Bill 106 has received Third Reading. What Now?

Now that Bill 106 has been passed and received Royal Assent, many of our readers may be wondering: “What now?”. To start with, condominium corporations and managers may wish to begin planning for the arrival of the new legislation.

Here’s my list of some of the key considerations.

I. Further detail still to come in the regulations

The regulations will arrive and the legislation will be proclaimed in force likely within 12 to 24 months. Much of the important detail will be contained in the regulations, so these will of course require careful scrutiny when they arrive. Some of the key details to be contained in the regulations are as follows:

• Provisions respecting permitted reserve fund expenditures, reserve fund studies and the adequacy of reserve funds
• The types of disputes that fall within the jurisdiction of the new Condominium Authority Tribunal
• Mediation and Arbitration procedures
• Directors’ training and disclosure obligations
• Details of the licensing requirements for managers
• New proxy and status certificate forms
• New requirements respecting record-keeping and owners’ access to records.

II. Condominium insurance deductibles and standard unit descriptions

The new legislation will eliminate insurance deductibles by-laws. Such provisions will only be valid if added to the declaration, with consents from owners of 90% of the units. This will place added pressure upon condominium corporations when it comes to insured damage. To relieve some of that pressure, many condominium corporations (and their owners) may wish to consider new standard unit by-laws, in order to remove certain “high risk” features from their standard unit descriptions. Those features would then be treated as “unit improvements”, covered by the owner’s insurance.

III. Management costs and management contracts

The new legislation will mean new licensing fees for condominium managers, and will likely also mean added work for condominium managers. To give just a few examples:

• The legislation contains enhanced requirements for notices to owners
• There will be new provincial reporting requirements for condominium corporations
• Contract procurement processes (tendering) will be mandatory for many types of contracts
• Managers might be expected to handle some sorts of disputes, such as applications to the new Condominium Authority Tribunal.

This may well mean higher management fees. Therefore, I recommend that condominium managers and boards now check their management contracts and discuss whether or not the manager will have the right to charge added fees or extras for this added work and expense, when the new legislation comes into force.

IV. Declaration amendments

Condominium corporations may wish to start considering possible amendments to their declarations for the following reasons:

• The new legislation contains a revised definition of “repair”, which may alter previously understood repair and maintenance obligations in some condominiums
• The new legislation appears to say that a chargeback can only be added to an owner’s common expenses if the declaration contains a clear provision for such. Condominium corporations may wish to add such a provision to their declarations, if they don’t now contain one
• As described above, condominium corporations may wish to add a provision respecting insurance deductibles to their declarations.

V. By-law amendments

Condominium corporations may wish to start considering possible amendments to their by-laws for the following reasons:

• The new legislation says that a condominium corporation can enter a unit without notice in an emergency only if there is a provision allowing for such in the corporation’s declaration or by-laws. But not all condominium declarations or by-laws contain such a provision!
• The new legislation says that new provisions for voting by “telephonic or electronic means” may be added to the by-laws
• As noted above, condominium corporations may wish to consider amending their standard unit descriptions, by passing new or revised standard unit by-laws.

VI. Directors’ disclosure and training

All condominium directors will have to comply with the new training and disclosure requirements to be contained in the regulations.

VII. New forms of proxy and status certificates

Some condominium forms will need to be updated – including new prescribed forms for status certificates and proxies.

VIII. Non-leased voting units

Condominium corporations will need to determine whether or not the revised provisions respecting “non-leased voting units” apply to them.

IX. Owner chargebacks

Condominium corporations will want to consider their rights of collection against any owner who causes the condominium corporation to incur costs. Factors to consider include:

• Does the Act or the declaration contain a provision allowing for the chargeback to be added to the owner’s common expenses?
• Condominium corporations will need a sound procedure in place (for collection of chargebacks) that meets the new “chargeback collection procedures” in Section 84 (3) of the amended Condominium Act
• In some cases, condominium corporations may wish to consider other methods of collection – such as a claim in Small Claims Court or an Application to Superior Court.

X. Dispute procedures

For any given dispute, condominium corporations will need to consider:

• Is this dispute subject to mandatory mediation and arbitration?
• Does the Condominium Authority Tribunal have jurisdiction over this dispute?
• Can this dispute be taken to Court?
• What is the applicable limitation period for commencement of the dispute process?

XI. Record of owners and mortgagees

The new legislation contains revised provisions respecting the corporation’s record of owners and mortgagees, and respecting notices of meeting. Condominium boards and managers will want to be ready to call meetings in compliance with these revised provisions.

XII. Licensed manager

Finally, when the new legislation arrives, condominium corporations will of course need to verify that their manager (if they have one) is licensed as required by the new Condominium Management Services Act, 2015.

Final note

The legislation also contains many new requirements for condominium declarants, and relating to newly-declared condominiums. This report does not deal with those requirements. Look for our upcoming blogs on those topics!

Also, for more commentary on Bill 106, check out our previous posts.