When the Government of Ontario conducted its review of the Condominium Act, 1998 (the “Act”), one of the concerns raised was that there was not enough reliable, timely and relevant information being communicated to condominium owners by the board of directors and management about the status of the condominium’s operations and the decisions that were being made.
In order to address these concerns and improve transparency and accountability, the Government of Ontario is proposing a new regulation under the Protecting Condominium Owners Act (which has received royal assent but has not yet been proclaimed in force), that will require condominium corporations to make mandatory communications to owners.
Under the proposal, condominium corporations would be required to send out three different types of information certificates to owners using a mandatory, standardized form found on the Government’s website. However, corporations with less than 25 units that have held a turnover meeting can exempt themselves from the information certificate requirements for any fiscal year if the owners of at least 80% of the units consent in writing.
Corporations will be allowed to distribute information certificates through a website, as long as a prescribed notice of online posting is sent to owners pursuant to the allowed communication methods set out in s. 47 of the Act.
A periodic information certificate is to be sent out to owners within 30 days of the end of the first fiscal quarter and within 30 days of the end of the third fiscal quarter containing the following information:
- Address for service of the corporation, the directors, officers and the condominium manager;
- A statement of all outstanding judgments against the corporation and the status of all legal actions to which the corporation is a party, as well as their financial implications;
- Certificates of insurance and a statement describing deductibles and the maximum amount that could be added to common expenses payable for an owner’s unit, as well as a statement identifying any required insurance policy that the corporation fails to obtain or maintain;
- Any physical address or electronic method of communication that the board has decided can be used to receive record requests;
- A statement identifying any director who:
- is a party to any legal action to which the corporation is also a party;
- was a party to any legal action that resulted in a judgment against the corporation and the judgment is outstanding; or
- has common expenses that are in arrears for 60 days or more.
- The total number of leased units for which the corporation has received notice during the current fiscal year;
- If the corporation has passed a by-law that establishes a standard unit and the by-law number that identifies this;
- A copy of any disclosures made by directors;
- Budget and all budget amendments for the current fiscal year and a statement whether the budget may result in a surplus or deficit and the amounts projected;
- Information about the reserve fund, including the balance, annual contribution and anticipated expenditures from the reserve fund for the remainder of the year and whether the board plans to increase reserve fund contributions;
- Status of any outstanding claim under the Ontario New Home Warranties Plan Act by an owner;
- A statement of whether the corporation failed to comply with its obligations to pay the annual fee to the Condominium Authority or file a return;
- Copy of any compliance order issued by the Registrar that has been made against corporation; and
- If the corporation’s by-laws require, any additional information to be included.
An information certificate update is to be sent out to owners when certain events trigger the need for an update (usually within 15 days of the event unless otherwise specified below), for instance:
- Change of address for service of the corporation, directors, officers or management;
- Any change in the address or methods for receiving records requests;
- Any change in the deductible clause or maximum amount that could be added to the common expenses payable for an owner’s unit;
- Termination of an insurance policy that the corporation is obligated to maintain;
- When a vacancy arises in the condominium board and there are not enough directors remaining in office to constitute a quorum, then a statement of that fact and the number of vacancies on the board, as well as a request that each individual who intends to be a candidate for election to the board notify the board in writing. This certificate would need to be sent within 5 days of losing quorum, and the candidate’s information must be delivered to the board within 5 days after this certificate is sent by the board;
- Any other information set out in a by-law.
A new owner information certificate must be sent out to all new owners of a condominium unit, containing information from the most recent periodic information certificate and information certificate update.
The government has released a draft of the proposed regulation plus a plain language summary to facilitate dialogue on the proposed contents. Comments on the proposed regulation can be submitted by no later than March 30, 2017. Click here to submit comments to the Government. The above provisions on mandatory communications to owners are planned to come into force on July 1, 2017.