Toronto Star

Disputes are not covered by the Condo Act

- GERRY HYMAN SPECIAL TO THE STAR

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.

 ?? TORONTO STAR FILE PHOTO ?? A condo board’s director can sit for three years, and run for re-election.
TORONTO STAR FILE PHOTO A condo board’s director can sit for three years, and run for re-election.

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