Out with the old, in with the new. What changes does Bill 106 bring?

The concrete jungle continues to grow, sprouting up building after building year after year. The Toronto skyline has drastically changed since 1998. Condominium buildings contribute to the vast majority of the change, as dozens sprout up every year.

In 2014 alone, 130 new condo buildings emerged in Toronto. The city’s infrastructure has transformed. As a result, Ontario’s Condominium Laws had to change as well. Because the size and complexity of Ontario’s condo market has altered since the act was last passed in 1998, changes were long overdue.

The revised Condominium Act took shape in the form of Bill 106. The amendments to the Condominium Act in 2015 instructs condo boards to be more transparent and provide financial disclosure to owners and prospective buyers. It also introduces mandatory education and training for all condo directors.

Most importantly, the revised act creates two new condo authorities: one that will license and regulate the province’s 2,500 property managers, along with the tribunal that will resolve disputes between condo boards and condo owners.

While Bill 106 has been accepted and is in the books as law, the various changes are not yet legally in force. Since the timeline shows that these changes will be implemented, let’s look at some of the key changes to the Condominium Act.

What changes has Bill 106 brought to the Condominium Act?

A Condominium Authority and Tribunal:

The highlight of the proposed act that’s stirred a buzz among corporations is the creation of two bodies: a condo authority and tribunal.

Although the exact duties of the Authority have not been specifically noted, it will supervise the following:

• • Act as a resource to provide information and resources to condo owners and corporations
  • Supervise mandatory training for all condo directors
  • Supervise the administration of a new Condominium Tribunal

The Tribunal’s key function will be to settle disputes and offer resolution processes, including mediations. The Tribunal also has the power to enforce decisions made by these processes, including ordering the party at fault to pay for legal costs or damages.

Corporation’s Reporting Obligations:

The Act also requires that all corporations submit reports and annual returns to the Condominium Registrar. These reports will include information about the corporation such as address, number of units and rentals. While the final content of reports has not been decided, these records will be made accessible to the public.

Budgetary Disclosure

The revised Act also requests that a section be added to corporations’ budgets and set up specific procurement processes when the corporation is trying to enter certain contracts or arrangements. A corporation’s budget must be adopted 30 days before the end of the fiscal year and must be circulated to owners within 15 days of the adoption of the new budget.

Reserve Funds

Proposed changes are being made regarding some amendments of corporations and their reserve funds. Some of the changes include examining the additional purposes the fund can be used for and establishing a “Reserve Fund Study Providers”. This means that outside counsel would be hired to conduct a study as to how corporations use their funds and further establish and define regulations, if the fund falls below the level set out in regulations.

Annual General Meetings (AGMs)

Bill 106 is making it a mandatory process for corporations to provide a 35-day advance notice before AGMs, which will be followed by the already existing 15-day advance notice.

This advance notice clause is being added because owners often feel like they do not have enough time to put down their name for board elections. This amendment will give owners ample time to put their names in before the AGM package goes out.

Special Owners Meetings

There are significant changes being made to the existing process of owner’s meetings and requisition requests. The Act proposes that the board will now have 50 days to call and hold a requisitioned meeting, whereas before it was a 35 days. This extension of time is resulting from Bill 106 introducing multiple interim steps between the communication of the requisition and the actual call of the meeting by the board.

This proposed process also introduces the option for requisitions to be withdrawn by the requisitionists, but the time period for that has not yet been set. These changes are being introduced to improve communication and streamline this process.

Repair and Maintenance Obligations

Another extremely important change being proposed by Bill 106 is that corporations will no longer be responsible to fix repairs of an individual unit, unless their Condo Declaration states otherwise. The owner will be responsible for repairing and paying for any costs associated with the maintenance of their individual unit.

This is tricky, however, because the change is not retroactive— this means that existing declarations under prior legislations may still continue to hold the corporation responsible, if that is what their declaration states.

As far as common elements are concerned, there has not been any significant change to address or further define what constitutes as “substantial change” to common elements. In regards to the level of consultation that Bill 106 requires of corporations before conducting work on common elements, here is the breakdown according to Gowlings:

• • Any “required repair or maintenance” using material which is reasonably close in quality (not look and feel) as the original as is appropriate in accordance with current construction standards would not require any form of consultation of the owners. (This has not changed from the 1998 Act)
  • Any work required to ensure the safety or security of persons or to prevent imminent damage to property or assets would not require any consultation either. (This has also not changed from the 198 Act)
  • Any work which is estimated to costs less than $30,000 or 3% of the annual budgeted common expenses would not require consultation, provided that owners, on an objective basis, would not regard the modification as causing a material reduction or elimination of their use or enjoyment of the element being work on.

Bill 106 or the Protecting Condominium Owners Act, 2015 was passed by the Ontario legislature on December 3rd, 2015. The bill has been implemented these changes to the older act. If your condo board requires assistance understanding these changes, it might be useful to consult with a condo property management company in Toronto.

ICC^® Property Management has been managing condominiums in the GTA since 1992. We value open communication and transparency among condo boards and understand the changes implemented by Bill 106. Our team of professionals can consult with your management to help implement these changes and ensure a smooth transition.