Government Has No Excuse for Delaying Consumer Protection Sections of New Condominium Act

Bob Aaron in Condo Buying, Legal

Tall Buidlings

With parts of the new Condominium Act coming into force next week, there is concern about important consumer protection sections in the act that have been delayed.

The amendments to the Condominium Act, 1998 were enacted in December 2015, by the passage of Bill 106, the Condominium Management Services Act, 2015. Although the legislation has received Royal assent, the amendments do not come into effect until they receive section-by-section proclamation by the Lieutenant-Governor.

Some of the amendments have already been proclaimed — many of them take effect on Nov. 1, and others are scheduled to become law on Jan. 1, 2018.

But there is no timetable for proclamation of many important consumer protection parts of the new law.

Audrey Loeb, condominium law expert and an author of two books on the Condominium Act, is among the critics of the delay to enact the protections for buyers of newly-built condominiums.

“I don’t understand,” Loeb says, “what the government’s excuse is for not proclaiming these sections on Nov. 1.”

Some of the consumer protection sections not yet in force:

  • A prohibition against buyers being required to share in the cost of purchasing units intended for the collective use of all owners, such as guest suites, superintendent suites and green energy facilities.
  • A prohibition against purchasers being required to contribute lump sums to the reserve fund at the time of purchase.
  • A prohibition against purchasers being required to compensate the builder for any lawsuits against, brought by the condominium corporation — an effective bar to suing the builder.
  • A new duty on builders to take all reasonable steps to register a condominium declaration without delay, and a prohibition against terminating a purchase agreement due to the failure to register the declaration.
  • A requirement that any money paid to reserve a right to enter into a purchase agreement must be credited against the purchase price.
  • A new provision that within one year of the builder turning over control of the building to a member-elected board, the condominium owners can terminate an insurance trust agreement — or any agreement entered into by the builder — that provides for the continual delivery of goods, services or facilities, or a lease of the common elements. This applies even if the builder has signed an agreement which would otherwise bind the condominium owners. In the event of termination, there would be no liability on the corporation, the directors, officers or owners for any penalties set out in the agreement.

This provision would cover, for example, a contract for the long-term lease of geothermal equipment or the supply of telephone, cable TV or internet services to the building.

There is also a new provision that the corporation may sell the building, land and all the units if 80 per cent of the unit owners vote in favour of the sale.

But the government simply has no excuse for delaying implementation of these very important consumer protections.

Bob Aaron is Toronto real estate lawyer. His Title Page column appears on this blog, Move Smartly, and in The Toronto Star. You can follow Bob on Twitter @bobaaron2 and at his website Email Bob

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