Effective June 16, 2014 a number of changes are going to be made to the Condominium Property Regulations, and a number of existing changes to the Condominium Property Act are going to be proclaimed, and put into effect. The amendments have not yet made their way onto the Queen's Printer website, but should be shortly.
The effect of these changes are going to be significant. The province has been categorizing them in four different categories, and I will do the same: (1) insurance, (2) condominium conversions, (3)dispute resolution and (4) consumer protection. This summary is intended for a very broad overview, and individuals and businesses should consult with their lawyer to deal with their specific circumstances before implementing any changes.
(1) Insurance - There is now added requirements for directors and officers insurance for condominiums, and mandatory building insurance for multifamily residential developments in bare land developments. Before, bare land condos could determine whether or not they would obtain insurance as a corporation.
Condos will also be able to use a "standard unit" description. A number of these standard unit descriptions were in place already, but now they are contemplated by legislation. The standard unit is to provide some clarity on insurance obligations between unit owner and corporation.
(2) Condo Conversions - After hearing of a number of complaints about the way condo conversions were sold, it is nice to see some additional regulatory requirements for them. It includes things like mandatory reserve fund study as part of the disclosure package. There is also a restriction on the ability to convert existing rental properties unless the vacancy rate exceeds 2.5%.
(3) Dispute Resolution - The Act specified some "new" remedies with the changes that were passed last year. This includes applications to deal with oppressive conduct, or to compel and condominium corporation to perform their duties.
(4) Consumer Protection - With new developments, developers will need to provide a bond to cover incomplete common property. The amount of this bond, and the situations in which it is applicable have changed. There is also an expanded disclosure list in both the developer requirements and the estoppel form.
There are some changes that will not go into effect until April 1, 2015. These changes include the requirement to file a corporate return, to have audited financials (with some ability to avoid or downgrade the review based on size of condo and # of units), and to update their reserve fund study every five years instead of every ten years.
Some special notes:
Changes to the definition of "special resolution" - makes it clear that you need 2/3rds of all owners, and not just those who show up at an AGM. Important for major governance changes for corporations.
Interest on Condo Fee Arrears - Maximum of 23% per annum
- Estoppel form - has been revised SIGNIFICANTLY. Condominium Corporations should update their disclosure documents asap.
- The ability to make bylaws to manage part of a "unit" - this is huge for bare land condominiums. Bare land condominiums that are collecting for improvements in units (like joint roofs) should look at these sections closely.