Attention Ontario condo owners and buyers: there are new changes coming to the province’s Condominum Act that will affect you. The Ministry of Government and Consumer Services has proposed a bill to further target fraud and fund mismanagement within condo boards. The changes will improve protection for condo owners and provide them with more say on financial control within their communities.
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Bigger Market, Bigger Fees
The proposed laws reflect the changing needs of the province’s condo market, which has boomed over the past decade. Currently, there are 700,000 condo units in Ontario, an increase of 270,000 since 2001. Another 51,000 units are under construction. Pointing to how much the condo market has transformed in “size and complexity,” the Ministry says the proposed new laws will provide better management and more financial stability. The proposal, which will mark the first time the Act has been changed since 1999, appears mainly positive for condo owners – but they may find themselves paying higher monthly fees as a result.
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Faster Dispute Resolution
A main element promises owners a better, more streamlined and efficient way to handle everyday disputes and concerns (think elevator maintenance, or complaints of noisy neighbours at night). Part of this quicker, lower-cost resolution system will be a new proposed Condominium Authority, which will work to help condo owners understand their rights and responsibilities, and will be overseen the Auditor General. The goal is to minimize the number of disputes going to court, and owners will be charged $1-per-month fee to partly pay for this service.
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Effective Emergency Funds
The new rules will also define what the adequate reserve funds are for each condominium. This could mean some condominiums boards face the issue of beefing up their existing funds, which could result in higher maintenance fees for those owners. The act also wants to set up safeguards for new buyers; developers will need to provide “easy-to-read” guides to buyers when a unit is sol, that clearly outline any costs that may arise from the purchase.
The act is also proposing to set up another authority to manage the managers. Called The Condominium Management Services Act, it will regulate condo managers and management firms by establishing a compulsory licensing system. Property managers will have set training and minimum educations requirements. This move could also mean higher monthly fees, as more money will be needed fund this new act and find, hire and pay more qualified individuals to manage the corporation.
Are The Changes Necessary?
While the new rules will mean higher fees for many condo owners, it can be argued that the costs that arise from board or fraud conflicts are far higher. Sandy Steffen, a condo owner and advocate, states she has fallen victim to money mismanagement, and applauds the new changes. “In late 2009, my small 15-unit condo building had $250,000 fraudulently stolen by the property manager,” she says. “These changes will help disable rogue property managers, prevent fraud and mismanagement.” Steffen’s building dispute took two years to resolve and ended up costing her $11,000 in legal fees.
As 1.3 million, or 10 per cent, of Ontarians, now live in condos, the changes are sure to be far-reaching. Experts who served on the panel that oversaw the proposed reforms says this is a ‘great insurance policy’ for all owners, now and in the future.” Stay tuned for updates once the bill has been voted on.