Government has no excuse for delaying consumer protection sections of new Condominium Act


thestar.com
Bob Aaron
Bob Aaron bob@aaron.ca

Posted On: Saturday, October 28, 2017
There is no timetable for many key consumer protection amendments to the former condo act.

With parts of the new Condominium Act coming into force on Nov. 1, prominent Toronto condominium lawyer Audrey Loeb has expressed concern over the government's failure to protect consumers from developer "schemes" in the proclamation of the legislation.

The amendments to the Condominium Act 1998 were enacted in December, 2015, by the passage of Bill 106, the Condominium Management Services Act, 2015. Although the legislation has received Royal Assent, the amendments do not come into effect until they receive section-by-section proclamation by the Lieutenant Governor.

Some of the amendments have already been proclaimed - many of them come into effect on November 1, and still others will become law on January 1, 2018.  But there is no timetable for proclamation of many of the most important consumer protection parts of the new law.

Audrey Loeb, condominium law expert and author of two books on the Condominium Act, is among the critics of the delay to enact the protections for buyers of newly-built condominiums.

She was harshly critical of the government for failing to proclaim significant changes to the Act which would prohibit some of the worst builder abuses in the process of selling new condominium units.  These changes, she said, should have been proclaimed to come into effect next week.

"I don’t understand," Loeb says, "what the government’s excuse is for not proclaiming these sections on Nov. 1."

Some of the consumer protection sections not yet in force:

  • A prohibition against buyers being required to share in the cost of purchasing units intended for the collective use of all owners, such as guest suites, superintendent suites, and green energy facilities.
  • A prohibition against purchasers being required to contribute lump sums to the reserve fund at the time of purchase.
  • A prohibition against purchasers being required to compensate the builder for any lawsuits against it by the condominium corporation – an effective bar to suing the builder for any reason.
  • A new duty on builders to take all reasonable steps to register a condominium declaration without delay, and a prohibition against terminating a purchase agreement due to the failure to register the declaration.
  • A requirement that any money paid to reserve a right to enter into a purchase agreement must be credited against the purchase price.
  • A new provision that within one year of the builder turning over control of the building to a member-elected board, the condominium owners can terminate an insurance trust agreement or any agreement entered into by the builder that provides for delivery of goods, services or facilities to the corporation on a continuing basis, or a lease of the common elements. This applies even if the builder has signed an agreement which would otherwise bind the condominium owners.  In the event of termination, there would be no liability on the corporation, the directors, officers or owners for any penalties set out in the agreement.

This provision would cover, for example, a contract for the long-term lease of geo-thermal equipment or the supply of telephone, cable TV or internet services to the building.

There is also a new provision that the corporation may sell the building, land and all the units if 80 per cent of the unit owners vote in favour of the sale.

Is the government deliberately delaying implementation of the consumer-protection provisions until after the election next June?  

The government simply has no excuse for delaying implementation of these critical consumer protections. 

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Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

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