Bill 72, Property Owners' Protection Act, 2012

Versions

Bill 72 2012

An Act to amend the Condominium Act, 1998 and other Acts to increase protection for property owners

Note: This Act amends or repeals more than one Act. For the legislative history of these Acts, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Condominium Act, 1998

1. Subsection 1 (1) of the Condominium Act, 1998 is amended by adding the following definition:

"review board" means the review board designated under Part XIII.1; ("commission de révision")

2. Subsections 7 (2), (3), (4) and (5) of the Act are repealed and the following substituted:

Standard declaration

(2) A declaration shall contain the materials, information, consents and standard provisions set out in the regulations.

3. (1) Subsection 29 (1) of the Act is amended by striking out "or" at the end of clause (b), by adding "or" at the end of clause (c) and by adding the following clause:

(d) the person has an affiliation with a declarant that would undermine the person's ability to act honestly and in good faith in discharging his or her duties as a director.

(2) Subsection 29 (2) of the Act is amended by striking out "or" at the end of clause (a), by adding "or" at the end of clause (b) and by adding the following clause:

(c) the review board determines that the person has an affiliation with a declarant that would undermine the person's ability to act honestly and in good faith in discharging his or her duties as a director.

4. (1) Section 43 of the Act is amended by adding the following subsection:

Material for filing

(3.1) Before the meeting held under subsection (1) and on or before the date specified in the regulations, the declarant shall deliver to the review board the material set out in clauses (5) (b) to (f) for the purpose of obtaining advice from the review board with respect to the contents of the material.

(2) Subsection 43 (8) of the Act is amended by striking out "the Superior Court of Justice" and substituting "the review board".

(3) Subsection 43 (9) of the Act is amended by striking out the portion before clause (a) and substituting the following:

Review board order

(9) The review board, if satisfied that the declarant has, without reasonable excuse, failed to comply with subsection (4), (5) or (7),

. . . . .

5. Subsections 51 (2) and (3) of the Act are repealed and the following substituted:

One vote per owner

(2) Subject to subsection (3), all voting by owners shall be on the basis of one vote per owner.

More than one owner

(3) If there are two or more owners of a unit, only one of the owners is entitled to vote at a meeting.

6. Section 52 of the Act is amended by adding the following subsection:

False or misleading statements

(8) No person shall, in a statement or in information provided in respect of the appointment of a proxy, make a material statement or provide material information that is false, deceptive or misleading.

7. Clause 56 (1) (o) of the Act is amended by striking out "or 132".

8. Subsection 60 (3) of the Act is repealed and the following substituted:

Appointment by review board

(3) If for any reason no auditor is appointed as required by this section, the review board may, on the application of an owner,

(a) appoint one or more persons qualified to be auditors to hold office as auditors until the close of the next annual general meeting;

(b) fix the remuneration that the corporation shall pay for the services of the auditor who is appointed; and

9. (1) Clause 72 (3) (k) of the Act is repealed and the following substituted:

(k) if construction of amenities is not completed, a schedule of the proposed commencement and completion dates, which completion dates shall be no later than six months following the date upon which the disclosure statement is made;

(2) Subsection 72 (3) of the Act is amended by adding the following clause:

(n.1) a statement of how the declarant plans for the property to be managed, including the nature of the relationship between,

(i) the declarant and the person with whom the declarant intends to enter into an agreement for the management of the property, and

(ii) if the person mentioned in subclause (i) is incorporated as a corporation, the declarant and any individuals to be employed by that person to act as a manager.

(3) Section 72 of the Act is amended by adding the following subsection:

Fees to be set out separately

(3.1) For the purposes of complying with clause (3) (s), the statement setting out fees or charges must specify each fee or charge separately.

(4) Subsection 72 (6) of the Act is amended by striking out "the one-year period" in the portion before clause (a) and substituting "the three-year period".

(5) Clause 72 (6) (b) of the Act is repealed and the following substituted:

(b) a statement of the proposed amount of each expense of the corporation during the period, including the cost of reserve fund studies, the cost of the performance audit under section 44 and the cost of preparing audited financial statements if any were required to be delivered within the period;

(6) Clause 72 (6) (i) of the Act is amended by striking out "the current fiscal year" at the end and substituting "the period".

10. The Act is amended by adding the following section:

Transfer of unit, prohibition

72.1 (1) No declarant shall transfer a unit for occupation for residential purposes unless the unit and the common elements mentioned in subsection (2) have been constructed to meet, at a minimum, the prescribed standards.

Same

(2) Subsection (1) applies in respect of the following common elements:

1. Hallways, stairs and lobbies.

2. Underground garages.

3. Elevating devices.

4. Any other prescribed common elements.

11. Subsection 75 (1) of the Act is amended by striking out "the one-year period" and substituting "the three-year period".

12. Clause 76 (1) (r) of the Act is amended by striking out "the Superior Court of Justice" and substituting "the review board".

13. The Act is amended by adding the following Part:

Part V.1
Qualifications of Property Managers

Prohibition

83.1 (1) No person shall act under an agreement for the management of a property owned by a condominium corporation unless the person has the prescribed qualifications or, if the person is incorporated as a corporation, an individual employed by that person to act as the manager has the prescribed qualifications.

Same

(2) For the purposes of subsection (1), management of a property includes management of the following:

1. Financial matters.

2. Maintenance, repairs and improvements.

3. Enforcement of and compliance with the declaration, by-laws, rules and applicable legislation.

4. Other prescribed matters.

14. (1) Subsection 93 (2) of the Act is repealed and the following substituted:

Purpose of fund

(2) A reserve fund shall be used only for the following purposes:

1. Major repair and replacement of the common elements and assets of the corporation.

2. Repair and replacement of common elements following reasonable wear and tear.

3. Installation of renewable energy technologies and other prescribed energy efficient technologies.

(2) The English version of subsection 93 (3) of the Act is amended by striking out "purpose" and substituting "purposes".

(3) Subsection 93 (6) of the Act is repealed and the following substituted:

Same, after first reserve fund study

(6) Subject to the regulations, the total amount of the contributions to the reserve fund after the time period specified in subsection (5) shall be the amount that, in the opinion of the corporation, is reasonably expected to provide sufficient funds for achieving purposes mentioned in subsection (2).

15. Subsection 94 (1) of the Act is repealed and the following substituted:

Reserve fund study

(1) The corporation shall conduct periodic studies to determine whether the amount of money in the reserve fund and the amount of contributions collected by the corporation are adequate to provide for the expected costs, as estimated by the corporation, of achieving the purposes mentioned in subsection 93 (2).

16. The English version of subsection 95 (1) of the Act is amended by striking out "purpose" and substituting "purposes".

17. Subsection 97 (1) of the Act is repealed and the following substituted:

Changes made by corporation

(1) Work shall be deemed not to be an addition, alteration or improvement to the common elements or a change in the assets of the corporation for the purpose of this section if one of the following circumstances applies:

1. The corporation has an obligation to repair the units or common elements after damage or to maintain them and the corporation carries out the obligation using materials that are as reasonably close in quality to the original as is appropriate in accordance with current construction standards.

2. The corporation is carrying out the work for the purpose of the installation of renewable energy technologies or other prescribed energy efficient technologies.

18. Clause 107 (2) (d) of the Act is amended by striking out "in a matter described in clause 7 (2) (c), (d) or (f) or 7 (4) (e)" at the end and substituting "in material, information or consents required under a regulation mentioned in subsection 7 (2)".

19. (1) Subsection 109 (1) of the Act is repealed and the following substituted:

Review board order

(1) The corporation or an owner may make an application to the review board for an order to amend the declaration or description.

(2) Subsection 109 (3) of the Act is amended by striking out "court" and substituting "review board".

20. Subsection 125 (2) of the Act is repealed.

21. (1) Subsections 128 (1) and (2) of the Act are repealed and the following substituted:

Termination by review board

(1) A corporation, an owner, or a person having an encumbrance against a unit and common interest, may make an application to the review board for an order terminating the government of the property by this Act.

Grounds for order

(2) The review board may order that the government of the property by this Act be terminated if the review board is of the opinion that the termination would be just and equitable, having regard to,

(a) the scheme and intent of this Act;

(b) the probability of unfairness to the owners if the review board does not order termination;

(c) the probability of confusion and uncertainty in the affairs of the corporation or of the owners if the review board does not order termination; and

(d) the best interests of the owners.

(2) Subsection 128 (3) of the Act is amended by striking out "court" and substituting "review board".

(3) Subsection 128 (4) of the Act is amended by striking out "court" and substituting "review board".

22. (1) Subsection 130 (1) of the Act is amended by striking out "Superior Court of Justice" in the portion before clause (a) and substituting "review board".

(2) Subsection 130 (2) of the Act is amended by striking out "court" and substituting "review board".

(3) Subsection 130 (4) of the Act is repealed and the following substituted:

Contents of order

(4) In the order, the review board,

(a) shall require the inspector to make a written report within a specified time to the applicant for the order and to the corporation on the activities that the order requires the inspector to perform; and

(b) may make an order as to the costs of the investigation or audit or any other matter as it deems proper.

23. (1) Subsection 131 (1) of the Act is amended by striking out "Superior Court of Justice" and substituting "review board".

(2) Subsection 131 (2) of the Act is repealed and the following substituted:

Grounds for order

(2) The review board may make the order if the review board is of the opinion that it would be just or convenient, having regard to the scheme and intent of this Act and the best interests of the owners.

(3) Clause 131 (3) (c) of the Act is amended by striking out "court" and substituting "review board".

(4) Subsection 131 (4) of the Act is amended by striking out "court" wherever it appears and substituting in each case "review board".

24. Section 132 of the Act is repealed.

25. Section 133 of the Act is amended by adding the following subsection:

Deemed reliance on misrepresentation

(3) An owner who makes an application under subsection (2) is deemed to have relied on any false, deceptive or misleading material statement or material information that the declarant provided under this Act, unless it is proven that the owner purchased the unit with the knowledge that the material statement or material information is false, deceptive or misleading.

26. (1) Subsection 134 (1) of the Act is amended by striking out "Subject to subsection (2)" at the beginning.

(2) Subsection 134 (2) of the Act is repealed.

27. Subsection 137 (1) of the Act is amended by striking out "55 (1) or 72 (1), section 81, subsection" in the portion before clause (a) and substituting "52 (8), 55 (1), 71 (1) or 72.1 (1), section 81, subsection 83.1 (1)".

28. Subsection 168 (4) of the Act is repealed.

29. (1) The Act is amended by adding the following Part:

PART Xiii.1
REVIEW BOARd

Review board designated

175.1 (1) The Lieutenant Governor in Council shall, by regulation, designate a non-profit corporation incorporated without share capital under the Corporations Act to be the review board for the purposes of this Act.

Objects

(2) In addition to any other objects specified in the review board's governing documents, the objects of the review board include,

(a) appointing panels in accordance with the regulations to perform the functions described in subsection 175.5 (1);

(b) advising and assisting the public in matters relating to corporations;

(c) disseminating information for the purpose of educating and advising corporations and owners concerning the financial, operating and management practices of corporations;

(d) providing training with respect to matters specified in the regulations to those directors of boards who do not receive remuneration in their capacity as directors; and

(e) assisting in the formulation and conduct of educational courses for members of boards of corporations.

Advice to declarants

(3) The review board shall, upon receipt of material delivered to it by a declarant under subsection 43 (3.1), advise the declarant in respect to the contents of the material.

Not a Crown agency

(4) The review board is not an agent of Her Majesty nor a Crown agent for the purposes of the Crown Agency Act.

Board of directors, qualifications

175.2 (1) A person shall be a director of the review board only if the person has demonstrable experience and knowledge of homeowner advocacy and consumer protection issues.

Disqualification

(2) A person shall not be a director of the review board if the person has an affiliation with a declarant that would undermine the person's ability to act honestly and in good faith in discharging his or her duties as a director.

By-laws, owner representation

175.3 The by-laws of the review board shall provide for representation of owners on the board of directors.

Review officers

175.4 The review board shall appoint review officers who shall, under the supervision of the review board,

(a) perform the duties and exercise the powers given to them by the regulations; and

(b) perform such other duties as are assigned to them by the review board.

Panel

175.5 (1) A panel appointed by the review board shall,

(a) mediate or arbitrate in respect of matters in respect of which an application has been made to the review board under subsections 43 (8), 109 (1), 128 (1), 130 (1) and 131 (1) or under a provision of the regulations that has been prescribed for the purposes of this clause;

(b) make determinations under clause 29 (2) (c) or under a provision of the regulations that has been prescribed for the purposes of this clause, if the opinion of the review board is requested by a prescribed person; and

(c) perform the functions assigned to the review board under subsection 60 (3) and such other functions as may be prescribed.

Practices and procedures

(2) A panel may specify its own practices and procedures.

Orders of panel

(3) A panel may make such orders as are authorized under this Act and the regulations.

Order final, binding

(4) An order of a panel is final and binding, except as otherwise provided under this Act.

Order may be enforced as judgment of court

(5) An order of a panel may be filed with the Superior Court of Justice and enforced as if it were an order of the court.

Appeal rights

175.6 (1) Any person affected by an order of a panel appointed by the review board may appeal the order to the Divisional Court within 30 days after being given the order, but only on a question of law.

Powers of Court

(2) If an appeal is brought under this section, the Divisional Court shall hear and determine the appeal and may,

(a) affirm, rescind, amend or replace the decision or order; or

(b) remit the matter to the panel with the opinion of the Divisional Court.

Same

(3) The Divisional Court may also make any other order in relation to the matter that it considers proper and may make any order with respect to costs that it considers proper.

Deposit by declarant

175.7 Upon the registration of the declaration and description, a declarant shall deposit 0.5 per cent of the value of the entire property, determined in accordance with the regulations, with the review board, and the review board shall,

(a) subject to the regulations, transfer all or part of the deposit to the condominium corporation for the purposes of addressing issues and deficiencies identified in a performance audit under section 44; and

(b) return the remaining deposit, if any, to the declarant, once the review board is satisfied that all issues and deficiencies identified in the performance audit under section 44 have been addressed.

Annual report

175.8 The review board shall submit an annual report on its affairs to the Minister, who shall submit the report to the Lieutenant Governor in Council and shall then lay the report before the Assembly.

(2) Subsection 175.1 (1) of the Act, as enacted by subsection (1), is repealed and the following substituted:

Review board designated

(1) The Lieutenant Governor in Council shall designate a corporation incorporated under the Not-for-Profit Corporations Act, 2010 or non-profit corporation incorporated without share capital under a predecessor of that Act to be the review board for the purposes of this Act.

30. Section 176 of the Act is amended by adding the following subsection:

No derogation of other rights

(2) The rights conferred by this Act are in addition to and do not derogate from any other right or remedy an owner or purchaser may have at law.

31. The Act is amended by adding the following section:

Fair dealing

176.1 (1) A duty of fair dealing is imposed on,

(a) every declarant in its dealings with a corporation, owner or purchaser; and

(b) every corporation in its dealings with an owner or purchaser.

Right of action

(2) A corporation, owner or purchaser has a right of action for damages against a person who breaches the duty of fair dealing.

Interpretation

(3) For the purpose of this section, the duty of fair dealing includes the duty to act in good faith and in accordance with reasonable commercial standards.

32. Subsection 177 (1) of the Act is amended by adding the following paragraphs:

24.1 prescribing the qualifications that a person must have for the purposes of subsection 83.1 (1), including requiring the person to hold a licence issued by the Ministry of Consumer Services, governing the issuance, renewal, suspension and revocation of those licences, providing for and governing appeals related to the issuance, renewal, suspension and revocation of those licences, and requiring the payment of fees established by the Minister or a person specified by the regulations in connection with those licences;

24.2 providing for matters to be dealt with by the review board and governing applications to the review board in respect of those matters;

24.3 providing for transitional matters which, in the opinion of the Lieutenant Governor in Council, are necessary or desirable in connection with the implementation of the amendments to this Act made by the Property Owners' Protection Act, 2012, including the application of regulations made for the purposes of subsection 7 (2) of this Act to declarations registered on or before the day section 2 of the Property Owners' Protection Act, 2012 comes into force;

Ontario New Home Warranties Plan Act

33. (1) Clause (c) of the definition of "home" in section 1 of the Ontario New Home Warranties Plan Act is repealed and the following substituted:

(2) Section 1 of the Act is amended by adding the following subsection:

Associated person

(2) For the purposes of section 3.1 and subsection 7 (4), one person is associated with another person if the persons are related to one another in the prescribed manner.

34. (1) Subsection 2 (2) of the Act is amended by adding the following clause:

(0.a) serving as a consumer protection agency;

(2) Section 2 of the Act is amended by adding the following subsection:

Board of directors

(2.1) The composition of the board of directors of the Corporation shall be in accordance with the following:

1. At least half of the directors shall have demonstrable experience in consumer protection and advocacy.

2. At least two of the directors shall have demonstrable experience in representing homeowners, which experience shall include experience representing owners of condominium dwelling units.

3. One director shall represent builders.

35. The Act is amended by adding the following section:

Publication by Registrar

3.1 The Registrar shall publish a directory of all builders of homes described in clause (c) of the definition of "home" in section 1 who are registered under this Act on a website on the Internet that provides the following information:

1. All previous business names used by each builder and each associated builder within the preceding 10 years.

2. Any information that the Registrar considers to be in the public interest.

3. Any other prescribed information.

36. Section 7 of the Act is amended by adding the following subsection:

Disclosure of business names

(4) For the purposes of enabling a determination to be made under clauses (1) (b) and (c), an applicant who seeks to be registered as a builder or a registrant who seeks to have a registration as a builder renewed shall provide to the Registrar in writing a list of all names under which the applicant or registrant and any associated builders have conducted business as a builder in the 10 years preceding the application for registration or renewal.

37. (1) Subsection 13 (4) of the Act is amended by adding at the beginning "Subject to subsection (4.1)".

(2) Section 13 of the Act is amended by adding the following subsections:

Same, condominium dwelling unit

(4.1) In the case of a condominium dwelling unit, a warranty under subsection (1) applies in respect of claims made within five years after the warranty takes effect if the claim is for any of the following reasons:

1. The home is not constructed in a workmanlike manner.

2. There are defects in windows, doors and caulking and other material, such that the building envelope of the home does not prevent water penetration.

3. There are defects in the work in respect of material mentioned in paragraph 2.

4. There are defects in material and work in respect of,

i. electrical, plumbing and heating delivery and distribution systems, or

ii. exterior cladding of the home resulting in detachment, displacement or physical deterioration.

5. There are violations of the Ontario Building Code under which the building permit was issued, affecting health and safety, including but not limited to fire safety, insulation, air and vapour barriers, ventilation, heating and structural adequacy.

6. There are major structural defects.

Same

(4.2) In subsection (4.1),

"building envelope" means the wall and roof assemblies that contain the building space, and includes all those elements of the assembly that contribute to the separation of the outdoor and indoor environments so that the indoor environment can be controlled within acceptable limits; ("enveloppe")

"delivery and distribution systems" include all wires, conduits, pipes, junctions, switches, receptacles and seals, but does not include appliances, fittings and fixtures; ("réseaux de distribution")

"exterior cladding" means all exterior wall coverings and includes siding and above-grade masonry as required and detailed in the relevant sections of the Ontario Building Code under which the building permit was issued. ("habillage extérieur")

38. Clause 15 (a) of the Act is amended by adding "or a corporation for a conversion condominium" after "a condominium corporation".

39. Section 17 of the Act is amended by adding the following subsection:

Time

(3.1) The corporation shall complete its efforts to effect conciliation within the prescribed time.

40. Subsection 23 (1) of the Act is amended by adding the following clause:

(0.a) defining "conversion condominium" for the purposes of this Act;

Building Code Act, 1992

41. The Building Code Act, 1992 is amended by adding the following section:

Review and report on noise protection standards, condominiums

34.0.1 (1) Within 12 months after the day section 41 of the Property Owners' Protection Act, 2012 comes into force, the Minister shall,

(a) ensure that a review is conducted and a written report is prepared in respect of noise protection standards for properties owned by condominium corporations, for the purpose of improving occupants' quiet enjoyment of the properties; and

(b) submit the report to the Lieutenant Governor in Council.

Report to be tabled

(2) The Lieutenant Governor in Council shall cause the report to be laid before the Assembly.

Commencement and Short Title

Commencement

42. (1) Subject to subsection (2), this Act comes into force six months after the day it receives Royal Assent.

(2) Subsection 29 (2) comes into force on the later of the day subsection 4 (1) of the Not-for-Profit Corporations Act, 2010 comes into force and the day subsection 29 (1) of this Act comes into force.

Short title

43. The short title of this Act is the Property Owners' Protection Act, 2012.

EXPLANATORY NOTE

The Bill amends the Condominium Act, 1998, the Ontario New Home Warranties Plan Act and the Building Code Act, 1992.

The amendments to the Condominium Act, 1998 include the following:

1. Every declaration registered under the Act is required to contain the materials, information, consents and standard provisions set out in the regulations. (See section 2 of the Bill.)

2. The qualifications and grounds for disqualification of directors of a condominium corporation are expanded with respect to affiliations between directors and declarants. (See section 3 of the Bill.)

3. All voting by owners is on the basis of one vote per owner, rather than on the basis of one vote per unit. (See section 5 of the Bill.)

4. It is an offence to provide false or misleading statements in respect of an appointment of a proxy. (See sections 6 and 27 of the Bill.)

5. Several new requirements are imposed in respect of the disclosure statement. (See section 9 of the Bill.)

6. A declarant is prohibited from transferring a residential unit unless the unit and specified common elements meet the prescribed standards. (See section 10 of the Bill.)

7. The declarant is accountable to the corporation for the budget statement that covers a three-year period, rather than a one-year period. (See section 11 of the Bill.)

8. A person who acts as a property manager under an agreement for the management of a property owned by a corporation is required to have prescribed qualifications. (See section 13 of the Bill.)

9. A corporation is permitted to access its reserve fund for the additional purposes of installing renewable energy and other energy efficient technologies and replacing common elements following reasonable wear and tear. (See section 14 of the Bill.)

10. If a corporation carries out work for the purpose of the installation of renewable energy technologies or other energy efficient technologies, the work shall be deemed not to be an addition, alteration or improvement to the common elements or a change in the assets of the corporation. (See section 17 of the Bill.)

11. A review board is established. Various functions that are currently functions of the Superior Court of Justice are assigned to the review board instead. (See section 29 and various other provisions of the Bill.)

12. A duty of fair dealing is imposed on all declarants and condominium corporations in their dealings with owners and purchasers of condominium units. (See section 31 of the Bill.)

The amendments to the Ontario New Home Warranties Plan Act include the following:

1. The definition of "home" is amended to include units in conversion condominiums. (See section 33 of the Bill.)

2. Consumer protection is added to the objects of the Corporation and new requirements are added with respect to the composition of the board of the Corporation. (See section 34 of the Bill.)

3. The Registrar is required to publish information on the Internet regarding previous business names of builders of condominium dwelling units and associated builders. Requirements are also imposed in respect of the disclosure of this information. (See sections 35 and 36 of the Bill.)

4. Warranties in respect of specified matters in condominiums are extended from one year to five years. (See section 37 of the Bill.)

5. The Corporation is required to complete its efforts to effect conciliation within the prescribed time. (See section 39 of the Bill.)

The Building Code Act, 1992 is amended to require the Minister of Municipal Affairs and Housing to ensure that a review is conducted and a report prepared in respect of noise protection standards for properties owned by condominium corporations. (See section 41 of the Bill.)