Specific Legal Issues
The Grey Areas
From the Summer 2020 issue of the CCI Toronto Condovoice Magazine.
Upcoming and Proposed Changes to the Condo Act
Changes to the Condominium Act, 1998 (the "Act") have been trickling in over the past 3 years. When the revamp of the Act was first announced, we all watched and speculated on what was to be enacted first and debated how the changes would affect procedures in place. Now, somewhat settled into the new regime, what?
Anyone reading the legislation electronically on the Ontario government's website has seen the "grey areas" – shaded boxes which appear after certain sections, and which may repeal, revoke or add something new to the Act in the … foreseeable(?) … future.
It's most likely that the next "grey area" to be enacted is that dealing with s. 117 of the Act which, in its current form, succinctly prohibits conditions or activities likely to cause damage or injury. The current wording of s. 117 is to be repealed and substituted with:
Prohibited Conditions and Activities
117 (1) No person shall, through an act or omission, cause a condition to exist or an activity to take place in a unit, the common elements or the assets, if any, of the corporation if the condition or the activity, as the case may be, is likely to damage the property or the assets or to cause an injury or an illness to an individual.
(2) No person shall carry on an activity or permit an activity to be carried on in a unit, the common elements or the assets, if any, of the corporation if the activity results in the creation of or continuation of,
(a) any unreasonable noise that is a nuisance, annoyance or disruption to an individual in a unit, the common elements or the assets, if any, of the corporation; or
(b) any other prescribed nuisance, annoyance or disruption to an individual in a unit, the common elements or the assets, if any, of the corporation. (emphasis added)
The prescribed "nuisance, annoyance or disruption" definition would be added to O. Reg. 48/01 as a new section 26. It prohibits any person from causing unreasonable odour, smoke, vapour, light, vibration or infestation by any vertebrate or invertebrate animal or any virus(!), fungus, bacterium or other organism.
O. Reg. 179/17 would also be amended to include disputes related to the above and declaration, by-law and rules dealing with nuisances, vehicles, parking, storage and pets or other animals to disputes that can be heard by the Condominium Authority Tribunal ("CAT") (which is currently only empowered to hear records disputes).
An additional matter that the CAT might consider under the proposed change to O.Reg 179/17 is indemnification or compensation of the corporation, an owner or a mortgagee regarding such disputes. Implementing these new disputes into the CAT regime is not expected to cause any new administrative costs to condos. What remains to be seen is whether indemnification or compensation would include legal fees or such fulsome cost recovery as a court might award under s. 134(5) of the Act in dealing with compliance applications.
The Ministry of Government and Consumer Services sought public feedback on the specific wording of the proposed s. 117 changes in December 2019, aiming to have the new provisions enacted by July 1, 2020.
Other "grey areas" of practical interest but with no proclamation in sight are:
- s. 21.1 – which deals with Shared Facilities Agreements;
- s. 37(3) – adding "reserve fund providers" to the list of persons who may be relied upon to limit a director's liability;
- s. 56(3) – removes language permitting borrowing for budgeted current fiscal year expenses, defers to regulations;
- The repeal of s. 59 – joint by-laws and rules section (which will likely be dealt with under the new Shared Facilities Agreements regime);
- A new section is added (as s. 83.1) – dealing with the annual budget, fiscal year, notice to owners, implementation and amendment and providing notice to owners for non-budgeted expenses;
- s. 60 contains small changes and additions in what an auditor is to report and consider;
- ss. 71/72 – expanded disclosure requirements and condo guides;
- Adding a new s. 84(3) – which presently deals with non-avoidance of contributing to common expenses. The proposed substitution allows for disputes on contribution to go to the CAT and exempts a contribution to common expenses until the dispute is resolved;
- ss. 97 and 98 - "modifications" to common elements, assets and services. A higher monetary threshold is suggested for discretionary common element/ asset/service changes. A new "objective" factor is also added - that the owners, on an objective basis, would not regard the modification as causing a material reduction or elimination of their use or enjoyment of the units they own or the common elements or assets of the corporation;
- proposed revision to s. 89 makes owners responsible to repair a unit after damage (unless the declaration provides otherwise);
- s. 105 – entire section to be repealed and replaced. With the proposed change, the corporation may only extend the circumstances under which an insurance deductible can be passed onto the owner by declaration provision (vs. by-law as the law stands);
- s. 132 has various proposed amendments dealing with mediation and arbitration including that a disagreement regarding any question of law or equity may be mediated or arbitrated between owners and the corporation, potentially setting a process by regulation, not permitting an order that for permanent removal of a person, dealing with compensation or costs orders, etc.;
- s. 135 contains interesting qualifications on when a person may be ordered to permanently vacate property, including posing a health and safety risk, damage to property and assets, a person's non-compliance makes the person unsuited for the communal occupation of the property or the communal use of the property, and no other order will be adequate to enforce compliance prohibit conduct.
There is some certainty that the first changes implemented will be the nuisance and dispute expansion to s. 117, above.
Otherwise, we've known about the "grey areas" for some time but a refresher doesn't hurt. If one were, for some reason, to find themselves isolated or with a little extra time on their hands, exploring the "grey areas" helps to brace and prepare for later and how the industry might change. Of course, with so much tied to the content of regulations it's hard to know for sure, but good to know what to potentially expect!
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