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1 Thank You to Our Event Sponsors 1

2 Protecting Condominium Owners Act (Bill 106) Legislative and Regulatory Update August 22,

3 Agenda Condo Community today Communications (information Certificates), Record of Owners and Notices Disclosure by and Training of Directors Meetings, Quorum and Voting BREAK Records Retention and Access (Sec. 55) Condominium Authority of Ontario and Tribunal Q&A 3

4 Condo Community Today Explosive growth over past few years 10,000 residential condo corporations 800,000 residential units Over 1.6 million people Over 40,000 directors Approximately 2,000 condo property mangers 4

5 Background 2012 Ontario government initiated extensive review of the Condominium Act, 1998 Announced licensing of managers Intensive 18- month public engagement 2,000 submissions 200 recommendations 5

6 Bill 106 Protecting Condominium Owners Act, 2015 Reform to Condominium Act, 1998 Not a new Act significantly reformed Condominium Management Services Act, 2015 Reform to Tarion - Conversions 6

7 Status & Next Steps Will be proclaimed in phases September 1, 2017 CAO opens doors limited services at start November 1, 2017 Mandatory training of directors Governance regulations and parts of Act CAT starts Sec. 55 records and access CMRAO opens - Licensing of managers 7

8 Communications to Owners and Mortgagees 8

9 Information Certificates New requirement to provide information certificates to owners and mortgagees 3 types PIC ICU NOIC 9

10 Periodic Information Certificates ( PIC ) To be sent twice per fiscal year within: 60 days of the end of the first fiscal quarter, and 60 days of the end of the third fiscal quarter. 10

11 Periodic Information Certificates ( PIC ) Address for service Names of directors and service address Judgments and legal actions Insurance information Management address Physical or electronic address of corporation 11

12 Periodic Information Certificates ( PIC ) continued... Directors involved in legal action, that have a judgment against the corporation, or are in arrears 60 days or more Number of leased units Judgments - financial implications Maximum insurance deductible chargeable Statement admitting failure to obtain insurance SUB? Must state by-law number 12

13 Periodic Information Certificates ( PIC ) continued... Copy of directors disclosure (litigation, offence conviction, conflict of interest, director/developer affiliation) Budget and amendments - Surplus? Deficit? Reserve fund balance, remaining contributions, anticipated expenditures, and any projected increase Corporation s failure to pay annual fee to CAO Compliance order, if any, by Registrar under s (9) 13

14 Information Certificate Update ( ICU ) Sent within 30 days of: Changes to the address for service of the Corporation or manager Changes to insurance or deductible Insurance policy termination Sent within 5 days of: Loss of board quorum state number of vacancies, request to owners for those intending to be candidates to notify corporation in writing 14

15 Information Certificate Update ( ICU ) Condo corporations can pass bylaws to require that a PIC or ICU be sent on a more frequent basis. A copy of the most recent PIC and any ICU to be made available at the AGM significant increase in volume of paper! 15

16 New Owner Information Certificate ( NOIC ) Sent to new owners that notify corporation of their ownership within 30 days The most recent PIC and ICU must be sent with the NOIC 16

17 Exceptions to Information Certificates Corporations are not obligated to send out the information certificates for any fiscal year if: A turnover meeting has been held Each year the owners of at least 80 per cent of the units (includes parking units) consent not to receive information certificates 17

18 Preliminary Notice A statement providing basic information to owners respecting an upcoming meeting (form in regs.) For instance, the purpose and projected date of the meeting, and the deadline for submitting candidacy, disclosure, information or material to be included in the notice of meeting To be discussed in more detail later 18

19 Mandatory Disclosure by Directors and Candidates 19

20 What does the Act say? Section 29 of the new Act generally provides that no individual can be a condominium director if he or she has not complied with the prescribed disclosure obligations. Once a person is elected to the board, they are subject to ongoing disclosure requirements for the duration of their term. Failure to meet the disclosure requirements would immediately disqualify the person from being a director. 20

21 What do the regulations say? The following must be disclosed by candidates (when they submit their candidacy in the Notice of Meeting package or at a meeting, if nominated from the floor) and/or existing directors: whether they are 60 days or more in arrears of their common expenses contributions Whether they are an owner or occupier of a unit in the corporation whether they have been convicted of an offence under the Act or Regulations in the past 10 years whether they (or their immediate family or any tenant) is involved in legal proceedings with the corporation whether they are a party to or have a material interest in a contract or transactions with the corporation or the developer 21

22 Director Training 22

23 What does the Act say? All directors will be required to complete the prescribed training within 6 months of being elected, re-elected or appointed to a board after November Must be renewed every seven years. Course Free, available online, no test or exam and in modules for easy access by directors. Four of the training modules will be piloted beginning September 1,

24 Meetings Condos now required to send out a preliminary notice to owners in advance of a notice of meeting (standard forms). 24

25 Preliminary Notice A statement providing basic information to owners respecting an upcoming meeting (proscribed form) Send at least 20 days before meeting notice, which must be sent at least 15 days before meeting. For instance, the purpose and projected date of the meeting, and the deadline for submitting candidacy, disclosure, information or material to be included in the notice of meeting

26 Quorum Quorum for the third attempt to hold a meeting will be reduced to 15% for the following types of meetings: AGMs turnover meetings any meeting to appoint a new auditor any meeting to elect directors

27 Voting Condos will be deemed to have a standard bylaw provision stating that owners voting (by ballot, by proxy or by telephonic or electronic means) must always be allowed to vote secretly (i.e., without revealing their names or unit numbers). A Recorded Vote is defined as a vote recorded in writing (by ballot, by proxy or by telephonic or electronic means).

28 Proxies there will be a mandatory standardized proxy form designed to curtail and reduce abuse and uncertainty over proxies may allow for electronic proxies

29 Bylaw Voting The required vote to confirm certain new types of bylaws will be reduced to an ordinary vote i.e., a majority of the votes cast at the meeting. This reduced voting requirement will apply to bylaws to add information to the PIC, UIC or NOIC, to allow for voting by telephonic or electronic means, etc

30 Questions 30

31 Records Sec. 55 Retention and Access 31

32 Records Sec. 55 Retention and Access Section 55 disputes the most common Defines documents that are records - clarity Two basic retention periods: default 7 year minimum period for financial records, operating records, status cert., etc; and unlimited period for fundamental documents (i.e. declaration, by-laws and rules, current agreements and insurance policies). Proxies 90 days unless notified of a claim 32

33 Records Retention Maintain records in paper or electronic format so long as certain requirements are met. Paper records must be kept on the property (if appropriate) or if not on the property, at a location that enables the condominium to perform its duties and that is also reasonably close to the property. Electronic records must be capable of being reproduced within a reasonable time, and they must include a method to protect against unauthorized access. Steps must also be taken to protect against loss, damage or inaccessibility (such as automatic back up). 33

34 Access to Records Four steps for access: Requester s request (prescribed form) Solely related to that person s interests as an owner, purchaser of mortgagee - having regard to the purposes of the Act (not have to state reason) The board s response (prescribed form) - 30 days If reject request state reason The requester s response (prescribed form); and Access, together with an accounting for charges. 34

35 Access Clarification Records: persons in their role as directors can be reviewed (even though relate to an owner or unit) addresses of owners will not be eligible for access - finally clears this up opinions from lawyers, etc. with respect to specific units, owners, or purchasers are exempt ballots and proxies that identify specific units are exempt, unless a by-law provides otherwise. 35

36 Core vs. Non-Core Documents Core documents include: declaration, by-laws and rules and SFAs current budget & most recent financial statements most recent auditor s report record of owners and mortgagees Information certificates sent within last 12 months recent minutes of meetings of owners or the board Most recent RFS Plan 36

37 Charges for Access to Records Core Records no cost for copies provided in electronic format, or paper copies if they requested electronic format and were provided paper. If received paper and did not request electronic, maximum of 20 cents per page for core records; no labour charges can be charged for core records. Generally Labor and copying charges must be reasonable and reimburse the corporation for actual costs incurred Max charge is 20 cents per page 37

38 Charges for Access to Records If the estimated cost is lower than the actual cost, the condo corporation is entitled to payment up to a maximum of 10% above the estimated cost. If the estimated cost is higher than the actual cost, the corporation must reimburse the requester. 38

39 Fine for Non-Compliance Possible fine of up to $5,000 for noncompliance with access request (if unreasonable conduct) and payable to the person requesting the access 39

40 Update on Condominium Authority of Ontario (CAO) 40

41 Call to Action Bill 106: Protecting Condominium Owners Act, 2015 (PCOA) Creation of two new administrative authorities Condominium Authority of Ontario (CAO) Condominium Management Regulatory Authority of Ontario (CMRAO) 41

42 Minister s Announcement On July 25, 2017, the Honourable Tracy MacCharles announced the launch of new protections for condo communities and formally introduced CAO and CMRAO as the two new authorities that will lead these responsibilities. 42

43 Ontario s Administrative Authorities Model Not-for-Profit organizations Regulatory and dispute resolution mandates specified in legislation and regulations Independent, operating at arm s length from the government Self-funded through condominium fees All funds are used for the operation of the CAO and not directed to government 43

44 Founding Board of Directors CAO Tom Wright, Chair Frank D Onofrio, Vice-Chair Armand Conant, Treasurer & Secretary Genevieve Chornenki, Director 44

45 CAO Mandate CAO will launch September 1, 2017, providing new services and protections for condo owners. These include: Easy-to-use information about rights and responsibilities of condo residents Mandatory training for directors of condominium corporations Registration of all Condominium Corporations in Ontario On-line dispute resolution service through a new Condominium Authority Tribunal (CAT) launching on November 1, 2017 more on this later 45

46 Fee Structure - CAO Public engagement survey 2400 responses Majority agree that fees are reasonable: $1 per month per voting unit Fees are payable through condominium corporations. Invoices will go out later this year for the period September 1, 2017 March 31,

47 CAO will provide condominium communities with educational tools and resources on various topics, including: Condominium living; Condominium owners rights and responsibilities; Building management and governance; Buying a condominium; and many others Public Education 47

48 Guided Pathways to Solve Common Issues CAO will provide free online resources to assist individuals to identify and help resolve common issues before escalating into disputes. Guided pathways will offer online self-help tools, templates and how-to guides on a number of topics (e.g. pets, noise, access to records, etc.) 48

49 Director Training Mandatory basic training beginning November 1 st and to be completed within six months of being elected, re-elected or appointed to a board after November 1 st Free, available online, no test or exam and in modules Condo owners, residents and the general public will also be welcome to take the training 49

50 Condominium Authority Tribunal (CAT) CAT will be an online dispute resolution forum with well trained adjudicators, providing individuals with a fast, efficient and cost-effective way to help resolve disputes. Government regulations will specify which disputes can be filed for resolution. Initially, only Section 55 records disputes can be filed with CAT, as authorized by a recently posted government regulation. NB: The CAT will have exclusive jurisdiction to resolve disputes as specified in regulation. Existing dispute resolution mechanisms will continue to apply for disputes outside the Tribunal's jurisdiction. 50

51 Condominium Authority Tribunal, Cont d. CAT will never have jurisdiction to accept applications relating to: Disputes regarding liens Disputes regarding amalgamation and termination Disputes determining title to real property 51

52 Condominium Authority Tribunal, Cont d. Three stages of the CAT dispute resolution process: 1. User Discussion (Negotiation): Parties are provided with access to the CAT s online dispute resolution system, to negotiate in a neutral forum and attempt to resolve the dispute themselves. 2. Assisted Resolution (Mediation): A CAT Member will join the file, and work collaboratively with the parties to attempt settlement of the dispute. 3. Tribunal Decision (Adjudication): A CAT Member will join the file and will conduct a formal adjudication of the dispute, and issue a binding order. 52

53 Condominium Authority Tribunal Orders At conclusion of a proceeding before CAT, the CAT can order: A party to take, or refrain from taking, an action. A party to pay compensation for damages incurred by another party for an amount up to $25,000, or as prescribed. Costs payable to another party, or to the Tribunal. Any costs ordered by CAT can be added to or subtracted from an owner s common expenses. Anything else CAT considers fair in the circumstances. Orders made by CAT can be appealed to Divisional Court exclusively on a question of law. 53

54 CAO - Enforcement The CAO will have the authority to issue compliance orders under section of the Condominium Act, 1998, and to conduct prosecutions for offences under section These compliance orders and offences deal with compliance matters within CAO s knowledge and control specifically: compliance orders can be made for non-payment of assessment amounts by a corporation prosecutions can be brought for non-payment of assessment amounts, and for making false or misleading statements to the CAO (e.g. lying on your return). 54

55 Public Registry Condo corporations will be required to register and file annual corporate information or returns with CAO, and will be responsible for updating this information throughout the year. A comprehensive, searchable online database will include listing of all condominium corporations and their directors, plus other information (e.g. condo type, number of units). 55

56 Founding Board of Directors Condominium Management Regulatory Authority of Ontario (CMRAO) Aubrey Leblanc, Chair John Oakes, Secretary & Treasurer Joan Andrew, Director Gail Beggs, Director 56

57 CMRAO Mandate Once fully operational, CMRAO will offer range of services that help protect and serve the condo community, such as: Regulating condominium managers, limited licensees and management firms. Administration of mandatory licensing system for all condo managers and firms, involving standard education requirements. Responding to public complaints about licensees. Promoting and enforcing compliance with Condominium Management Services Act (CMSA), including a code of ethics for licensees. 57

58 58

59 Questions 59

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