New Developments in Real Estate Law. Tuesday, June 26, 2018

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New Developments in Real Estate Law Tuesday, June 26, 2018

Bill 139 Land Use Planning Changes in Ontario Joel Farber

Bill 139 April 3, 2018 New Law Building Better Communities and Conserving Watersheds Act, 2017 amends Planning Act, City of Toronto Act, Conservation Authorities Act Local Planning Appeal Tribunal Act, 2017 replaces Ontario Municipal Board Act Local Planning Appeal Support Centre Act, 2017 - New 3

Changes to the OMB: Change in Name Local Planning Appeal Tribunal Change in Procedure Much more like an appeal body Zoning/OP No changes on variances/consents/subdivisions No changes on expropriations Initial screening for validity Written submissions & Appeal Record (Only the materials before Council) Time limited oral hearings 4

Restrictions on Appeal Rights: No appeal where Minister is approval authority Municipal Comprehensive Review Single Tier or Upper Tier Growth Plan Conformity OPA (eg. TO Core OPA 406) New Test on Appeals of Municipally Initiated OPA Can only succeed if OPA is inconsistent / not in conformity with Provincial Policy or Plan Inconsistent with Upper Tier Applies to Secondary Plans 2 year moratorium 5

Restrictions on Appeal Rights: New Test on Appeals of OP/ZBL Applications Based on Refusal / Neglect 1. Existing OP/ZBL inconsistent / not in conformity with Provincial Policy; and 2. Proposed OP/ZB conforms to and is consistent with Provincial Policy/Plan. What happens if Council Enacts a By-law in response to Application but not what was applied for? 15 v. 20 storeys 3.5 v. 4 FSI 6

Restrictions on Appeal Rights (continued) Can only succeed on appeal if 1. The ZBA is inconsistent with Provincial Policy or a Provincial Plan; and /or 2. Fails to conform to OP The Hammer 7

BIG TAKEAWAYS No More Appeals Based on Principle of Good Planning No Appeals of Future Urban Boundary Expansions eg. Hamilton 2041 MCR No Appeals on Employment Land Conversions Requests in MCR eg. Toronto OPA 231 8

EVEN IF YOU WIN Municipality gets a 2nd Chance If you manage to succeed on a ZBA appeal the City gets a chance to make a new decision New Decision Leads to Second Appeal 9

Questions? 10

Ontario s Standard Form of Residential Lease Alex Kolandjian

Purpose of the Standard Form Residential Lease The standard form residential lease uses easy-to-understand language to help: landlords and tenants understand their rights and responsibilities reduce illegal terms in leases and misunderstandings caused by verbal tenancy agreements reduce the need for Landlord and Tenant Board hearings to resolve disputes 12

Who Must Use a Standard Form Residential Lease The standard lease will apply to most residential tenancies in Ontario, including: Single and semi detached houses Apartment buildings Condominiums Secondary units (for example, basement apartments) 13

Who Must Use the Standard Form Residential Lease A standard lease is not required for tenancies that have special rules or partial exemptions under the RTA, including: care homes (for example, retirement homes) mobile home parks and land lease communities social and supportive housing exempt from the rent rules under the RTA (for example, housing subject to operating agreements under certain programs or where the tenant receives publically funded rent-geared-toincome assistance) Other forms of housing accommodation that are exempt from the RTA, such as member units in co-operative housing and transitional housing programs that meet certain requirements, are similarly exempt from the standard lease. 14

What is in a Standard Form Residential Lease? The standard lease form contains: 1. MANDATORY FIELDS that must be completed and cannot be altered or removed. These fields include basic information that is included in every lease, including: the names of the landlord and tenant the tenancy term, rent amount and services included other terms which landlords and tenant can agree to, such as rent deposits, key deposits, smoking rules, and tenant's insurance 15

What is in a Standard Form Residential Lease? 2. OPTIONAL ADDITIONAL TERMS, which allow landlords and tenants to agree to terms or responsibilities that are unique to the rental unit. Additional terms not consistent with a mandatory term of the lease or the RTA, are considered void and unenforceable. 3. GENERAL INFORMATION for landlords and renters on rights, responsibilities and void/unenforceable conditions, including: ending a tenancy subletting illegal charges pets guests landlord entry 16

Information for Landlords and Tenants If you sign a residential lease on or after April 30, 2018, it must be a standard form residential lease. If you sign a residential lease on or after April 30, 2018 that does not use the standard form lease, tenants can ask the landlord for one in writing. The landlord must provide one within 21 days. Tenants cannot ask for a standard form lease if they signed a lease before April 30, 2018, unless they and their landlord negotiate a new lease agreement with new terms on or after this date. Additionally, tenants cannot ask for a standard form lease if they sign a fixed-term lease before April 30, 2018, and it renewed automatically to a month-to-month tenancy after April 30, 2018. Landlords and tenants can choose to use the standard form lease before April 30, 2018. However, the rules requiring the standard form lease will only be in effect starting on this date. 17

Information for Landlords and Tenants If a landlord fails to provide the standard form lease within 21 days after a tenant has asked for it in writing, the tenant may withhold one month's rent If the landlord fails to provide the standard form lease within 30 days after the tenant has begun withholding rent, the tenant does not have to repay the one month's rent. Please note, the tenant cannot withhold more than one month s rent and the tenant must continue paying rent for the term of the lease, even if the landlord never gives the tenant the standard form lease. However, if a standard form lease is not provided, special rules allow the tenant to end its fixed-term lease early. 18

Ending a Tenancy Early If the landlord does not provide the standard form lease within 21 days after the tenant has made a written request, the tenant may give 60 days' notice to terminate a yearly or fixedterm tenancy early. If the landlord provides a tenant with the standard form lease after the tenant has asked for it, but the tenant does not agree to the proposed terms (for example, a new term is added), the renter may give the landlord 60 days' notice to terminate a yearly or fixed-term tenancy early. To terminate a tenancy early in this case, the tenant must give the 60 days' notice no later than 30 days after the landlord provided the standard lease. In both cases, the effective date for termination must be the last day of a rental period (for example, the end of a month). 19

Standard Lease Form 20

Standard Lease Form 21

Standard Lease Form 22

Standard Lease Form 23

Standard Lease Form 24

Standard Lease Form 25

Standard Lease Form 26

Standard Lease Form 27

Standard Lease Form 28

Standard Lease Form 29

Standard Lease Form 30

Standard Lease Form 31

Standard Lease Form 32

Standard Lease Form 33

Standard Lease Form 34

Standard Lease Form 35

Standard Lease Form 36

TAKEAWAYS As of April 30, 2018 most residential condo, apartment and house leases will have to be on the standard form. This does not apply to renewals of leases entered into before April 30, 2018. There are penalties and even early termination rights if the form is not used. The standard form can be supplemented, but cannot contain any provisions contrary to the Residential Tenancies Act. See your lawyer if you need to clarify what can and can t be included. 37

Questions? 38

Upcoming Changes to the Construction Lien Act Kenneth Movat

Introduction December 2017: Construction Lien Amendment Act ("Bill 142") receives Royal Assent Purpose Reduce delays in construction projects Expedite the adjudication of construction disputes 40

When will these changes come into effect? The Construction Lien Act ( CLA ) will be renamed the Construction Act ( Act ) The amendments will come into effect in two phases: July 1, 2018: amendments to lien rights and holdback payments October 1, 2019: new provisions on prompt payment and a new framework for dispute resolution 41

Who will be affected? The Act will not apply retroactively to construction contracts. The CLA will continue to apply where: a contract for improvement was entered into before July 1, 2018, regardless of when any subcontract under the contract is entered into; a procurement process was commenced before July 1, 2018; or a premises is subject to a leasehold interest and the lease was first entered into before July 1, 2018. *Examples of a procurement process: making of a request for qualifications, a request for proposals or a call for tenders. 42

Phase 1 Changes: July 1, 2018 Updated definitions i) Improvement: The Act modifies the definition of improvement to capture a "capital repair". Capital repairs will be defined in the Act as repairs that are intended to extend the normal economic life or improve the value or productivity of the land or any building or structure on the land. The definition excludes maintenance work. ii) Price: The Act expands the current definition of price under the CLA. The definition of price will include any direct costs incurred as a result of an extension of the duration of the supply of services or materials to the improvement for which the contractor or subcontractor is not responsible. Substantial performance Substantial performance will be found where an improvement is ready for use or is being used for the purposes intended and where it is capable of completion at a cost of no more than 3 per cent of the first $1,000,000 of the contract price, 2 per cent of the subsequent $1,000,000 of the contract price, and 1 per cent of the balance. Prior to this amendment, the thresholds for substantial performance were $500,000. When contract deemed completed A contract will be deemed completed when the price of completion, correction of a known defect or last supply is not more than the lesser of 1 per cent of the contract price and $5,000. 43

Increased liens rights Termination of a construction contract will trigger the clock for lien preservation. Time for preserving a lien will increase from 45 to 60 days. 45-day deadline for perfecting liens will extend to 90. *New total period of 150 days, rather than 90 days as before. 44

Lien rights continued When preserving a lien related to the common elements of a condominium, you must give notice to both the condominium corporation and each unit owner. When vacating a lien by payment in to court, the security to be paid may include up to $250,000 for security for costs. If a landlord funds a tenant improvement, contractors completing the improvement will have a lien right against the landlord's interest in the land. The lien will be able to cover up to 10 per cent of the amount of the landlord funded tenant improvement. A lien claimant may be held liable if they exaggerate or make a false lien claim. Courts will be able to discharge a lien that is frivolous, vexatious or an abuse of process. 45

Holdbacks Holdbacks can take a form other than cash, such as by a letter of credit or bond. Release of holdbacks A basic holdback or a holdback for finishing work will have to be released at the end of the applicable lien period. If a contract exceeds $10 million and it is agreed to by the parties, a holdback can be paid out annually or as stages of the work are completed so long as there are no outstanding, registered liens on the payment date. 46

Trust accounting Trust funds received for all new projects after July 1, 2018 must be deposited into a trust account that bears the name of all trustees. Contractors must keep diligent records of their trust accounts. Trustees will have to keep a written record of all amounts paid into the trust account and amounts paid out, and of any other transfers. Subcontractors will have stronger claims that certain funds held by contractors were held in trust for their benefit. 47

Mandatory surety bonds Public contracts If the contract price is $500,000 or greater, a labour and material payment bond and a performance bond will be required. Bonds If the contract price is between $500,000 and $100 million, each bond must be equal to 50% of the contract price. If the contract price is over $100 million, each bond must be equal to $50 million in coverage. 48

Phase 2 Changes: October 1, 2019 Liens Liens can no longer attach to municipal lands. Prompt payment New concept: proper invoice Payment deadlines where a proper invoice has been submitted. An owner will have to pay a contractor within 28 days of receipt of a proper invoice. Parties can create their own payment schedule, however, if the construction contract is silent on proper invoices, they will be presumed to be due on a monthly basis. If an owner disputes a proper invoice, they will have to provide notice of non-payment to the payee within 14 days of the receiving a proper invoice. In this notice, the owner will be required to state the amount not being paid and set out reasons for why the owner refuses to pay. 49

Prompt payment and contractors When a contractor submits a proper invoice and receives payment, it will have 7 days to pay each subcontractor that did work relating to the proper invoice. If a contractor is not fully paid, it will be able to provide notice of non-payment to its subcontractor. If the contractor does this, the contractor will have to undertake to refer the matter to adjudication within 21 days after providing notice to the subcontractor. If the contractor disputes the entitlement of the subcontractor to any payment, the contractor will have to provide a notice of non-payment that states the amount not being paid and the reasons for the refusal of payment. Even if an owner makes no payment, a contractor has 35 days after it sends its proper invoice to pay its subcontractors, unless it provides a notice of nonpayment. If a party fails to pay an amount due after the non-payment is adjudicated, the party entitled to payment will be able to suspend work or terminate its contract. 50

Dispute adjudication New alternative dispute resolution mechanism. This mechanism will be available to all parties. A party may refer a matter for interim adjudication by a new body, the Authority, at any time prior to the completion of the contract or subcontract, even if the matter is already the subject of a court action or arbitration. With consent, a matter could be referred for adjudication after completion of the contract. 51

The Authority The Authority will adjudicate disputes concerning: a) the value of services or materials under the contract; b) payment under the contract or change of services under the contract; c) non-payment disputes arising under the prompt payment regime; d) set-off amounts; and e) payment or non-payment of holdback amounts. *The jurisdiction of the Authority is not comprehensively defined and other disputes will be addressable under this mechanism. 52

Who will adjudicate the dispute? Parties will not be able to agree upon an adjudicator in advance. If parties cannot agree on an adjudicator, the referring party must request the appointment of an adjudicator by the Authorized Nominating Authority ("ANA"). The ANA will appoint an adjudicator within 7 days of receiving the request. Adjudicators will provide their decisions within 30 days of receiving any requested documents related to the matter. Adjudication fees will be split by the parties, regardless of the outcome and each party will bear its own costs. Parties and their adjudicator will be able to consent to an adjudication fee. If an agreement cannot be reached, fees established by the Authority shall apply. The decisions will be enforceable by the courts. There is no appeal process available within the adjudication regime. 53

Going forward Review the date that the contract(s) was/were entered into. Expect to provide affidavit evidence in relation to the dates contracts were entered into. Make sure your clients invoices meet the definition of a proper invoice. Parties can determine their own payment schedules (i.e. in their contracts). 54

Questions? 55

New Developments in Condominium Law David Thiel

Today: A. Overview The Process B. Condominium Management Services Act, 2015 C. Amendments to Condominium Act, 1998 57

Overview - Legislative Changes Bill 106, Protecting Condominium Owners Act, 2015 An Act to amend the Condominium Act, 1998, to enact the Condominium Management Services Act, 2015 and to amend other Acts with respect to condominiums Since mid-2012: Various consultations with condominium industry and the public December 3, 2015: Bill 106 received Royal Assent Condominium Management Services Act in effect Condominium Act, 1998 only a portion in effect 58

Condominium Management Services Act, 2015 Licensing Requirement Essentially, anyone providing "condominium management services" must be licensed to do so. The definition of "condominium management services" is broadly defined. A large number of exceptions, including architects, engineers, lawyers, insurance brokers, banks and various other roles. Three types of license: General, Limited, Transitional. "Condominium Management Providers" (essentially, the property management firms including sole proprietorships) would also need to be licensed and would be subject to various other requirements. 59

Beyond Licensing Requirements Condominium Management Regulatory Authority of Ontario restrictions on managers soliciting proxies requirements in management agreements disclosure by managers of an interest in contracts turnover of documents by managers upon termination (within ten (10) days) complaints process and discipline legal standing to enforce management agreement 60

Condominium Act, 1998 A. Condominium Authority B. Phase 1 of Regulations C. Other Issues 61

Condo Authority Overview One of the central changes in Bill 106 is the creation of the Condominium Authority of Ontario ( CAO ) The funds to operate the Authority will be raised through special powers to collect fees from condominium corporations. $1 per month fee per (voting) condominium unit There are a series of returns to be completed, including an initial return, a turnover return and an annual return. Public Registry is live 62

Condo Authority - Tribunal The centrepiece 'Condominium Authority Tribunal' Condominium corporations, owners or mortgagees eventually to be able apply to the Tribunal for the resolution of certain types of disputes - established by regulations. Currently, only records requests disputes are heard. Likely disputes: enforcement of declarations, by-laws and rules, procurement processes, access to condominium records and procedures for requisitioning a meeting of owners. Explicitly excluded: disputes relating to ownership, title to property, liens, occupier's liability, dangerous activities and some other matters. 63

Phase 1 Regulations Limited areas covered: I. Communications -Information Certificates to Owners II. Director Qualifications and Training -mandatory disclosures and training (online) III. Meetings -mandatory forms, preliminary notice of meeting IV. Records -new structured procedure, penalty of up to $5,000 64

Future Changes Chargebacks Requisition Meetings Disclosure Statements Condominium Guide First Year Budget Deficiency Pre-closing Budget Material Changes some clarification Procurement 65

Other Condominium Legal Developments Electric Vehicle Charging Systems new Regulations in force Airbnb, Short Term Rentals (Ottawa-Carleton Standard CC 961 v. Menzies) Cannabis 66

Questions? 67