Disputes are not covered by the Condo Act
Q: Our board failed to specify the reason for a special assessment, as required by our bylaws. A request for the reason was unsuccessful and I contacted the Ministry of Consumer Services. A ministry representative advised they do not enforce condominium compliance with the act. This is strange as the ministry is intended to provide consumer protection. Am I correct that this leaves the Condominium Act as lame duck legislation? A: The Ministry of Consumer Services has no authority to enforce the Condominium Act. The act is “self enforcement” legislation and provides the means for enforcement by unit owners and corporations. A disagreement between an owner and a corporation relating to the declaration, bylaws or rules is to be mediated and, if necessary, arbitrated. The Ontario government is presently considering amendments to the Condominium Act and it is possible that a more efficient method of resolving some disputes between owners and corpo- rations will be introduced, perhaps by means of a tribunal or an ombudsman. Q: What is the length of a director’s term? What happens if a director’s term expires but his replacement is not elected at the annual meeting? A: A director’s term in office is set out in the corporation’s bylaws but under the Condominium Act cannot exceed three years. A director can stand for election for successive terms unless the number of terms is restricted by bylaw. A director whose term has expired may remain in office until a successor is elected. If the director does not remain in office, the board may continue to function provided there is a quorum or the board may appoint a director to fill the vacancy until the next annual meeting. Q: The financial statements for our condominium corporation refer to Class 1 and Class 2 reserve fund studies. What is the difference between the two classes? A: There are three classes of reserve fund studies detailed in regulations passed under the Condominium Act: comprehensive study; updated study based on a site inspection; updated study not based on a site inspection. A comprehensive study consisting of a physical analysis and a financial analysis must be carried out within one year following the registration of the declaration creating the condominium. Updates with and without an on-site inspection must be alternated at three year intervals. Q: Our board has been funding a social committee to the tune of $200 a month to finance assorted functions that are attended by fewer than five per cent of approximately 400 residents. Is it legitimate that all owners are required to contribute through their common expenses to events that the vast majority have no interest in attending? A: The Condominium Act defines common expenses as “the expenses related to the performance of the objects and duties of a corporation and all expenses specified as common expenses in this Act or in a declaration.” The objects of a corporation are “to manage the property and assets, if any, of the corporation on behalf of the owners.” The duties of a corporation are “to control, manage and administer the common elements and assets of the corporation.” I am of the opinion that the social committee expenditures benefitting very few of the residents are not related to the performance of the objects or duties of the corporation.
The board, if it wishes to obligate all of the owners to provide such funding, should amend the declaration to specify that the expenditures are common expenses. The declaration amendment will require written approval of owners of 80 per cent of the units. Lawyer Gerry Hyman is an expert in condominium law. Send questions to gerry@gerryhyman.com or fax to his attention at 416-925-8492. Letter volume prevents individual replies.