Ontario to unveil new condo rules to crack down on abuse by boards, directors
New rules follow CBC Toronto investigation into problems with condo governance
The Ontario government is rolling out a new set of rules Wednesday to crack down on abuse and mismanagement by some condo boards.
The changes to the Condominium Act come after a CBC Toronto investigation that found members of several condo boards in the GTA allegedly forged signatures for board elections and signed service contracts with businesses in which they had financial stakes.
Tom Wright, chair of the newly-formed Condominium Authority of Ontario (CAO), says the regulations will force board members to be accountable to condo owners.
"[Owners] will know whether or not someone who is running for the board of directors is an owner or not. They will know whether that person has any interest in any contracts. It's much more visible," said Wright.
The CAO was created this summer to provide education and promote awareness of rights and responsibilities for owners.
It also manages the Condominium Authority Tribunal, a body that resolves disputes.
The rule changes include:
- Mandatory training for condo board directors.
- Disclosure of whether board members are owners or occupiers of a condo unit.
- Disclosure of conflicts of interest in signing business contracts on behalf of the condo building.
- Clearer rules for easier access to records for condo owners.
- Mandatory updates about condo corporations to improve communication between boards and owners.
- New notices, quorum and voting rules to make owner participation in meetings easier.
Wright adds there is a revamped system where owners can take their complaints online to the tribunal board.
"It supports a notion that they can get addressed at a much earlier stage than perhaps has been the case up to this point," he told CBC Toronto.
'There really was no recourse'
Jennifer Campbell and other condo owners at Five Condos in the Church-Wellesley neighbourhood have been through the wringer when it comes to mismanaged boards.
"Once [the board members] were elected there was very little you can do," Campbell recounted.
Campbell was excited to be a first-time condo owner but that excitement dimmed once she and other owners learned three men and their associates took over the board, allegedly by forging signatures on paper proxies to win board elections.
"We had the ability to request contracts and minutes and we wound up hiring a separate lawyer. But there really was no recourse under the old act," Campbell said.
She also said their condo fees, which were managed by the board, were used against disgruntled owners in legal disputes.
"You wind up fighting against yourself in a certain way or at least funding the fight against yourself."
Campbell believes the new rules fix many of the roadblocks and legal issues they had faced previously. But she and others still have questions of how these rules will play out in reality.
Will this close the loopholes?
Audrey Loeb, a lawyer with Shibley Righton LLP in Toronto, has followed abuses by some board members closely. She specializes in condominium law and now wonders if the province reacted too strongly with these new rules.
"I think the protections the government ... brought in has swung the pendulum very hard in favour of the unit owners. And there are major issues with boards and property managers getting used to this," Loeb said.
She added that her experience working with various board members indicates there will be a lengthy "break-in" period and adds that enforcement of these rules will be spotty — as it is not the responsibility of the CAO to make sure every condo board in the province follows the letter of the law.
"The rules have teeth. But the question is: how are they going to be enforced?" Loeb asked.
Questions about the reliability of the rules are echoed by Campbell, who also takes issue with electronic voting, a new measure that was introduced after proxy vote fraud allegations.
"If someone wanted to manipulate the voting process, they could get a hold of that masterlist to do so. I think that's a lot easier than forging people's signatures," Campbell said.
The CAO responded to doubts about the rules by stating condo owners now need to be more proactive in flagging or disputing "mis-steps" by the board, as Wright explains.
"A lot of people have no idea what it's like be a director of a condo corporation, let alone what it's like to have the responsibility of a several million dollar budget, he said.
"Education will make a difference to what we'll call 'better governance.'"