Is Your Self-Managed Condominium Corporation Exempt From the New Licensing Requirements Under the Condominium Management Services Act?

We will be publishing some blogs to address some of the pertinent issues that may affect self-managed Condominium Corporations under the new Condominium Management Services Act, when it comes into effect. This Blog discusses how self-managed Corporations may be exempted from the licensing requirements.

Condominium Corporations that are ‘self-managed’ are Corporations that have decided not to enlist the services of a paid property management company. Rather, the Corporation (typically the Board of Directors) performs the work associated with the day to day operations of the Condominium.

The new Condominium Management Services Act, 2015 (CMSA) makes obtaining and holding a Management License a requirement for anyone performing ‘Condominium Management Services’. The question is, how will this new requirement affect ‘self-managed’ Corporations, and the individuals at these Corporations, who perform the management duties?

Under the CMSA, someone who provides any of the following services, to or on behalf of a Condominium Corporation, is performing “Condominium Management Services”:

(1) Collecting or holding contributions to the common expenses or other amounts levied by, or payable to, the corporation.

(2) Exercising delegated powers and duties of the corporation or its board of directors, including,

   (i) making payments to third parties on behalf of the corporation,

   (ii) negotiating or entering into contracts on behalf of the corporation, or

   (iii) supervising employees or contractors hired or engaged by the corporation, but does not include an activity excluded by the regulations;

The CMSA states (Section 34.1) that no person shall provide Condominium Management Services unless they are licensed as a condominium management provider or as a condominium manager. However, there are exemptions to this requirement.

Section 35 states, “Despite Section 34, a licence shall not be required in respect of the provision of condominium management services by the persons or in the circumstances that are prescribed”. Therefore, under some circumstances, an individual may be able to perform Condominium Management Services and not have to be licensed.

The draft Regulations under the CMSA prescribe a list of exemptions to the licensing requirements. For the purpose of this blog, we highlight the exemption that relates to directors.

Exemption for Directors

For the purposes of section 35 of the CMSA, persons are not required to hold a licence if they are a director and are not remunerated (or don’t expect to be remunerated) for providing Condominium Management Services, as follows:

A person who is elected or appointed as a director of a condominium corporation under the Condominium Act, 1998, including a director who receives compensation pursuant to a by-law made under clause 56 (1) (a) of that Act, unless the person is providing condominium management services for compensation or reward or the expectation of such.

Therefore, the answer to whether or not a self-managed Corporation must have a licensed person performing Condominium Management Services, depends on whether the Condominium Management Services are being provided by a director or another individual and, if it is a director, whether or not there is compensation, reward, or the expectation of such, in the provision of those services.

Stay tuned for our next blog, which will discuss the meaning of “compensation or reward, or the expectation of such” and provide suggestions on how a self-managed Condominium Corporation may be able to take steps to avoid coming within the scope of the licensing requirements.