Good riddance to 2020. It was a challenging year by any stretch, but the industry prevailed with the hard work of many front-line condominium personnel including, but not limited to, cleaners, security staff, superintendents and property managers. While we are not out of the woods quite yet, a big thank you goes out to all of those who kept the industry afloat during 2020.
Now that we have turned the page, we look forward to what 2021 has to offer. While the pandemic undoubtedly will play a large part in the year ahead, there are some other emerging condo trends that we believe will change the way the condominium industry does business. In this regard, we outline five best guesses on what lies ahead.
1. Insurance
The condo insurance industry saw its fair share of media coverage in 2020. Across the nation, condominium insurance premiums and deductibles have skyrocketed. There are several reasons for these increases, including rising property values, reduced number of insurers, rising costs of insurers and climate change, to name a few. The impact seems to have been felt the most in the Province of British Columbia. In fact, in December 2020, the BC Financial Services Authority released a report, which analyzed important factors impacting the market.
While the report outlined some key takeaways, the general message was that there was no simple solution. It will take time, effort and cooperation by all stakeholders in the insurance industry to address this issue.
We anticipate that this issue will come to the forefront of the Ontario market in 2021 with much discussion from key stakeholders and government on how to address rising premiums and deductibles. Until that time, condominium corporations will be left to their own devices to mitigate this risk (for more information, see our January 14, 2020 communique).
2. Chargebacks
Amendments to Section 84 of the Condominium Act, 1998 (the “Act”) are not yet in force, but will drastically alter how condominium corporations process chargebacks. We anticipate that Section 84 will come into force in 2021 and if so, the industry will change the way it processes chargebacks.
It is likely that the regulations will set out the details to be included in a chargeback notice. This could be a notice from the condominium corporation, like a demand letter, that includes the date of the chargeback, a description of the incident and legal justification for the chargeback. Alternatively (and more likely), the regulations may prescribe a chargeback form that is more of a plug and play (similar to a proxy form).
Under the amendments, if the condominium corporation is charging back an owner, it must provide the owner with notice of such chargeback within 15 days of adding the amount to the contribution to the common expenses for the unit. Within 30 days of receipt of such notice, a unit owner must pay the chargeback or apply to the Condominium Authority Tribunal to challenge the chargeback. While there will likely be an adjustment period, this process should really clarify the murky and inconsistent processes which have been implemented to address chargebacks.
3. Gyms
When will the gym be opened? This must have been the number one question asked by condominium residents in 2020.
Provincial and municipal regulations change weekly to address the fluidity of the pandemic. At the date of this blog, the Province of Ontario is in a lockdown and gyms must be closed. During this period of time, we would encourage condominium corporations (if not already done) to formulate a safety plan to address the likely staggered reopening of Ontario.
A safety plan should outline the following good practices amongst a host of others:
- restrictions on the number of users at any given time;
- capping the time of use;
- requiring reservations;
- monitoring and screening users;
- spacing of equipment; and
- record keeping.
There is no better time than now to create such a safety plan to ensure the gym reopening is not delayed when it is reasonably safe to do so.
Condominium corporations will need to be mindful that they are tasked with the duty to control, manage and administer the common elements. Condominium corporations are also deemed to be the occupier of the common elements and, as a result, are liable for incidents occurring on the common elements. In this regard, the unpopular choice of closing the gym seems to be the wisest choice until it is safe to reopen. Corporations should implement and communicate a detailed safety plan to residents before reopening.
Safety plans are tools that may be used by the condominium corporation for many aspects of reopening amenities and some consideration should be turned to codifying components of these plans by way of rule. When the pandemic is no longer prevalent, condominium corporations will likely be unable to rely upon policies or interim measures which were implemented during the pandemic.
4. Electronic Meetings
Most, if not all, of the condominium industry has been introduced to the electronic meeting of owners in 2020. We would anticipate that hybrid meetings (in person and electronic meetings) may be the way of the future. Unit owners would be able to attend in person if they seek the community feel or be able to attend online if they are out of the City or running late at work. This format may (hopefully) decrease unit owner apathy which is ever-present in many condominium communities.
The Province of Ontario has extended the timeframe in which condominium corporations may hold electronic meetings without a by-law until May 31, 2021. If condominium corporations have yet to pass an electronic meetings and voting by-law, then it must do so within the next handful of months.
It is unlikely that the Province will continue to extend the aforementioned timeline. While vaccinations are being rolled out, condominium corporations may want to continue to hold electronic meetings for most, and possibly all, of 2021. Therefore, condominium corporations should ensure they pass a by-law to allow for this.
5. Condominium Authority of Ontario (“CAT”)
The jurisdiction of the CAT will be expanding. Records disputes have been heard for a couple years and some of the early kinks have been (are being) worked out. As of October 1, 2020, the CAT has addressed disputes over provisions in condominium corporations’ governing documents dealing with the following matters:
- Pets;
- Vehicles; and
- Parking or storage.
In addition, the CAT addresses disputes pertaining to the indemnification or compensation of the condominium corporation in relation to the above-noted disputes.
The CAT’s jurisdiction will likely expand greatly in the coming years. In fact, it would not shock us to assume that the vast majority of condominium disputes will be heard at the CAT, save and except for express carve-outs. We already know that the Auditor General has recommended a number of new issues to be heard by the CAT so it seems like it is just a matter of time before the jurisdiction of the CAT expands further.
