Globe & Mail Article #3
More Extensive Disclosure Requirements Under the New Condominium Act

indicate whether the condominium is a freehold or leasehold condominium, and if freehold, the type of condominium it is (i.e., standard, phased, vacant land or common elements condominium). Since the New Act now provides for the creation of various types of condominiums, this statement is intended to ensure that prospective unit purchasers will clearly understand, at the outset, what type or kind of condominium unit is being acquired, and thereby indirectly assists purchasers' legal counsel to identify which sections of the New Act will be applicable to the transaction;
state the name and municipal address of the declarant, and the mailing address of the condominium property, and its municipal address, if same is available;
include a general description of the condominium property, including the types and number of buildings, units and recreational and other amenities, and all conditions that apply to the provision of such amenities;
if a declarant has made an application to convert a property to condominium from rented residential premises, then the disclosure statement must contain a summary of the building/engineering reports required by the approval authority, if any, and the agreements affecting the building which the authority has imposed as a condition of granting its approval (i.e. an agreement pertaining to the repair or restoration of the building, or an agreement giving existing tenants an option to purchase the units in which they reside, etc.);
contain a statement confirming whether the condominium property, or any portion thereof, is (or may be) subject to the provisions of the Ontario New Home Warranties Plan Act, and whether the proposed units and common elements are enrolled (or intended to be enrolled) thereunder. This requirement is intended to avoid any confusion in the mind of prospective unit purchasers as to whether the unit being acquired will enjoy the deposit safeguards and construction warranties provided by The Ontario New Home Warranties Plan Act, in recognition of the fact that certain residential condominium dwelling units (i.e. those created upon the conversion from a previous use) do not enjoy the benefits of The Ontario New Home Warranty Program;
indicate whether any building or unit (or proposed unit) intended to comprise part of the condominium has been converted from a previous use. This is intended to ensure that prospective unit purchasers are sensitized to the potential aged nature of the condominium building and its operating equipment, and the corresponding necessity to carefully review the reserve fund and its adequacy for covering the costs of anticipated repairs and replacement of various building components;
indicate whether one or more units (or proposed units) may be used for commercial or other purposes not ancillary to residential purposes. This is intended to focus the attention of prospective dwelling unit purchasers on the possibility that they will be residing in close proximity to commercial/retail premises (or premises used for other non-residential purposes), which may ultimately benefit (or be an attraction to) the residents in the project, in terms of the convenience provided for accessing and utilizing the products or services available therefrom, but may also have a negative impact on residents, in terms of the noise, smells and/or pedestrian/vehicular congestion potentially generated by such non-residential premises;
include a statement of the portion of units that the declarant intends to market in blocks of units to investors;
include a statement of the portion of units that the declarant intends to lease, to the nearest anticipated 25%. The requirement for such a statement evidences (and perpetuates) the prevailing concept in the housing industry that homeowners take greater care of their premises than do tenants (which may not necessarily be true), and is intended to give some indication to prospective unit purchasers as to the relative likelihood of the condominium project being owner-occupied. Parenthetically, in recognition of the fact that rapidly changing market forces often make it extremely difficult, if not impossible, for the declarant to accurately predict the number of units in a project that it will ultimately lease out to third parties, and the fact that nothing stops unit purchasers from subsequently (and independently) renting out their respective units to third party tenants (which would make reliance upon the declarant's leasing intentions irrelevant), clause 74(2)(c) of the New Act confirms that any change in the portion of units that the declarant intends to lease will not be considered a material change;
include a schedule of the proposed commencement and completion dates with respect to amenities that have not been constructed or completed;
include a list of the amenities proposed to be provided to unit purchasers during the period of interim occupancy;
include or attach a copy of the condominium's existing or proposed declaration, by-laws, rules and insurance trust agreement;
provide a brief description of the significant features of all applicable management agreements, servicing agreements, cost-sharing or reciprocal agreements, insurance trust agreements, and any proposed agreement(s) between the condominium and any other condominium corporation(s). This requirement applies even if such agreements are completed in final form and are included in the disclosure package for ultimate review by unit purchasers and their solicitors;
contain a statement as to whether the condominium is intended to be amalgamated with another condominium corporation, within 60 days after the date of registration;
include a copy of the proposed declaration, description, by-laws and rules for the amalgamated corporation, if available, in those circumstances where the condominium is intended to be amalgamated with another condominium within 60 days of its registration;
include a copy of the proposed condominium's budget statement for the 1st year following registration;
include a copy of the condominium's budget for the current fiscal year, if more than 1 year has passed since the registration of the condominium;
contain a statement setting out the fees or charges, if any, that the condominium corporation is required to pay to the declarant or another person. This requirement in the New Act refers only to fees or charges to be paid by the condominium corporation (as opposed to any of the unit owners), and is not limited to fees or charges relative to the use or operation of the common elements or any other facilities related to the condominium property; and
include any further material that may be required pursuant to the regulations made under the New Act.
In addition to the foregoing, the regulations to the New Act require that the disclosure statement must also include the following, namely:
a copy of sections 73 and 74 of the Act, which sections outline the purchaser's remedies with respect to recission of the agreement of purchase and sale (which will be discussed in the next column);
a statement that the declarant is entitled to retain the excess of all interest earned on money held in trust, over the interest that it is required to pay to the purchaser pursuant to section 82 of the Act;
a statement indicating whether a part of the common elements may be used for commercial or other purposes not ancillary to residential purposes;
if there is no by-law or proposed by-law of the corporation establishing what constitutes a standard unit, a copy of the schedule that the declarant intends to deliver to the board at the turnover meeting;
a statement indicating whether visitors must pay for parking, and if so, the anticipated costs for same, and whether there is visitor parking on the property, and if not, indicating whether visitor parking is available elsewhere, and if so, where;
an identification of the major assets and property that the declarant has indicated that it may provide (presumably for the benefit of the condominium corporation and its residents), even though it is not required to do so;
an indication of the units and assets that the condominium corporation is required to purchase, the services that it is required to acquire, and the agreements and leases that the condominium corporation is required to enter into with the declarant (or a subsidiary or affiliate of the declarant); and
with respect to land that is owned by the declarant (or by a subsidiary or affiliate of the declarant), and that is adjacent to the land described in the condominium description, a statement indicating the current use of the land, the representations, if any, that the declarant has made respecting the future use of the land, and a summary of the applications, if any, respecting the use of the land that have been submitted to an approval authority