A growing number of condo corporations are struggling to get reasonable insurance coverage, says Toronto condominium lawyer Armand Conant.

“It’s a mammoth problem,” says Conant, a partner with Shibley Righton LLP. “In light of the number of claims being made by condo corporations, insurers appear to want to get out of the industry.”

A recent Ontario Superior Court decision highlights the restricted rights that condominium unit owners have to renovate compared with traditional freehold homeowners, says Toronto condominium lawyer Armand Conant.

The judge in the case ordered a unit owner to reach an agreement with his condominium corporation over issues including maintenance and liability related to a deck installed in the backyard of the unit.

Owners cannot prevent condominium corporation representatives from entering their units if they are fulfilling the corporation’s duties under the Condominium Act and if reasonable advance notice has been given, says Toronto condominium lawyer Armand Conant.

In many ways, the condominium industry was a victim of its own success, Toronto condominium lawyer Armand Conant tells #WeSpeakCondo.

As the number of units in Ontario exploded over the last 15 years, the Condominium Act, 1998, which governs condominiums in the province, simply couldn’t keep up, he tells the condo-centric podcast.

“Over the years, people were starting to go to the government … saying ‘We have problems,’” says Conant, senior partner in the condominium law group with Shibley Righton LLP.

“Because the condo industry grew ... so exponentially, by 2012, we had so many new condo units. By then, we were probably 600,000 to 700,000 residential units in Ontario. We now have over 800,000.”

Conant tells the podcast interviewer that he has been involved in the reform process since 2002.

“It took us more than eight years of constantly going to the government,” he tells AdvocateDaily.com. “The legislative committee of the Canadian Condominium Institute and the Association of Condominium Managers of Ontario put together a 120-page brief on suggested improvements to the Act, and then finally in 2012, the government announced a formal process of reforming the Condo Act.”

He says there are "extensive reforms in the legislation that received Royal Assent in December of 2015. Not all of the reforms have been proclaimed, but of those that have, some of the key changes include significant reform to the governance of condo corporations, the licensing of condominium managers, the creation of two administrative authorities — the Condominium Authority of Ontario (CAO), which includes the Condominium Authority Tribunal, and the Condominium Management Regulatory Authority of Ontario (CMRAO) — to deal with licensing and regulation of condominium property managers."

During the 83-minute podcast, Conant, one of 11 people appointed to the government panel that did the final analysis of — and recommendations for — reforms to the Act, leads listeners through the history of the reforms and the details of the changes. He also discusses the CAO, the CMRAO and how the changes impact condominium owners, managers and boards of directors.

Creating a separate regulator for builders of new homes is a “step in the right direction on many fronts,” Toronto condominium lawyer Armand Conant tells The Lawyer’s Daily.

But Conant, partner and head of the condominium law group with Shibley Righton LLP, says there’s still “a lot of unanswered questions” about the government’s plan to revamp the Tarion Warranty Corporation.

“I’ll give you an example,” he tells the online legal publication. “When they talk about separating the warranty administration and its builder and vendor functions, that makes perfect sense. I think it’s a positive step.

"But we have to see how that’s going to be structured. Who’s funding what? Who’s going to be on the board of each? What role will consumers, buyers and stakeholders have? What role will developers and builders have in those two organizations? What are going to be the mandates? What are going to be the operating procedures? There’s a lot we don’t know yet, but the concept of separating is a good idea.”

In a press release, Bill Walker, the minister of government and consumer services, says the system is “broken.”

“That is why I am pleased to announce that we are taking decisive action to put the people of Ontario first by transforming Tarion and strengthening consumer protection,” Walker said.

He also announced a new round of consultations to “explore whether to break Tarion’s monopoly by introducing multiple warranty providers — a system that is available in other provinces. Walker said he hopes to have a decision later this year,” reports the Toronto Star.

Conant tells The Lawyer’s Daily there’s a public perception of bias with Tarion.

“I think we need more information about developers, or the development and the developer behind it, for the public,” he says.

Conant would also like to see Tarion’s deposit process improved.

"The problem we’re facing is when that money is being released to developers," he says. "There’s a whole process of disputing construction and disputing whether it’s warrantable or not and trying to get the developer to fix deficiencies. This is a whole regimented process under Tarion.”

Conant says that while Tarion "sometimes can work well, there’s big room for improvement.”

Armand Conant, head of the condominium law group at Shibley Righton LLP, said there’s a public perception of bias with Tarion because it’s funded solely by developers. He noted that having everything “under one umbrella” meant buyers weren’t able to find information about whether their builder or developer had a good reputation.

“I think we need more information about developers, or the development and the developer behind it, for the public,” he said, calling the government’s plan to increase transparency a good idea

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Toronto condominium lawyer Armand Conant tells CondoBusiness magazine he’s hopeful the new Ontario government will follow through with changes to the Condominium Act that haven’t yet been proclaimed.

The online publication says the fate of many of the planned changes is uncertain.

“While the Condominium Act reforms that have been phased in to date are now law, the outstanding legislative provisions are sitting on the books awaiting accompanying regulations,” it reports. “After regulations are in place, the outstanding legislative provisions must be proclaimed into force in order to take effect.”

Conant, a partner and head of the condominium law group with Shibley Righton LLP, tells AdvocateDaily.com that he's looking forward to some of those regulations, including one that would "better define for boards what 'adequate' means for financing their reserve funds — which is collected through the monthly fees and used to pay for major repair or replacement of the corporation’s components and assets.

He's also looking forward to a regulation "that would require developers to provide better initial funding so that new corporations are not behind the eightball from the outset. And one that would prohibit a developer from downloading costs to the corporation with the fees not starting until the second year of operation."

Underfunded reserves often force corporations to hike monthly fees in order to pay for unforeseen reserve fund expenses — even when a building is brand new, Conant says. Those added costs can come as a shock to buyers who may have been attracted by lower unit prices — only to be hit by higher than expected monthly fees after they move in, particularly in the corporation's second year, he says.

“This is what one of the reforms was going to prohibit, so that you don’t have a nasty wake-up call in year two, with a huge increase in common element fees because a bunch of costs were deferred to year two,” Conant tells CondoBusiness.

“I do hope that we get to the rest of the [Condominium] Act as soon as possible,” he says.

Since it’s official launch, the Condominium Authority of Ontario (CAO) has been busy providing support to the condo community, Toronto condominium lawyer Armand Conant writes in Condovoice magazine.

And, to continue to grow and improve, the authority is looking for suggestions from users to improve the system, says Conant, a partner and head of the condominium law group with Shibley Righton LLP.

“It is through feedback and input from all stakeholders that the CAO can best meet the needs of condo communities. The CAO looks forward to, and encourages, as much feedback as possible,” he says.

In addition to providing information about rights and responsibilities, the CAO offers “resources to help them identify and resolve common issues before they escalate into disputes,” says Conant.

The CAO also provides mandatory training for all condo directors elected, re-elected or appointed after Nov. 1, 2017, and offers the province’s first online dispute resolution system, the Condominium Authority Tribunal (CAT), he explains.

“In addition,” Conant writes in the magazine’s recent edition, “the CAO has a Customer Care Team that has supported condo communities through as many as 30,000 individual interactions either by email or phone since its launch. The CAO is also pleased to report that almost 9,000 of 11,000 corporations in Ontario have registered.”

He tells AdvocateDaily.com that since writing the article, the numbers have increased to more than 9,000 of more than 11,300 condo corporations in Ontario.

Conant says the registry has also “delivered on the government’s requirement” to provide a searchable, public registry of condo corporations, which is now available on the CAO’s website.

“The public registry contains information prescribed by Ontario Reg. 377/17, such as the name and type of corporation, address for service and the names of the corporation’s directors and, if any, managers. The information that the registry displays is based on condo returns filed by corporations."

He says that as of this fall, more than 9,200 returns have been filed.

Conant points out that no personal information is disclosed and the registry cannot be used for commercial purposes.

He says more than 9,000 people have already completed "the 21 modules that comprise the CAO’s director training, which helps to equip condo directors with skills and information to assist them in directing the affairs of the corporation, resolving issues and fostering a positive condo community.

“Feedback has been very positive. Early results indicate that the majority of respondents were very satisfied with the training (84 per cent) and said they would recommend it to others (94 per cent).”

He says the website provides information to help condo owners and residents resolve common problems — such as records, noise, personal property and odour issues — before they become formal disputes.

For issues that cannot be resolved, writes Conant, the CAT provides “a fast, efficient and cost-effective way to help resolve disputes. Under s. 55 of the [Condominium] Act, the CAT can currently accept cases about disputes related to condominium corporation records.”

The CAT is made up of 13 members with diverse backgrounds in mediation, adjudication, condominium law, technological innovation and life in condominium communities, he says.

“The CAO continues to refine its online information and tools and the CAT-ODR [online dispute resolution] system to address feedback from users. The CAO is looking to expand and enhance the CAT–ODR system, including opportunities for integrated teleconferencing and videoconferencing,” writes Conant.

Proposed reforms to the Smoke Free Ontario Act have been put on pause by Premier Doug Ford. The proposed regulations which prohibited vaping in non-smoking areas as well as tighter restrictions to the retailing of vaping and ancillary products have been halted until the new government can further examine the health impact that surrounds the use of vaping. The Premier's spokesperson Simon Jefferies confirmed "“The current provisions in the Smoke Free Ontario Act and the Electronic Cigarettes Act remain in effect and will continue to be enforced”.

To see further legislative changes for which the new government has pressed “Pause”, visit Global Public Affair link at: https://mailchi.mp/globalpublic/global-public-affairs-ontario-update-n27q5wu6nx?e=ac66f7e60b

Some condominium corporations are struggling to address the growing popularity of short-term rentals, Toronto condominium lawyers Armand Conant and John De Vellis write in The Lawyer’s Daily.

“They create a significant problem for condominium corporations, from increased wear and tear on common elements, increased security costs, disruption and general anxiety as residents complain that what they thought was their home has been turned into a hotel,” say Conant, head of the condominium law group with Shibley Righton LLP, and De Vellis, who also sits on the firm’s condo group.

They say it’s often a tenant — not the owner — who offers the unit for rent, adding that a veritable “cottage industry has blossomed” where people rent from unit owners on a long-term basis and then lease to others for short-term stays.

Sometimes they are featured on specialty websites but in other cases, the tenant has created their own online portal where they list "a number of units at various locations, all available for rent on a hotel-like basis," Conant and De Vellis explain. "Often the owner has no idea what is happening to their unit."

Tenants who sublet may “run afoul” of the Residential Tenancies Act, 2006, which states that a rental unit may only be sublet with the consent of the landlord, Conant and De Vellis say. It also states that they cannot charge more than they pay in rent to the owner.

“For condominium unit owners, these unlawful sublets are not just a nuisance, they may create a big financial headache,” they write.

“That’s because most condominium corporations have indemnity clauses in their declarations that make the owner responsible for all costs incurred by the condominium corporation, including legal costs, in the event the owner or the owner’s tenants breaches the condominium corporation’s declaration, bylaws or rules.”

Most condominium declarations stipulate that units can only be used as private, single-family residences.

Conant and De Vellis say the courts have defined a “single family” as a “social unit consisting of parent(s) and their children, whether natural or adopted, and includes other relatives living with the primary group.”

They cite a 2016 Ottawa case, where the court ruled that leasing a unit on a repeated, short-term basis was a violation of the single-family-use restriction in the declaration.

The court said, “’Single-family use’ cannot be interpreted … with units being offered to complete strangers on the internet, on a repeated basis, for durations as short as a single night … [and] is incompatible with concepts as ‘check in’ and ‘check out’ times, ‘cancellation policies,’ ‘security deposits,’ ‘cleaning fees,’ instructions on what to do with dirty towels/sheets and it does not apply to credit card payments.”

Not only were these cited in the case, Conant and De Vellis write, they’re also typical of how many units are advertised online.

They say many corporations have passed rules that set a minimum rental period for units and the courts have upheld minimums as lengthy as four months.

Conant and De Vellis also write that the Condominium Act, 1998 “requires that an owner of a leased unit notify the condominium when a unit is leased, provide the name of the tenant, a summary of the lease, and provide the tenant with a copy of the condominium’s declaration, bylaws and rules, none of which is followed in a typical short-term-lease scenario.”

Some declarations, particularly in buildings close to entertainment centres, allow short-term rentals, they say.

“This prevents the condominium corporation’s owner-elected board from passing rules providing minimum rental periods or otherwise prohibiting short-term rentals.”

In a recent case, the court denied a corporation’s attempt to have the provision declared invalid.

“The condominium had argued that the declaration had impermissibly granted a right, which would amount to a positive covenant, but the court disagreed, stating that the declaration simply defined the scope of the restrictions on the use of the property by making clear that the short-term leasing are not restricted uses,” write Conant and De Vellis.

“The bottom line for owners is they must be aware of what they are buying. If owners are expecting to live in a community of long-term residents, they should be sure that the declaration does not prevent the board from regulating short-term rentals. On the other hand, if there are restrictions against short-term rentals, owners need to be vigilant in not allowing their units to be used in that manner.”

New warranty coverage will provide long-overdue protection for purchasers of converted condos, Toronto condominium lawyer Armand Conant tells AdvocateDaily.com.

Since Jan. 1, changes to Ontario's New Home Warranties Program have extended coverage to units and common elements in developments identified by Tarion — the province’s new home warranty provider — as “residential condominium conversion projects.”

Conant, a partner and head of the condominium law group with Shibley Righton LLP, says conversions that incorporate aspects of existing buildings, such as former warehouses, office buildings and churches, have been popular in Ontario and particularly in the Greater Toronto Area, especially as the supply of land for new buildings diminishes.

“The problem was that if even one square foot of the pre-existing building survived, there was no Tarion coverage for the entire building,” he explains.

“This has been a long-standing issue and we in the condo industry have been pushing for a number of years to get this type of coverage included for residential conversions, so it's a really welcome development.”

Under the amendments to the program, conversions will have some of the same statutory warranties that are extended to all condominium projects, including deposit protection, delayed occupancy coverage, as well as the one-, two- and seven-year warranties, according to Tarion.

An exception, however, rules out the possibility of the first-year warranty on work and materials applying to pre-existing elements, such as the foundation or exterior cladding.

Conant has seen first-hand the hardship caused by the lack of warranty coverage in converted condos in his role as court-appointed administrator for a condominium corporation whose developer left an unfinished building and a host of infrastructure problems.

Without warranty coverage, unit owners were forced to raise more than $2 million to get the building up to scratch.

“The construction deficiencies were horrific and these people had nowhere else to go but their own pockets. If there had been coverage, it wouldn’t have paid the full amount, but at least it would have helped,” says Conant.

He says the new warranty coverage will not apply retroactively but only to conversions where the "first arm's length agreement of purchase and sale with the developer" was signed after Jan. 1.

The changes were part of an extensive revamp of the province’s Condominium Act, 1998 and the Ontario New Home Warranty Plan Act. Conant sees this new warranty coverage as an important success of the reforms.

“Along with licensing for managers and enhancing consumer protection for purchasers and owners, warranty coverage was a significant initiative that the industry was looking for, so it’s really good news," he says.

"When you look at the community today, there are more than 1.6 million people in Ontario who live in condos and that’s only going to keep increasing.

“The bottom line is that this is a big improvement by the provincial government towards enhancing consumer protection. There are probably going to be a few more bumps along the way, but major strides have been made,” says Conant.

Toronto condominium lawyer Armand Conant will discuss a variety of condo issues at two upcoming events.

Conant, partner and head of the condominium law group with Shibley Righton LLP, will speak at an event organized by MPP Soo Wong on Feb. 12 from 6:30 to 8 p.m. at the Bridlewood Library, 157A - 2900 Warden Ave., Scarborough.

The goal of the event is to inform condo owners about the Condominium Authority of Ontario (CAO) and the Condominium Authority Tribunal (CAT), the new online tribunal that helps to settle condominium-related disputes in Ontario.

Conant will also speak at a telephone town hall event on March 1 between 7:30 and 8:30 p.m. The event is being organized by MPP Dipika Damerla.

The goal of the event is to inform constituents about the CAO and CAT, and about recent changes to the Condo Act. The discussion will include new requirements for managers and directors, and general condo governance, such as record keeping.

A deal between Airbnb and a Toronto condominium — believed to be a first in Canada — should be carefully studied to understand the legalities, says Toronto condominium lawyer Armand Conant.

“We will absolutely see more of these agreements. But once you start saying your building is available for short-term rentals, that raises many issues,” Conant tells AdvocateDaily.com.

“Since condo corporations are not-for-profit corporations, raising income from this type of arrangement could possibly be a problem," he says.

Critics say in a Toronto Star article that the agreement essentially makes the condo development a hotel.

Conant, a partner with Shibley Righton LLP and head of its condominium law department, tends to agree.

“Once the board of directors of the condo corporation says, ‘Hey, this is a way to make bucks for the condo corporation,’ it has the potential of making these buildings similar to hotels.”

Although not common, he says there are some condo corporations whose declarations state that residential units can be rented for short-term or even daily use.

These buildings are usually near event venues, such as the Air Canada Centre. In these cases, the developer does it for marketing purposes, Conant says.

“If that’s in your declaration, you’re deemed to have read it when you bought it. I can understand that," he says.

“When they buy a condo, most people believe they have purchased in a residential building and not a hotel.”

Some of the complaints about having short-term rental units in condos are noise and cleanliness as more people come and go, The Star article indicates. It reports that the condo will get a five- to 15-per-cent royalty, which Conant says will help pay for extra maintenance services that are now needed.

“There may be no net loss for the extra cleaning perhaps, but extra noise and damage to the building are different issues,” he says. “What if someone is coming in for a rock concert and afterwards they go back to the unit and party?”

He says that will interfere with the quiet enjoyment of other residents.

“The fact you’re getting money to cover extra costs doesn’t matter. If I’m going to reside there, I did not buy into living in a hotel.”

It also raises issues about the building code, fire safety requirements, zoning and property taxes, he says, adding, could your property assessment classification change from residential to commercial?

Conant says there are two remedies for owners who are against the use of the building for short-term rentals.

“You can go to court and argue the board had no legal power to sign that agreement, or someone has to organize owners to try to remove the board and replace it with a board that would either terminate the agreement or, if possible, avoid entering into one in the first place.”

He says both options are expensive and could drag on for some time.

Conant says he can see why it may be appealing for condo boards to enter these types of agreements as it might help lower common element fees marginally, but that's the very issue that might affect the corporation's not-for-profit status.

“There is always pressure on a board to keep those fees as low as possible. That leads to directors looking for other sources of income for the corporation," he says.

"Being a condo lawyer — and having been a condo director for six years — I can understand that boards should always look at ways of keeping fees as low as reasonably possible while maintaining the services in the building and protecting the market value of the units, but I wonder if an Airbnb partnership is worth the revenue," says Conant.

“You’re changing the fundamental nature of a residential building and, in my view, that outweighs the fact that they can get extra royalties from Airbnb.”

Conant says he’s not necessarily against these types of short-term rental agreements, but a board must carefully consider the rights of the owners and residents before inking a deal with the hospitality company.

He adds that "this will all have to be considered in light of the new City of Toronto zoning by-law, which comes into effect on June 1, that will allow short-term rentals if certain rigorous conditions are met."

When Toronto condominium lawyer Armand Conant began in the condo industry more than 25 years ago, there were fewer than 1,000 condo corporations in the city.

There are now more than 2,500, says Conant, partner with Shibley Righton LLP. And that’s just within the city of Toronto. More than 1.5 million Ontarians now live in condos, according to a recent Globe and Mail story.

With that kind of growth comes the inevitable growing pains, Conant tells AdvocateDaily.com.

“In some ways, the industry became a victim of its own success and the legislation had a tough time keeping up with the phenomenal growth,” he says.

“In the mid-1990s, when the current legislation was being drafted, nobody could have anticipated the incredible growth. They couldn’t have envisioned the legislative tools needed to keep pace and deal with the growing complexity of the industry.”

Within a few years of the current legislation becoming law in May 2001 — and despite the improvements it provided — it became apparent that further legislative reform was needed, says Conant.

The government started reviewing the Condominium Act, 1998 in 2012 "with a new and innovative procedure that started with broad-based public engagement," he explains.

After considerable consultation and the work of numerous committees, the government introduced Bill 106 in early 2015. The bill, known as the Protecting Condominium Owners Act, 2015 (PCOA), received Royal Assent in December 2015.

“The bill covers three main areas,” says Conant. “The first substantially reforms — but doesn't replace — the current legislation and its regulations. Next is the mandatory licensing of condo property managers, under a new statute called the Condominium Management Services Act, 2015 (CMSA). And the third is reforms to the Tarion warranty coverage.

“There was never any Tarion coverage for conversions — only for new builds. Bill 106 is amending the legislation so that there will be some coverage for conversions.”

The PCOA, explains Conant, does not become law until the draft regulations have been passed. The regulations are set to be phased in so that corresponding portions of the amendments to the Act can be proclaimed into law. The balance of the PCOA can then be phased in as the regulations are passed, which Conant says is hoped to be completed in 2018.

He adds that Phase I of the regulations for the reforms to the Act, which will come into effect this fall, will impact directors, owners and corporations. It will focus on communication from boards to owners; governance; mandatory training of directors; and the creation of the Condominium Authority of Ontario, which will open its doors for limited services on Sept. 1, and the Condominium Authority Tribunal, which will begin Nov. 1 for the issue of corporation records and access to them.

“In the 1990s, the regulations were sizable, but they weren’t huge. Most of the details were in the Act rather than the regulations,” he says. “This time around, most of the details are in the regulations. They did that on purpose because regulations are easier to change than legislation.”

Conant believes Bill 106 addresses the issues within the industry “fairly well.”

“The drafters really did try to understand the condominium industry,” he says. “They dove in, they studied, they analyzed. So far, I think they’ve done a good job. Are there problems? Of course there are, as already people are starting to comment on certain provisions. That inevitably happens with all new legislation.

While it may not solve all the industry’s problems, it is a big improvement, says Conant, who’s been a member of all the government committees involved in reforming the Condo Act. He was also appointed one of the founding directors of the Condominium Authority of Ontario.

With so many people now living in condos, the changes are particularly important. Conant says approximately half of all residential sales in downtown Toronto are condos.

The industry has certainly come a long way since condos were "made legally possible" in 1967, reports the Globe and Mail. From relative obscurity, condos have transformed many Toronto neighbourhoods.

With the city’s red-hot housing market pricing new homes out of the grasp of many, condos continue to be a more affordable option. According to another Globe and Mail story, as of mid-July, the average condo was still $503,188 cheaper than the average detached house in the Greater Toronto Area.

Conant says reforms to the Condo Act will help protect consumers trying to realize their dreams of home ownership and will make all communities more harmonious to live in.

“Don’t forget that the real impetus for all the reforms is consumer protection,” he says. “That means protection for first-time buyers from developers and it also protects people who own units and live in condominium communities. These reforms are trying to enhance consumer protection for all aspects of the condo industry.”

Recent changes to condominium legislation represent a “brave new world” for the industry, with stakeholders hoping that new rules will significantly improve the community, enhance consumer protection and not stifle development, Toronto condominium lawyer Armand Conant writes in the spring issue of Condo Confidential.

As Conant, partner and head of the condominium law group at Shibley Righton LLP, explains, changes began in early December 2015 when Bill 106 received Royal Assent and was officially called the Protecting Condominium Owners Act, 215 (PCOA).

“The three main areas it covers are: (a) major reform to our current condo legislation – the Condominium Act, 1998 (the ‘Act’); (b) legislation for licensing of managers – the Condominium Management Services Act, 2015 (‘CMSA’); and (c) reforms to Tarion warranty coverage to cover conversions. The government has also recently announced a whole-scale re-structuring of Tarion itself,” writes Conant.

The PCOA, he says, does not become law until the draft regulations have been passed. The regulations are set to be phased in so that portions of the amendments to the Act can be proclaimed into law. The balance of the PCOA can then be phased in as the regulations are passed, which Conant says is hoped to be completed by early 2018.

“The task has turned out much more complicated than originally expected as they will be significantly lengthier than our present regulations,” writes Conant, who participated in consultations with the ministry about the regulations.

Phase I of the draft regulations for the reforms to the Act will impact directors, owners and corporations more immediately, says Conant, and will focus only on governance issues.

The draft regulations, he says, deal with four key areas. The first is communications from corporations to purchasers, including three different types of prescribed certificates/forms that will have to be sent out to owners, who will now have to give notice in writing setting out their name and identifying the unit, within 30 days of taking title.

Secondly, writes Conant, the PCOA amends the Act to require mandatory disclosure of certain information by directors and candidates running for the board as well as mandatory education/training of all directors after they are elected.

There are new rules related to meetings and voting, adds Conant.

“There will be new requirements for preliminary notices and notices of owners meeting. These hopefully will be in prescribed forms and are designed to give candidates and owners more information and advance notice of meetings, and include the information certificates and any director's disclosure statements,” he says.

The quorum threshold for certain meetings will also be lowered, he says, and there will be greater clarity about voting, a mandatory prescribed form of proxies, as well as mechanisms to reduce abuse.

Finally, there will be changes to the retention and access of a corporation’s records, which Conant says is an important issue, as the largest number of disputes arise in this area.

It is anticipated that this will be the first issue that the newly created Condominium Authority of Ontario's (CAO) dispute resolution mechanism and tribunal will deal with.

“The regulations will better define what are corporate records and stipulate minimum retention periods – from unlimited (for fundamental records), to the time when ballots and proxies can be destroyed. The industry is also being strongly encouraged to move from paper records to electronic, including electronic proxies,” he adds.

For access to records, says Conant, the regulations set out a new procedure and prescribed forms to deal with document requests, charging a fee, reply by the board and dispute resolution mechanisms.

Although these reforms are designed to reduce disputes, he says if they cannot be resolved then they will be dealt with in an expeditious and cost-effective manner through the CAO.

The CAO is a new self-run and self-financed non-government body that many hope will be certified as an "Administrative Authority" later this year, says Conant, allowing it to open its doors on a limited basis.

“The CAO will have three main functions: 1) public education and information about condos; 2) dispute resolution, which will be its biggest function; and 3) a database of information about every condominium corporation in Ontario,” he writes.

A large part of the CAO will deal with dispute resolution through a tribunal called the CAT.

“It is anticipated to include a very robust online dispute resolution tool (guided pathway to assist in education, facilitation and early resolution of the dispute), and if not resolved then adjudication. At the outset, it is planned that the CAT will deal with only s. 55 (records) disputes. This will allow the CAO to fine tune the CAT to make it as user-centric as possible,” says Conant.

The CAO will be funded primarily by a fee paid by owners, hoped to be in the range of one dollar per unit per month, he says.

“The CAO will invoice the corporation who will add it to their operating budget as a common expense. I strongly encourage all corporations to start budgeting for it now,” writes Conant.

Following explosive growth in Ontario’s condominium industry over the last two decades, legislative changes are on the way that will hopefully help protect consumers in a number of areas, Toronto condominium lawyer Armand Conant tells The Condominium Report with Joe Vero on AM 640.

Conant, partner and head of the condominium law group at Shibley Righton LLP, tells listeners that in the last 25 years, Ontario's condo industry has grown from a small number of condo corporations to over 10,000, with more than 1.5 million Ontarians living in condos.

As a result, he explains, disputes have become more complex, requiring further mechanisms to try to achieve a balance between individual unit owners versus the condo board and corporation as well as with the cost of dispute resolution.

Additional consumer protection for those buying condos is also needed, says Conant, in the form of adequate disclosure in the documents that are given to purchasers.

For example, there has been a trend in the last 15 years towards developers downloading certain costs to corporations, he says.

“No owner sees that when they’re buying, and all of a sudden the corporation is going to have to find $10 million to buy their own party room from the developer. It was disclosed, and that’s really where we see the shortcoming, where we’ve got to get better information to buyers so they understand what they’re buying — what is a condo, what does it mean to own a condo and live in a condo? — and go from there.”

As a result, Conant tells listeners, over the last number of years, various organizations have worked with the government to try to change Ontario’s condominium legislation, looking specifically at consumer protection, the condo authority, dispute resolution, financial management/governance, as well as licensing of managers.

“So that’s been working through the last eight years, and then about three years ago is when they stepped up and announced the formal reform to the Condo Act and the licensing of condo managers,” he says.

“The industry has been asking for years that there should be licensing, self-regulation of condo managers — they are highly trained professionals that are running a lot of the day-to-day operations of a condo corporation, handling large amounts of money, they are highly trained and should be deemed to be professionals and licensed,” Conant adds.

Under the new legislation, the Condominium Management Regulatory Authority of Ontario (CMRAO) will be responsible for licensing and regulating condominium managers and management companies.

Meanwhile, the Condominium Authority of Ontario (CAO) will provide public education, develop a mandatory course for members of condominium boards of directors on topics like governance and how to run a meeting, and maintain a database of all condos in Ontario.

But primarily, says Conant, who has been appointed a founding/first director of the CAO, the condo authority will administer a tribunal tasked with settling common disputes.

“We’re working on creating a very, very robust computerized online dispute resolution mechanism because once you’re in that dispute, we want you to get information, facilitation, try to resolve it before you get into a heated fight. But if you have to go into that fight, let’s get you through it cheaper, faster and better.”

Bill 106 — which encompasses the Protecting Condominium Owners Act, 2015 and the Condominium Management Services Act, 2015, received royal assent in December 2015 and the government is currently drafting the regulations.

“The regulations have become far more complicated than anticipated. What they’ve done this time is they’ve gone what we call ‘skeletal’ — lighter on the legislation, much heavier on regulation, because it’s easier to amend regulations. But because of that, it’s become so complicated that it's taking longer," he says.

Conant tells listeners that he hopes the government will be phasing in parts of the regulations, likely by the spring.

In certain matters, clients may benefit from a co-counsel setting where lawyers tackle different aspects of the case — but the success of these arrangements depends on mutual respect and compromise, Toronto lawyers Armand Conant, Bill Northcote and Joel Berkovitz tell Lawyers Weekly.

As an example, Conant, partner and head of the condominium law group at Shibley Righton LLP, points to a complicated condominium matter where it was clear that drawing in a small team of colleagues in a co-counsel setting to tackle different aspects of the job would be beneficial to the client.

“We needed their skill sets,” Conant says of the decision to bring in Northcote, chair of Shibley Righton’s business law practice group, and Berkovitz, an associate with the firm 

who practises business and condominium law.

“Bill and I would go to the strategy meetings with Joel and talk about how it would all work,” explains Conant. “Joel would then work on multiple agreements, drafting and redrafting them, and then we would review them.”

Northcote says the advantages to co-counsel arrangements extend beyond the sharing of work.

“Sometimes you involve other counsel because you want somebody who brings a fresh perspective,” he says, explaining the value of multiple fields of expertise.

Berkovitz agrees: “We see this a lot, particularly when it comes to corporate counsel and tax issues, where we defer to the advice of our tax specialists just because it’s an area they have so much experience in.”

At the same time, Conant, Northcote and Berkovitz say while co-counsel arrangements can prove beneficial, they require maintenance and consideration.

The three lawyers note they have never experienced serious conflict while working with each other.

“Armand and I haven’t had any conflict because you have to bring a spirit of respect and compromise,” says Northcote.

“But Joel may have experienced conflict thinking who are these guys and why am I working late when they’re sitting at home. But that’s partly a question of what roles people fulfil.”

Berkovitz notes that the stability of the co-counsel relationship indeed depends on each party recognizing their role and their place.

“As a junior you’re expected to be adaptable to your seniors rather than your seniors are expected to adaptable to you,” he explains.

“It’s a matter of you learning their working style, what they’re looking for and how they want to work with you. Do they want you to come back with questions all the time or do they want you to try to find a solution and only come back if necessary? Once you have that all down, then the working relationship is generally pretty smooth.”

Conant adds that senior co-counsel also need to respect junior team members.

“Joel might raise something he saw in another deal, where somebody did a slight twist on a transaction, and it might help on this point too. This kind of interaction, think-tanking and brainstorming is excellent.”

Although their efforts may not be visible to the public, the government is hard at work at drafting the regulations for Bill 106 — which encompasses the Protecting Condominium Owners Act, 2015 and the Condominium Management Services Act, 2015. It is hoped that the regulations will be in place by mid to late 2017, Toronto condominium lawyer Armand Conant says in CondoBusiness.

As CondoBusiness reports, the Protecting Condominium Owners Act, 2015 — passed late last year — is set to reform the existing Condominium Act and introduce the Condominium Management Services Act, 2015.

The existing Condominium Act, 1998 will remain in force until the new Act is proclaimed into force — before that happens, the government needs to finalize the accompanying regulations and establish two administrative authorities, says the article.

The Condominium Authority of Ontario (CAO) will provide public education, maintain a registry of the province’s 10,000 condominium corporations and administer a tribunal tasked with settling common disputes, primarily between condominium corporations and owners. The Condominium Management Regulatory Authority of Ontario (CMRAO) will be responsible for licensing and regulating condominium managers and management companies.

Conant, partner and head of the condominium law group at Shibley Righton LLP, has been appointed a founding/first director of the CAO and he also sat on the expert panel for the Condominium Act review.

He recently told attendees at the ACMO/CCI-T Condo Conference in Toronto that the regulations will spell out the many “prescribed requirements” referenced in the legislation, which is designed to make future reforms easier, CondoBusiness reports.

“We hope — we don’t have any guarantees, but we’re all working very hard — that the regs will be coming out over the next number of months for our review,” said Conant.

“All stakeholders, everybody in the industry, will be invited to participate, and if everything works well, it will be law by hopefully the end of the summer or fall of 2017,” he added.

As CondoBusiness reports, Conant also told attendees that it is hoped there will be a phasing in of some aspects of the legislation and regulations and thus parts of the new legislation become law earlier.

Conant noted that the CAO’s dispute resolution services could include a comprehensive online tool, similar to systems in jurisdictions such as B.C.

Interested parties should watch for the release of the regulations, he said, as well as the launch of the CAO and CMRAO websites.

Co-counsel arrangements are common in many areas of practice, from criminal trials and litigation, where there’s significant court work, to complicated paper-laden negotiations.

But can too many hands on deck sink the ship? Insiders who have worked collaboratively with other lawyers recommend respecting boundaries, working as a team and striving for harmony all while focusing on the needs of the client.

Armand Conant, a partner at Shibley Righton in Toronto, recalls a complicated condominium matter where it was clear that client interest would benefit from drawing in a small team of colleagues in a co-counsel setting to tackle different aspects of the job

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