Governance

July 12, 2024 Published by Golden Horseshoe Chapter - By Dave Williams

A Chat with Robin Dafoe, CEO & Registrar at the Condominium Authority of Ontario

From the Volume 20, Summer 2024 issue of the CCI GHC Condo News Magazine

It is interesting to speculate about the future of the Condo Industry. To try to better understand where the industry is going, we provided a set of questions to Robin Dafoe, CEO & Registrar of the Condominium Authority of Ontario. Our objective is to look at what the Condo Industry might look like 5 years from now.

Robin, thanks for your time.

D.W. If you were to write a brief 5 year “Vision Statement” for the Condo industry, what would that look like?

R.D. Thank you. This is a very important question. Condo living is becoming more and more popular. 1.7 million Ontarians live in condos and half of homes built in the province each year are condos. The CAO’s vision is to make sure that these growing communities are strong and vibrant. Our mission is to engage and empower them by providing information, education and dispute resolution services that strengthen consumer protection. Recently, I joined the CAO’s Board and Senior Leadership Team in a strategic planning exercise that renewed our commitment to our vision and mission. This exercise involved an environmental scan and a SWOT analysis of internal and external strengths and weaknesses to identify best practices, relevant trends and insights in the condo sector. The outcome was a plan for the next three years that allows us to continue delivering on our mandate and meeting the needs of a sector facing changing demands and heightened expectations. Part of this means continuing to enhance digital services, driving innovation and strengthening partnerships across the sector.

D.W. The industry has many issues currently; including shortage of property managers, possibly skill sets of property managers, need for better industry communications generally, need for condo board directors with better all-round experience, under-funded Reserve Funds and in some cases fees.

Industry players like ACMO, CCI, CMRAO and CAO will play an important role in making improvements. How do you see marshalling these various groups to organize the needed changes?

R.D. Stakeholder engagement and collaboration is essential to the CAO’s mandate.

One of our priorities for the next few years is to continue collaborating with other condo sector organizations to promote and enhance our services. We routinely host focus groups, consultation tables and user testing sessions that anyone in the industry can join.

We have a “Memorandum of Understanding” with CMRAO and work together routinely on data sharing and other joint initiatives to support consumer protection.

We have a big digital focus and have been using social media to engage with these organizations – including CCI’s local chapters - to cross promote resources. I also am looking forward to participating in and speaking at CCI Eastern Ontario’s upcoming conference and am of course pleased to be speaking with CCI Golden Horseshoe now!

Last but not least, CAO will be attending ACMO CCI Toronto’s Condo Conference in November and the CAI Canada Conference in September.

We look forward to connecting with all condo community members there.

D.W. Do you think the average condo corporation understands the need to fund the reserve appropriately to meet the challenges inherent in building (asset) deterioration over time?

R.D. I think at a high level, yes. Everyone understands that home ownership requires repairs and maintenance.

The CAO recently wanted to dig deeper and so we conducted a sector survey on reserve funds. The survey confirmed that most corporations are taking reserve funds seriously and following the advice of experts.

Results also showed that condo owners could gain greater awareness of reserve fund concepts and the importance of maintaining an adequate fund, and that all condo community members should work together to keep up with inflationary pressures on reserve funds.

Ultimately, good reserve fund planning requires that condo owners, directors, managers and reserve fund study providers collaborate to identify strategies and develop a plan that best works for their community. This involves regular reviews of reserve fund studies, prudent financial management and transparent communication with owners about the fund’s status and needs.

D.W. A blend of assessments and supportive funding of the reserve could be a solution. I think residents should be a part of deciding about this process and not something done by a board in isolation.

R.D. The CAO recommends effective and proactive communications with owners. Transparency is one of the principal ways that boards can create harmonious communities and ensure that owners are kept informed throughout the reserve fund planning process.

There are legally mandated updates about financials that must happen throughout the corporation’s fiscal year and as part of Annual Meetings. Owners should ensure they read those, and boards must make sure to send them in a timely manner.

In addition to these, the CAO has developed a Reserve Fund Guide, an Owner’s Meeting Guide and Governance Guide that highlight best practices for making sure that owners are engaged and that communications are frequent and inclusive.

D.W. What is the CAO position with respect to ensuring that Condo Corporations plan appropriately? Should five-year plans be mandatory?

R.D. Prudent planning for corporations is crucial.

In our Annual Requirements Guide, we provide an outline of how to draft a yearly plan so that boards can ensure they are meeting their governance and operational requirements.

Our Advanced Director Training also provides best practices on how to plan prudently for long-term risk management and reserve fund sustainability.

We have not heard any specific feedback from the sector about mandating five-year plans.

D.W. People arriving at retirement often purchase a condo in efforts to downsize, economize and eliminate maintenance tasks. They see the condo as being their final residence. Appropriate “reserve funding” can often over time, put their monthly costs “out of reach.” This phenomenon is probably more evident after the recent round of inflation. Do you see a fix for this?

R.D. Condo living provides many advantages over traditional freehold home ownership, such as not having to worry about yard maintenance, generally lower costs and more.

Here’s a few important points to remember about financials when deciding if condo living is for you:

Understand the community you are buying into – as the common expenses pay for the services and amenities that the corporation has, it is important to understand if you are going to use them.

Proper reserve fund planning saves money in the long run – Buyers should review the condo financials to see if this is happening.

Be prepared to do your part - Lastly and most importantly, once you have purchased, you must understand that you must do your part to ensure proper maintenance and safety.

Condo buyers and owners should read CAO’s Condo Buyers Guide and Reserve Fund Guide for more on this topic.

D.W. In my experience, condo boards can be notoriously lacking in “the art” of communication. How could you mandate better communication?

R.D. As the saying goes, “you can never communicate too much.” It helps to ensure that everyone is informed and aware of what’s happening in their community. The Condo Act has specific requirements about owner’s meetings, AGMs and Periodic Information Certificates that boards must undertake to communicate with owners. Beyond that, boards should understand the needs of their community and be proactive in providing updates and information in a way that works for their owners.

CAO strives to provide communication best practices. Boards can refer to our “Buyers’ Guide” , “Guide on Condo Reserve Funds, “Owners’ Guide” and “Owners’ Meeting Guide” on this topic.

Additionally, we recently released a “Guide on Communication and Conflict Resolution” that provides additional advice for boards on this topic.

D.W. The Condo governance model in Ontario can sometimes be a bit autocratic. This can be measured in terms of poor or no communication, lack of prescribed turnover of board members, lack of the use of nominating committees etc. How do you envision correcting some of these practices?

R.D. It would be difficult to find a one size fits all solution. The province has many small condos with few units, whose needs and challenges in terms of communication, governance and reserve fund readiness are very different from large downtown high rises.

The best solution in our view is education, both at the director level and the owner level.

Director training is a crucial piece of this, which is why, after consulting with the sector, we are expanding our mandatory director training program this fall to include more in-depth information.

We are very excited about this and encourage owners to take the training as well.

It’s important that all members of a condo community understand their rights, duties and responsibilities.

The CAO’s Governance Guide is also an important resource here. It contains great tips about ensuring transparent communication with owners, ensuring proper board composition, managing risk and more.

D.W. Many states in the US have robust laws covering all aspects of condo governance. All board meetings must be posted for everyone to see, people are free to attend and ask questions or make comments, minutes of meetings must be very detailed and director terms are mandated. The same applies to nominating committees. Why is condo law here so vague on these practices.

R.D. Condo legislation in Ontario is similar. It is based on a self-governance model with director term limits where the corporations have the flexibility to fine-tune governance processes that best meet the needs of the community while ensuring consumer protection.

The Condo Act specifies the opportunities for owners to provide input to the board and to receive updates on board decisions, such as at the AGM and through requisitioning an owner’s meeting.

The CAO also offers a quick and affordable online Tribunal, the Condo Authority Tribunal, where condo owners can take disputes about not getting the records they are entitled to, among other issues. Ontario is one among a few jurisdictions to offer this dispute resolution option to condo owners.

D.W. Nominating committees can be very useful. Do you see this and other meaningful changes coming to the governance model in the next five years?

R.D. There is a lot of value that committees can provide for the overall governance of a condo corporation, including getting the owners more involved.

CAO provides detailed information in our Governance Guide about the best practices for setting up committees, including nominating committees, such as developing Terms of Reference which establish in writing the structure, responsibilities and roles of the committee.

We often hear of corporations struggling to get volunteers to serve on the board and to generally get owners interested in the governance process. I think providing corporations with the flexibility to decide whether a nominating committee is right for their community reflects the nuanced nature and diversity of the condo sector in Ontario.

Robin, many thanks for your time and excellent and honest answers to our questions. I think it now behooves CCI Golden Horseshoe Condominium Management Companies and their managers to ensure this information is distributed to their member corporations.

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Robin Dafoe is Robin is the Chief Executive Officer and Registrar of the Condominium Authority of Ontario and has been instrumental in starting up and growing both it and the CMRAO since their inceptions in 2016-17.

Previously, she held senior management roles in the Ontario Public Service, including at the Ministry of the Attorney General, Ontario College of Trades, the Education Quality and Accountability Office, Legal Aid Ontario, and the Ontario Heritage Trust. Robin holds a Master of Laws from Osgoode Hall Law School, a Master of Business Administration from Schulich School of Business. She volunteers as Vice Chair of the Board at Balance for Blind Adults, a non-profit supporting individuals with sight loss.

Dave Williams is a retired business executive and graduate of York University. We are always anxious for feedback on our articles and this informative interview is no exception. You can email Dave at williamsdavem7@gmail.com