The Ontario government plans to slap condo owners with the costs of protecting themselves from bad boards and unexpected financial problems within their buildings — starting at $1 a month per condo unit — under the biggest overhaul in condo legislation proposed in 16 years.
The new Protecting Condominium Owners Act is sure to result in not only higher maintenance fees but, in some buildings, costly special assessments as the government tries to get a grip on a booming sector that now houses about 10 per cent of Ontario residents — some 1.3 million people.
The massive overhaul — aimed at dealing with the “serious level of concern” around everything from transparency of condo finances to poorly trained property managers — will do nothing, however, to protect buyers against shoddy construction or developers who promise more than they deliver.
The proposed bill calls for creation of a new, non-profit Condominium Authority, funded largely by condo owners, to resolve disputes within the province’s close to 10,000 buildings that now can result in costly and lengthy litigation.
A proposed new Condo Manager Licensing Authority will regulate the booming property management system. That’s aimed at ensuring the folks hired to do the day-to-day running of multi-million dollar condo corporations across the province are adequately trained and vetted to reduce the risk of mismanagement or outright fraud which has emerged as a growing problem in a sector that now accounts for more than 50 per cent of all new housing construction.
“I see it as an insurance policy,” said veteran condo dweller Anne-Marie Ambert of the new monthly fees for owners. The York University professor was the lone representative for owners on the 12-member expert panel that advised the Liberal government on needed changes to the outdated act.
“It’s going to give us services and security that we don’t have now.”
In announcing the proposed changes Wednesday from the rooftop of a downtown condo building, Government and Consumer Services Minister David Orazietti stressed “it has become very clear what is likely to happen if we do not reform this act.
“A deterioration of condominium living — with increased potential for fraud and mismanagement. A continued rise in the number of very expensive, court-appointed administrators taking over control of condos from boards and managers as a result of failed reserve funds and other issues and more and more costly disputes between owners, and between owners and boards.”
The proposals — including the monthly fee — were among some 2,200 submissions the province received from owners, developers, managers and industry experts during the lengthy review, Orazietti said.
Other changes, which he hopes will be passed later this year and come into effect in 2016, include training for condo directors, mandatory licensing and education for property managers, restrictions against developers sticking buyers with unexpected long-term costs that drive up fees a year or so after taking possession.
The legislation would also make boards more accountable and transparent and stipulate what is an adequate reserve fund for each building for future repairs. Those are now woefully inadequate in some buildings, which could mean one-time special assessments in some condo projects.
Condo owner Sandy Steffen lauded the proposals as much-needed changes that might have protected her west-end townhouse complex, along with some two dozen other condo projects, from a rogue property manager who stole well over $350,000 from her small complex alone and left the board $170,000 in debt.
It took two years and cost each owner about $11,000 to fix the financial mess. While they were able to eventually recover 85 per cent of the outstanding funds, thousands were lost to legal fees.
“The small levy (under the proposed legislation) is a bargain compared to having to pay the full freight of legal costs,” said her condo board’s lawyer, Christopher Jaglowitz
