written by:HARRY HERSKOWITZ

This is the first column in a regular monthly series on condominium legal issues of particular interest and concern to condominium unit purchasers, owners, mortgagees and directors, respectively. In this inaugural edition, I am delighted to announce that Ontario’s new condominium legislation (formally known as the Condominium Act, 1998), as well as the regulations promulgated thereunder, will be proclaimed in force, and be effective, on May 5th, 2001. However, subsection 45(2) of the new legislation, dealing with the annual general meeting of unit owners, will not be proclaimed in force until July 4th, 2001.The Ontario government has undertaken comprehensive consultations with all of the major condominium stakeholders (including representatives of the condominium development industry, condominium property managers, condominium unit owners and boards of directors, as well as planners, engineers and architects), in order to develop extensive regulations for the new legislation. The public has been given approximately two months in advance of the date on which the legislation comes into force, in order to give everyone concerned sufficient time to learn about the New Act and the regulations, and to make any necessary adjustments to their business practices or condominium- related affairs.

Amongst other things, the new legislation will:

• enhance consumer protection, by requiring disclosure statements to provide more relevant information, including a table of contents that highlights important issues of concern;
• clarify the responsibilities of the board of directors when repair and/or replacement of any common elements are needed, or when costs are incurred to alter or improve any portion of the common elements;
• mandate that disputes between the condominium corporation and any one or more of its unit owners be resolved by mediation and arbitration;
• allow for the creation of new kinds of condominium developments (such as common elements, phased, leasehold and vacant land condominiums), which will correspondingly increase the range of options in planning and designing new housing forms and condominium communities, including retirement and resort-type projects;
• allow for the amalgamation of existing condominium corporations;
• mandate reserve funds studies, and periodic updates of same, to determine or confirm whether the condominium’s reserve fund (and the level of contributions thereto) are adequate to cover the cost of anticipated major repairs and replacement to the common elements and other assets of the condominium;
• introduce a new form of "status certificate" (which replaces the former "estoppel certificate") that condominium corporations will be required to provide to any potential buyer or mortgagee of an existing condominium unit, in order to furnish the recipient with relevant information about the condominium;
• allow a purchaser of a new condominium unit to elect to pay the full purchase price upon taking possession or occupancy of the unit, and will correspondingly eliminate the use of what was formerly known as the "phantom mortgage" for purposes of calculating the interest component of the monthly occupancy fee that can be lawfully charged to said unit purchaser prior to the final closing of the unit sale transaction;
• give priority to the condominium corporation’s lien for common expense arrears, irrespective of the nature or type of condominium involved (whether residential, commercial, industrial or otherwise);
• mandate the completion of a performance audit (or post-construction engineering audit) of the common elements of each new condominium that has been both marketed and registered after May 5th, 2001, and which audit is intended to preserve any applicable warranty coverage of the common elements provided by the Ontario New Home Warranty Program;
• clarify voting rules and the use of ;
• proxies at owner meetingsallow the condominium corporation to amend its declaration or description with the written consent of at least 80% or 90% of the units owners, depending on the specific nature or type of change proposed; and
• enshrine an "oppression remedy" that enables any owner or mortgagee of a unit to seek court intervention to prohibit any conduct of the condominium corporation, the declarant, or any other unit owner or mortgagee, that is oppressive or unfairly prejudicial to the applicant, and to require the payment of compensation to the aggrieved party where appropriate.

Over the next series of columns, I will be discussing specific provisions or aspects of the new legislation in greater detail, as well as particulars of any relevant judicial decisions affecting condominiums. For your information, copies of the new legislation and the regulations will be available from the government bookstore, Publications Ontario at 880 Bay Street, Toronto, Ontario, M7A 1N8, and may be accessed on the internet by visiting www.ccr.gov.on.ca.

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