “at least 30 years”) is also expected to be increased, likely to “at least 45 years”, as part of the anticipated amendments to the Condominium Act and Regulations. Depending upon the particular condominium, this may mean that features not currently covered by the reserve fund study will be covered (if and when the study period increases to at least 45 years). Again, if this could result in an increase in the annual reserve fund contributions, this may need to be mentioned now in Paragraph 12 of the status certificates.

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