While the pandemic will undoubtedly continue to play a large part of the year ahead, there are some other emerging trends that will alter the way the condominium industry does business in Ontario in the coming year.
Keeping with our tradition, we offer five best guesses for what lies ahead in 2022.
1. The New Virtual World
The Ministry of Government and Consumer Services is seeking input on proposed permanent changes regarding digital and virtual processes under Ontario’s Condominium Act, 1998 (the “Act”). At this point in time, these proposals include the following:
(i) Corporations may hold virtual or hybrid meetings unless corporate documents state otherwise;
(ii) Votes and elections may be conducted virtually unless corporate documents state otherwise;
(iii) Notices to directors and unit owners may be sent electronically; and
(iv) To permit Corporations to store records by electronic means and to facilitate electronic examination.
My short response to these proposals: Yes, please! If there is one benefit to the pandemic it is the quick modernization of the Act.
2. Nuisances and the Condominium Authority Tribunal (“CAT”)
As of January 1, 2022, the CAT will hear nuisance related disputes. I would have to imagine that approximately 25% of the disputes property managers deal with fall under this category (think noise, odours, pests).
The challenge with nuisance disputes is that they are quite subjective. What is a nuisance to one, may not be a nuisance to another.
What does this mean for boards and property managers? Document everything. If complaints are received, the concierge should immediately investigate and report. The concierge will be acting as the independent verifier so it will be important to get all staff on the same page. A clear and cogent enforcement plan should be prepared to provide condominium corporations with successful outcomes when (not if) such disputes proceed to the CAT.
3. We’re Still Talking About Insurance
Condominium insurance premiums and deductibles continue to climb. There are several reasons for these increases, including rising property values, reduced number of insurers, rising costs of insurance and climate change, to name a few.
We anticipate legislative changes to address the following issues:
(i) Some jurisdictions permit condominiums, under limited circumstances, to use their reserve funds to pay for their insurance expenditures that have not been approved in the budget. There may be other changes that expand the purposes for which a reserve fund may be used. These changes could provide some leeway, but we must proceed with caution (the counter is reserve funds could be vastly underfunded so these changes will need to be carefully thought through).
(ii) Requiring condominium owners to have insurance that covers damage to improvements.
(iii) Creating a “standard” standard unit by-law that would apply to all condominium corporations irrespective of whether a standard unit is in place.
Other changes which may provide some assistance to condominium corporations would be the placement of a cap on increases to condominium insurance premiums (or the requirement that specific applications be made for rate increases).
4. Chargebacks
Amendments to Section 84 of the Act are not yet in force, but will drastically alter how condominium corporations process chargebacks. We anticipate that the amended Section 84 will come into force in 2022 and when/if it does, 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 CAT 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.
5. Omicron, It’s Back Again
It’s unfortunate, but the reality is that at least the first half of 2022 will likely look a lot like 2021. Amenities will continue to be opened and closed. Condos will be asked to take difficult steps to ensure residents are complying with mask policies, physical distancing and other COVID-related requirements.
Owners will continue to ask for rebates to their common expenses as a result of closures to amenities and management and the board will need to patiently respond to such questions (i.e. advising residents that there will be no discount).
Condominium living is close quarters. When many are working from home, there will inevitably be an increase in those nuisance related complaints we talked about above. Frankly, people are aggravated and tensions are high. COVID and the introduction of nuisances at the CAT should make for an interesting 2022.
As an industry, we will need to continue to be patient and understanding. In turn, residents will need to continue to convey their concerns in a respectful and courteous manner and if that does not occur, then boards must ensure that they take steps to protect their property managers from harassment.
It’s been a grind, but we will get through this. Wishing everyone a safe and prosperous 2022.
