Real Estate News
Consumer Complaints Drive Amendment to Condominium Law
Condominiums are creatures of statute, yet understanding the law that creates a two-bedroom-plus-den unit or a 4-bedroom townhome and enables you to own it may be the last thing on your mind as you shop for a condominium. When a condominium is the right fit, there is no better home ownership for the money. If you don"t understand what you are buying into, you may discover you are living in the wrong place. The condominium ownership model can be applied to a variety of styles of units and buildings from high-rise apartment-style suites and townhomes to detached bungalows on garden lots. A condominium corporation oversees management of the complex and unit owners vote on decisions that enforce bylaws and the defining document, the declaration. Personal space is owned, but it is the shared ownership of buildings and land that makes this an affordable alternative for many preferred locations. The "shut the door and go" condominium marketing slogan presents the illusion of responsibility-free living. Condominiums do not require less work than owning a house, it is just different work. Leave your shovel and lawnmower behind when you move in, but get out the condominium bylaws and roll-up your mental sleeves for life by committee. Too many buyers are distracted by decisions of decor, lured by promises of affordable luxury lifestyles and frustrated by clever marketing that defies detailed comparisons of complexes. Often condominium buyers receive legal advice not realizing that it may not be based on a detailed investigation of the documents that will define the buyer"s life and financial obligations. Buying in a hot real estate market has meant many consumers hastily forgo normal "buyer beware" caution to snap up the unit they want. These buyers rely on professionals -- developers, salespeople, real estate brokers, lawyers -- for assurances that all will be as described. The problem is that in real estate, it"s only what"s in writing that counts, so if you don"t know what the documents you sign really say, you"ll have to live by them anyway. Again, this is fine when what you want and what you can afford matches what a specific condominium unit and complex have to offer. The consistency with which Ontario condominium buyers and owners have come up against misunderstandings and unexpected financial obligations has led one elected Member of Provincial Parliament (MPP) to call for an amendment to existing condominium law to save consumers from unpleasant surprises. Some of these changes already exist in other provinces. Rosario Marchese, MPP for Toronto"s Trinity–Spadina riding, has put forward Bill 185, An Act to amend Ontario"s Condominium Act of 1998, which is currently working its way through the legislative process. On March 22, it passed second reading and was referred to the Standing Committee on General Government. This system relies on MPPs receiving consumer feedback to encourage their support or rejection of such a Bill. Those with personal condominium experiences to share, should contact their MPP. Marchese believes that the intensity of debate and attention focused on creating and passing the current 1998 Condominium Act did not produce a law which fully protects consumers who buy and own a condominium of any type. This Act replaced Ontario"s first condominium law enacted in 1978. The Condominium Act of 1998 was intended to provide consumer protection in an industry that was emerging as a significant driving force for real estate markets. Since then, developers have become wealthy building high-rise, low-rise, townhome and other types of condominiums on what seems like every available square meter of urban land in Canada. The 2006 Census has revealed that condominium development drove the bulk of Toronto"s population growth and made significant contributions in other major centres. Ten years of unprecedented urban condominium development and now the suburbs face similar growth. According to records from the Legislative Assembly of Ontario, Marchese justified his Bill by saying:"In fact, 40 per cent of all new housing [in Ontario] is condominium-related, and so it isn"t a surprise to me any longer to find that there are a whole lot of condominium owners who are concerned about their relationship to developers in particular ... . They think and they believe [that] they are not being heard, and they"re right. This Bill is an attempt to address that problem and to address the growth and the lack of changes that have not kept up with that growth." Bill 185 introduces measures for improving communication between developers and buyers and making relevant information more accessible. Marchese explained it this way: "Condominium owners need disclosure packages that are clear and straightforward, declarations with standard provisions, more effective ways to enforce the Act, and faster and cheaper ways to solve disputes, and mostly they need to be protected from shoddy development practices, shoddy workmanship, surprise fees and sometimes complicated and unclear disclosures by developers." Clear consumer-friendly disclosure packages: "Developers imply they"re making commitments they are not actually making and, as a prize, they get great latitude from the courts on a regular basis. Courts are continually awarding on the side of developers, telling new condo owners they should have looked at the fine print." But a detailed review of differences between the original agreements and final disclosure documents would cost additional thousands in legal fees. Standard provisions for declarations: "To make sure there are no surprises, declarations will be standard so buyers can read them themselves and will not be bamboozled by legalese or distorted or contorted wording. All consumers deserve to know what they"re getting when they make that purchase, and condo owners should not be the exception." The example is one condo owner who reported that monthly condo fees jumped 25 per cent after 8 months to over C$300 for a 600 square-foot unit. Good-faith disclosure, similar to that in the Franchise Disclosure Act: "Buying a home is too important a prospect to play "hide the deal-breaker" with modest-income purchasers, which make up the majority of the market. Good-faith disclosure can go a long way to eliminate the fights between developers and purchasers. Developers will think twice before playing games, faced with a prospect of having to pay damages when they fail to disclose." A review board and review officers to resolve disputes: "Condo dwellers deserve an office that is a one-stop-shop that will give them the information, that will advocate on their behalf, help them settle disputes and support them in their dealing with developers ... . The review board will advocate on behalf of condominium owners. They will carry the flag for them. It will also be available to give them the information they desperately require ... . Right now, unit owners have to spend thousands of dollars and a long time solving problems with other unit owners, their boards and their property managers. If we don"t bring in review officers, no one will be there to make sure that the act is enforced except the courts." Opposition to Bill 158 includes claims that the proposed changes are unnecessary, will result in higher fees and will duplicate existing sections of the Condominium Act. Information services from the Ministry of Government Services are said to be adequate resources for consumers buying or owning condominiums. One way or another, a level playing field between condominium developers and consumers -- buyers, owners, tenants -- is long overdue. If condominium professionals do not willingly open direct lines of communication and reduce the need for cost-prohibitive legal advice or dispute resolution, then the government must step in. Standardizing documentation will improve consumer"s ability to understand what exactly they are buying, but the success of these measures will still depend on consumers relying on informed buying decisions, not merely being sold a dream. They don"t teach "condominium" or "home ownership" in Canadian schools, but this knowledge is as vital to sustainable communities as any other subject -- or perhaps more. How else can we create a nation of knowledgeable consumers adept at confident decision making?Golam commented:
Do you know that in Toronto there are many condominium owners are facing a tough time with their board and their condo management? There are condo laws but no one from government to enforce it. We trust the board members to look after the homeowner’s interest but when they become elected then everything changes. The board members join hand with condo management companies and forget about the homeowner’s interest. The home owners are left vulnerable, they cannot even go to their own condo lawyer because the lawyer supposes to protect the board’s interest not the condo owner’s interest. You tell me how is this fair and why the Government is not doing anything about this. We need a condo police in Ontario that will watch the activity of the condo management and the board.
What we are trying to do to fight this, we have created a contract for the new board that they will sign before they are elected. Also we have put together a website that will be used to connect with other condo owners from anywhere. The website is a networking site for all condo owners because we need a voice and without our loud voice no one will feel our pain.
Please help us with your suggestion.
Thanks,
Golam
www.howtocondo.com
23.03.2010