What you need to know from the CAO!

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Transcript

SPEAKER_00 0:00

Thank you so much for tuning in to the Condo Pod, brought to you by the Canadian Condominium Institute Eastern Ontario chapter. This is your go-to space for all things condo. From governance and legal updates to maintenance, management, and community living, the eCondo Pod tackles key issues affecting our condominium community. Whether you're a condo owner, director, or industry professional, you will find insights, stories, and expert advice to help you navigate the world of condominiums with confidence. We are diving into topics that matter most to condo owners, directors, and professionals across the region. If you're not yet a member of CCIS Ontario, don't forget to join. You can click on the show notes to find out how. Today we are continuing our snappers series, the series that aims to give you the up-to-date information on hot topics. And on that vein, we've brought back the Condo Authority Ontario vice president of programs, policy, and dispute resolution, Mark Bala, for some information that is hot off the press. Mark, thank you so much again for being here.

SPEAKER_02 1:02

Always a pleasure. Thanks for inviting me, Nancy.

SPEAKER_00 1:04

All right, if you haven't seen our earlier sessions with Mark, I do invite you and encourage you to go and check out our earlier episodes. So, Mark, once again, today there's big news in the industry, legislative updates, a cross-province survey about reserve funds, changes coming down the pipe from the Condo Authority Tribunal. We're hoping to give everyone today a quick update on what is going on, how do you get involved, and where do you find the information on all of these updates? Let's go ahead and start with the first one, which is the legislative updates, some changes to the Condo Act, the regulations, Condo Authority Tribunal. What is going on there?

SPEAKER_02 1:40

It's very exciting. Just this week it was announced by the ministry that we are having legislative change, some taking effect December 31st, 2026, some taking effect July 1st, 2027. Now, for those of you who weren't familiar, we had to have some concern because the legislation was deemed to expire December 31st, 2025. And there is a temporary measure put in to extend the timeline for one year for us to be able to see some of these legislative changes come into fruition. And now from the ministry, we officially have word that there are legislative changes coming. So for December 31st, there are kind of two big buckets in the way that we've been looking at it thus far. And I know this is all a fairly recent announcement, so there's still much uh digging to do and delving into the regulations and understanding more precisely what's going on. But on a high level, uh it's changes to requisition meetings. So requisition meetings are an important consumer protection tool. If 15% of owners in economy corporation have a concern, they can requisition for a meeting to vote on various matters. But historically, the process for doing that hasn't been very clear. So one of the important changes is we're now going to have a set prescribed form for requisitioning a meeting to make it a lot easier for everybody to understand the form and content of what should go into putting efforts together to have a meeting of owners come together. In addition to that, there's also expanded delivery, just getting with the times, allowing for electronic delivery of these notices if condos uh boards are open to that, to make it a little bit easier and just a little bit more commonly how we communicate in this day and age. Uh also, boards are now going to have 20 days to respond, uh, which is a was a painful.

SPEAKER_00 3:17

That's a big deal, Mark. I know that it's it's been very hard for many condominium corporations. They want to do the right thing by getting a turnaround in five days. Uh, you you can sometimes you can't even get the board members to speak in time within five days.

SPEAKER_02 3:30

Yeah, I've had managers come up to me uh saying how how much of a struggle that is. So I I do think that that 20 days is going to be seen as something that makes it a little bit easier to properly respond by also, but also not extending it so long that people don't feel like anything's happening. Absolutely.

SPEAKER_00 3:44

It's a it's a happy medium, a good balance. We want to make sure that that the owners feel heard and want to make sure condos have time to do it properly. So I think a 20 days is a it's a nice happy medium.

SPEAKER_02 3:54

Yeah. Uh the second big one is what I like to describe as a reimagining of the owner-occupied director position. So we're changing the title to non-leased voting units. And the idea is well, I guess I'm gonna take a step step back. For so many years, so many condos, including my own, have struggled with this owner-occupied director position. All kinds of concerns around how it's supposed to work, misunderstanding that to fill the position you have to be owner-occupied when it's really those who are voting for the position. So this change is taking it a little bit of a step back and not making it complicated unless a particular condo community chooses to. And what I mean by that is there's not a owner-occupied or now going to be called non-leased voting unit position on the board unless a non-leased uh owner specifically requests it from the condominium corporation, and non-leased voting units are the minority of the voting units in the condominium corporation. So the idea is that non-lease voting units, owner-occupied units can vote for their own director if they ask for it and if they're in a minority. The idea is to give non-lease voting units a chance to have a voice at the board table, even if they're in a minority, should they choose. But it's very much an active taking the steps to create this as opposed to condos scrambling as they have in the past to try to understand it if it's not something that's significant for their community, especially. What do you think about that?

SPEAKER_00 5:16

I think it's a really good step in the right direction because I think that when that provision came in, it really was aimed at Condyman Corporations that are majority investor owner. And in Eastern Ontario, in particular, which is what this podcast is uh most relevant to, we don't really have that situation, Veriano. It is primarily a larger metropolis type um uh tool, I suppose, to make sure that you had representation on the board from the previously the oop, the owner-occupier position. So I think it's a really good step in the right direction for smaller condos, for condos outside of the GTA, where they don't really struggle with that being an issue, where it's almost everybody lives there and owns there. And so it's really not necessary.

SPEAKER_02 5:59

Great. Uh and the other big piece is as of July 1st, 2027, the Condo Meeting Authority Tribunal is going to have expanded jurisdiction into meetings. And I know we've long been waiting to understand what the scope of that jurisdiction is. Now we know. So the scope of it is limited to calling and requisitioning owners' meetings, so pre-meeting issues, not in meeting issues. And the legislation, just to be very clear and helpful, has specifically excluded conduct of the meeting itself, advanced voting proxies, or even a mix. So if someone were to try to bring a case to the tribunal, it appears from the legislation that if it involved a component of in-meeting issues or voting and proxy issues, then they would not be able to bring their case forward. And from our perspective, learning from the records jurisdiction of the tribunal, there have been a number of decisions and cases where people try to shoehorn an issue into records jurisdiction. So, for example, if I were to take issue with a decision my board made and I'd ask for the meeting minutes because I took an issue with it, we have people that try to go further in expanding the records jurisdiction from just being able to seek the minutes to trying to understand why the decision was made or change the decision. And I think it's in that spirit that we have these specific exclusions. The idea is pre-meeting, the requisitioning and the calling of meetings is where the jurisdiction lies. So notifying owners of the right to requisition a meeting, if a condominium is going to pass a new rule, making sure that owners have the opportunity to requisition a vote before that rule takes effect. Preliminary notices, form content, and delivery of submissions by owners to include in notice packages, and potentially the reimbursement of reasonable costs if an owner is required to hold and call a meeting themselves, if they're entitled to, and the condominium corporation does not. So issues along those lines is what we're looking at. We're also looking at our friends in BC and Alberta who have meetings jurisdiction all on their own, uh expanded to beyond what we have here, but also learning some lessons as what they're experiencing and looking at. And I think that also is a useful way for us to start to anticipate what types of issues we might expect or what types of outcomes we might expect. Of course, it's not binding precedent. Even our own tribunal decisions are not binding precedent, but just to give a flavor of expectations, I think.

SPEAKER_00 8:05

And I like the idea that it's procedural irregularities that could uh jeopardize an owner's right to participate. That is essentially the subject of what we're looking at here, to make sure that everybody does have an opportunity to understand what is a meeting all about, how is it being called, why is it being called, what are my rights in relation to that meeting? I think that makes good sense. Uh, where the industry certainly was nervous from the from the user side, we were very nervous if the meeting jurisdiction was going to go beyond the meeting room door, just to ensure that condos don't get held up in their ability to do business. So I think it's I I've heard, I can tell you, I've heard from a number of different colleagues throughout the industry who have been reading these over the past couple of days where they came out. And I've heard, oh, sigh of relief. Oh, phew, we're not gonna have to worry about not being able to conduct business uh because you know, a meeting is held up. Uh for example, directors, electing directors. We don't want to stop the election of directors if there's uh if there's a proceeding trying to go forward to deal with the substance of the meeting. Maybe people want to get off the board, maybe they need to leave the board, right? So we want to make sure business can continue to be transacted. So I think it's a happy medium there as well.

SPEAKER_02 9:15

Yeah, and and we're also monitoring BC and Alberta and what's coming out of those who do have that type of jurisdiction to get an understanding. But for the time being, yes, we're just looking at the pre-meeting issues. And you know, personally, if you have a condominium that's not holding annual general meetings, if you have owners that feel as though a condominium board is not properly addressing the requisition, the current avenues to go and address that are incredibly expensive and that makes them prohibitive. So being able to come to a more cost-effective, faster tribunal to be able to address these issues really enhances the consumer protection that we exist to to uh champion here in the past.

SPEAKER_00 9:47

I agree completely. And I think uh in Eastern Ontario, anyway, the the general sense uh in the industry is if a if an owner, a group of owners are requisitioning a meeting, even if it's not perfect, holding the meeting probably has value because you want to find out why are people upset? What is going on in the community to cause this disharmony? Let's have that meeting, let's talk it through, let's get ourselves to the other side. So I think it's in keeping with that intent as well.

SPEAKER_02 10:14

Yeah, totally. We're all about trying to promote building harmonious community and having those conversations if there is a concern, even if it doesn't hit the strict criteria, is has been a best practice recommendation from the legal sector uh in condos for a very long time, just to try to encourage better communications and the like. But also, if you run into a position where you want to do something more formally and there's concerns, now you'd be able, as of July 1st, 2027, to go to the tribunal for some guidance, which I think is going to be really helpful.

SPEAKER_00 10:40

Yeah, agreed. I think we're on the same page there. Um, okay, so we are gonna jump into, we're gonna switch switch veins a little bit. We're gonna jump into this reserve fund um gathering of data. Tell, tell me all about that and tell us also how can condos across the province get involved in this.

SPEAKER_02 10:57

Wonderful. I will, thank you. So it's all started in 2023 when the CAO released a reserve fund report based on some internal analysis of data and recognizing some shortcomings in that report in terms of representative data geographically across the province, and also some issues around the potential inaccuracy of some of the data collected. So, in trying to address that and get a more accurate picture, particularly with concerns around inflation and reserve funds that we hear in general, we've partnered with Toronto Metropolitan University's Urban Analytics Institute to enhance how we go about uh doing this research. And we have just recently launched a survey that we had a lot of help from experts in the sector, including you, Nancy. Thank you very much for your help with that, to try to get a better picture of the status of reserve funds in the province. Okay, so we're asking condominiums to voluntarily share with us information that they disclose in their status certificates all the time to allow us to get a sense of what their notice of future funding is, their financial statements, not to uh champion or call out any particular condo, but to anonymously gather data to get a sense of what is the state of reserve funds in the province. I remember having a conversation about a year ago with the director in Ottawa talking about how in his community there was a lot of turmoil about the percentage of the budget that was going towards the reserve funds because people didn't want common expenses to go up. It's the old uh thought process if I'm not going to be here in 20 years, why do I have to put so much money aside? And what this fellow said to me was that what they would really like is the condo authority of Ontario as a neutral source to be able to provide some information. For example, what's the average percentage of a condo's budget that goes towards the reserve fund? How can how do we measure up? Almost like you see in rentals, the the average percentage of rent increases and that type of thing, just to be able to have a neutral source that can provide it. So we're asking condominiums to do this on a voluntary basis. We're not requiring them to do this. Uh, we are promising to protect their data. We're promising to anonymize any individual condos as we put our findings together, ultimately with the goal of releasing a preliminary report and then a more fulsome report on the state of reserve funds in the province. In order for this to come together and have a proper representative sample size, we need approximately 1,000 condos to participate. Of course, it depends where they are in the province, because there'll be different areas will require a certain threshold of participation to be a proper representative data sample. Um, and also the variance between condominiums, ones that have shared facilities, ones that don't, different amenities, small condos, townhouse condos, like the all of that has to come into the equation as well. But the gist is we're asking condominiums to participate in the survey. Uh, the survey takes 45 to 60 minutes to complete. If they don't want to go to the trouble of doing that, they can just upload some of those documents that are normally found in their status certificate for us. Or if they'd like, they can do both if they'd like to help us. And we do thankfully have uh quite a few uh industry experts who are endorsing this and encouraging condos to participate so we can have a more accurate picture. And we're really grateful for that. In terms of going through this, we wanted to make sure that we were approaching it in the right way. We wanted to make sure we were asking for the right amount of information, and we wanted to make sure that we had the support of the sector in doing this. So we have gone through it the right way. We we do have that support, and we're very excited. We're trying to encourage condominiums to participate. Of course, if you're listening to this and you're a condo that's thinking of participating, please make sure you go through the appropriate channels to have the right approval to be able to do that. Uh, but we're really encouraging as many condos as possible to share this information with us so we can get a sense of the state of reserve funds across the province.

SPEAKER_00 14:37

And so, Mark, how would they find the is there is there a link they can go to? Where would you have to go?

SPEAKER_02 14:43

It's front and center on our website, thecao.ca. Uh, we are going to have a campaign where we're going to have a webinar and a lot of of marketing around it. We have a number of folks who are recording videos encouraging uh condos to take part. And and as we circulate those videos, there will also be links there to make it easy to participate. But as of right now, you can go to our homepage and it's it's right there uh on the homepage with the where you can go and sign up to take a look at the survey or upload your documents directly.

SPEAKER_00 15:10

So cao.ca, it doesn't get much easier than that for a website name. So cao.ca, jump on there and you'll have a fresh link right on there that you can go and participate. And uh I am one of those folks that's going to be recording a video, so we look forward to having that out there. And folks, this is really important information that can help educate the entire sector on our future of reserve funds and where they need to be, where they're going. Are we doing the right thing to make sure that our condos are fully funded now and into the future? We know that a lot of condos right now are facing some turbulent times with respect to their funding. So this is just one piece of information that hopefully can help us in the long term to be better funded uh for our future owners. Fingers crossed, we can get all this data. Um, and across the province. So again, Eastern Ontario, if you're listening, uh we hope that you can participate in this because that information is gonna be very important so that we do get a good cross-sampling across the entire province. So we were getting close to our time already, Mark. It goes so fast when we speak. Let's talk really quickly then about our last update, which is the Condo Authority Tribunal is updating its rules and some practice directions, I understand. So I know we're just gonna gloss over the surface here, but tell me a little bit about that too.

SPEAKER_02 16:25

Well, our tribunal chair, Ian Darling, has been working really hard. He put out a consultation and got a lot of feedback from the sector about what would be appropriate to include in updating the tribunal's rules. I I haven't seen what he's come up with yet, but I know that he is putting something together that is reflective of that feedback. Uh, we're also working on trying to update the platform itself. Uh, it's been around for some time now just to make it easier, more user-friendly. Uh, we also know, though, as part of the legislative change, that as of July 1st, the expanded maximum damages that the tribunal can order is moving from $25,000 to up to $50,000, which aligns with small claims court. So we have to have that uh taken into account in some ways as well. I'm not certain if Ian's going to include that specifically in the rules or not, but that also is just amongst the changes that are coming. Uh, and when we do go about changing the rules, there is a 30-day notice period. So they will be circulated at least 30 days before they come into effect. So once Chair Darling has that ready, we'll have that circulated and uh we'll be good to go there. But I believe that the the ultimate idea is to be receptive to the feedback that's been received and just to continue to evolve the tribunal with the times. We're coming up to a 10-year anniversary fairly soon. It just makes sense to do that as we move along.

SPEAKER_00 17:34

I was just gonna say it's hard to believe. I feel like it's been maybe two years, maybe three. It's gonna be a decade really soon that all of these changes came into effect, that the CAO was born, the cat was born, etc. So we've learned a lot in the first decade, and I guess we're just about ready to jump into the second one and a lot more to learn, and let's put ourselves in a good spot going forward.

SPEAKER_02 17:55

Definitely.

SPEAKER_00 17:56

Mark, thank you so much for your attendance here today. As always, so much fantastic information. We're gonna see what we can do, but to get this information out as soon as possible so we can start getting boards onto this survey and getting everybody in tune. So, again, to everybody else, thank you so much for tuning in to The Condo Pod, your source for all things condo in Eastern Ontario. Be sure to subscribe so that you never miss an episode and share this podcast with your fellow members of your condominium community. For more resources and upcoming events, visit us online at ccieasternOntario.ca. And if you want to do that survey, cao.ca, pretty much the easiest link you can get to.

SPEAKER_02 18:34

Thank you so much, Nancy. We appreciate your support and your help with this reserve fund project and your the video and your endorsement of it. It means a lot. It's always great to see you and always great to join you on this podcast as well. Thank you.

SPEAKER_00 18:43

Absolutely our pleasure at CCI Eastern Ontario, Mark. Until next time, stay informed, stay connected, and keep your community strong. Thanks, folks, and have a great day.

SPEAKER_01 18:51

Thanks for tuning into the Commando Pod. Your source for all things Commando and Eastern Ontario. Be sure to subscribe so you never miss an episode. And share this podcast with your fellow Commando community. For more resources and upcoming events, visit us at CCIEasternOntario.ca. Until next time to stay informed, stay connected, and keep your community strong.