May 2017
A Tale of Two Outcomes
Condo owners are in need of education about condo living according to the Ontario government. They are less educated about their chosen form of housing than they should be – possibly less educated than renters or those who purchase single family homes. The situation is sufficiently serious that condo owners 
will soon be required to pay a monthly tax – starting at $1 per month per suite with the potential of increasing to some unknown amount over time – so that the government can provide this better education.
The current legal system is inadequate for resolving condo disputes so a new authority will be established for this purpose. This will be a unique system that does not exist for non-condo owners. As with education, condo owners will be funding the new system.
Toronto Condo News has considered this new legislation updating the Condo Act from the view of condo owners. Our view differs from that of government or industry groups which appear fully supportive of this legislation.
Our view differs from that of government or industry groups which appear fully supportive of this legislation.
While we support changes to the Condo Act, there are concerns about creating new bureaucracies that will increase the cost of living for all condo owners and offer dubious benefits.
While we support changes to the Condo Act, there are concerns about creating new bureaucracies that will increase the cost of living for all condo owners and offer dubious benefits.
The new Condo Act is expected to in force later this year. This new regulation will improve many aspects of condo living currently perceived as problematic.
Current rules and regulations will be updated to reflect newer wisdom and experience about how condo corporations should function. This will be a new minimum standard to which a lower tier of condo corporations will be expected to meet. Better managed condo corporations are likely to already exceed this minimum standard and be less affected by most changes.
Since legislation was passed directors of the Condominium Authority of Ontario have been appointed. The Minister of Government and Consumer Services has spoken to at least one industry organization. The hoped-for benefits of this new body have been reiterated by many.
Yet, there are aspects of this legislation that appear to be less than ideal and which, in our opinion, require clarification or refinement.
Yet, there are aspects of this legislation that appear to be less than ideal and which, in our opinion, require clarification or refinement.
The most significant change in the Condo Act is the new Condominium Authority of Ontario. It will affect all condo owners and be funded by a tax added to monthly condo fees. The Condominium Management Services Act will create a second bureaucracy likely to add further to costs of condo management.
According to supporters, the Condominium Authority of Ontario will provide dispute resolution that is simplified, faster and cheaper. Condo directors will make better decisions. Condo directors, owners and buyers will be better educated. Condominium managers and companies will be licensed under the Condominium Services Act which will help prevent abuses.
This scenario, presented by supporters of the new legislation, is not as definitive as suggested.
Will dispute resolution be simplified, faster and cheaper? The majority of condo owners are happy with their lifestyle choice. Disputes are infrequent. It may not be the best idea to have all condo owners fund dispute resolution for a small minority. A new process that transfers the cost of dispute resolution, fully or partially, to all condo owners may result in more frivolous claims and higher costs for all.
Should condo corporations be required to deal with more disputes through the dispute resolution tribunal, a likely scenario, the greatest beneficiaries may be legal counsel who bill for services on an hourly basis.
Will directors be better educated? Requiring volunteer directors to undergo education may have the opposite effect of what is intended. It could very well result in fewer and less capable directors. The best directors are already educated on condo matters and experienced. Many are employed. Requiring these experienced and busy people to be “educated” for a volunteer role is unlikely to have the desired intent. More likely is fewer good condo directors willing to undergo mandated education for a volunteer role, degradation in the overall quality of condominium corporation directors and less effective management.
Will condo owners be better educated because the Condominium Authority of Ontario creates guides for condo buyers and “education” for condo owners? Such information is currently available through numerous sources including Toronto Condo News. Those who are “uninformed” choose not to avail themselves of available resources. The value of having condo owners fund the creation of new educational materials is uncertain. It is unclear why condo owners are in need of self-funded education about condo living through the Condominium Authority of Ontario when no comparable institution exists for those who own single family homes.
What will be the cost implications for condo owners? The Condo Tax appears to be starting at $1 per suite per month. It is unclear how this tax may change over time. Condominium managers and condominium management companies may have increased registration and certification costs that will be passed along to condo corporations in the form of higher fees. Should frivolous dispute resolution claims increase, condo corporations lack expertise and staffing to represent themselves. Legal fees may become a more significant burden for condo owners to bear.
Overall, an updated Condo Act is long overdue. Creating new bureaucracies, funded by condo owners and increasing the costs of condo living, is an approach considered and rejected in 1978. Having this forced on condo owners in 2017 requires a justification that has, thus far, not been provided.
Armand Conant, a director of the Condominium Authority of Ontario, did not respond to a Toronto Condo News request to be interviewed for this article. Tracy MacCharles, Minister of Government and Consumer Services, did not respond to a Toronto Condo News request to be interviewed for this article.
