Competition Bureau looks into Condo Renovations

August 2016

Canada’s Competition Bureau is taking a close look at condo renovations. They are exploring allegations of bid-rigging and conspiracy.

More than 140 Toronto area condo corporations have been ordered to hand over renovation records relating to “budget, tendering, bidding, negotiating and awarding of a contract for the renovations to the common areas of the condominium corporation’s building(s)”. This may include requests for proposals, bid submissions, signed contracts, board minutes and related correspondence. The order went out on May 10 and condo corporations have 90 days to comply. Condo corporations that fail to comply with this order risk prosecution.

The investigation is looking at condo corporations that have undergone common area renovations of shared spaces including party rooms, lobbies and parking garages between 2006 and 2014. Many of the contracts are in the millions of dollars.

Selected condo corporations are from a group of 400 whose names were found on computers seized from contractors and designers involved with condo renovations. Condo corporations with incomplete records may have to absorb the cost of rebuilding their records.

Current information is that condo corporations are not targets of this investigation. As of May 31, there is no determination of wrongdoing.

This investigation should prompt condo corporations to take a closer look at their record keeping, financial controls and tendering process. Those with effective record keeping and financial control systems are better protected against the risk of bid-rigging, conspiracy, price fixing or collusion. Many of the condo corporations injured by such practices are likely unaware of their complicity by adopting ill-advised business practices.

Bid-rigging and conspiracy are serious offenses. Those convicted can receive fines of $25-million or more plus prison sentences of up to 14 years.