Concerns re Proposed Condo Act Amendments – Concern #3
As mentioned in previous posts, Bill 106: Protecting Condominium Owners Act was introduced in the Ontario Legislature on May 27, and the full text of the bill is now available here.
Many of the proposed amendments to the Condominium Act, 1998 (“the Act”) look very good to me. However, I do have some concerns. This is my blog post on Concern #3.
Concern #3 – Additions to Owners’ Common Expenses
Currently, the Act does not clearly regulate or control the rights of condominium corporations to add amounts to an owner’s common expenses. There are exceptions, however. For instance, Section 92 of the Act deals with the corporation’s rights to add certain maintenance and repair costs to an owner’s common expenses; and Section 105 of the Act deals with a corporation’s rights to add losses falling within the deductible on the corporation’s insurance policy to an owner’s common expenses. Also, Section 134 of the Act deals with a corporation’s rights to add certain Court-awarded (and related) costs to an owner’s common expenses. But the rights of a corporation in relation to other costs or liabilities caused by an owner or by the owner’s occupants, guests or agents is not absolutely clear.
Many declarations, by-laws or rules contain “indemnification” provisions. These usually state that an owner is responsible for any claims or expenses suffered or incurred by the condominium corporation if those claims or expenses are not covered by the corporation’s insurance, and if those claims or expenses have been negligently caused by the owner or by the owner’s occupant, guest or agent. These provisions also often say that the amounts owed by the owner can be added to the owner’s common expenses.
The proposed amendments to the Act include new provisions whereby a condominium corporation would be required to give the owner notice of any such additional amount or “chargeback” to be added to the owner’s common expenses. And the owner would then have an opportunity to challenge that proposed chargeback, by way of application to the proposed Condominium Authority Tribunal.
The proposed amendments to the Act also include a provision stating that the declaration may contain:
“a statement specifying the common expenses of the corporation and the circumstances that may result in the addition of any amount to the contribution to the common expenses payable for the owner’s unit to indemnify or compensate the corporation for,
- an actual loss, as is prescribed, that the corporation has incurred in the performance of the corporation’s objects and duties, or
- any other purpose, if any, that is prescribed.”
This appears to be saying that such indemnification provisions must be contained in the declaration, in order to allow for such amounts to be added to the owner’s common expenses.
Here’s my concern. It seems to me that the Act should contain the standard indemnification provision. Every condominium owner in Ontario should, in my view, bear responsibility for any claims and expenses suffered or incurred by the condominium corporation (i.e. by all of the owners collectively) as a result of an act or omission of the owner or an occupant, guest or agent of the unit (unless covered by the corporation’s insurance). I don’t see why this needs to be in the declaration. In any case, the owner will have the new challenge rights noted above. Again, I don’t see why an indemnification right, as described above, shouldn’t be standard for all condominiums in Ontario.