What You Might Not Know About Condo Ownership in Mississauga
When it comes to owning a condo, there’s a lot to know and sometimes it feels like info isn’t that readily available.
That is why City Sites Property Management Inc. held a Mississauga Condominium Owner Information Session on Monday, October 24 called Condo Living: Today and Tomorrow to give condo owners some information about condo ownership.
I would say it was well attended, and the panelists that City Sites assembled were able to speak to important issues such as law, insurance, accounting and government. The panelists included Dipika Damerla; MPP (Mississauga East-Cooksville), who has been working on modernizing the Condo Act since her election in 2007, Armand Conant; head of condominium law, partner at Shibley Righton LLP Law Firm (he's also a member of the recently established Condominium Authority created by the province), Mark Shedden; president of Atrens Counsel Insurance Brokers and Condominium Advisor for the Ontario Provincial Government and Stephen Chesney; partner, chartered accountant at Parker, Garber & Chesney.
Now, the basics (as told by Armand Conant):
A condo is a form of real estate ownership that started becoming prevalent around the 1960s in Canada. Today, there are 9,400 residential condo corporations in Ontario and 700,000 residential units with over 1.4 million people living in them. There are different types of condos, and this may be interesting because when we hear “condo”, we think of a high rise apartment, but because it's actually real estate, a condo could almost mean anything. Besides standard condos that most people know about, there are common elements (i.e. golf courses could be classified as condos), vacant lots (the whole lot and everything inside can be considered a unit) and there are also two other condo types called Leasehold and Phased.
MPP Damerla brought up how two new condo authorities will be established under the new legislation. One is the Condo Authority which will settle disputes between owners and condo boards, and the second is the Condo Regulatory Management Authority. This authority will ensure every condo corp is regulated by the Ontario government. Both will be up and running sometime around the fall of 2017.
I got the sense that Chesney, the professional auditor, wanted to emphasize that the auditor's only role is to audit a condo board’s books and communicate to owners whether or not the numbers add up, should they be accurate. As in: "please don't shoot the messenger; I only add the numbers, I can't do anything about how bad your condo board is doing in terms of spending money wisely."
As for auditing, you only ever hire an auditor when you feel something is suspicious. If you go that route, your fees will not be covered by the condo board. Chesney's other tip was to look at the auditor's report first—if it's clean, then it's good, but more often than not you might find something extra that's a little suspicious.
One curious bit of information emerged regarding reserve funds. For those who don't know, reserve funds are filled with additional money that the condo corporation might collect to, say, finance a future repair. In some cases, this account is mismanaged. There is a motivation to take money out of the reserves for short term gains, such as to avoid charging more in condo fees. But if you do that and you deplete the reserves, you may end up having to charge significantly higher fees down the road.
Funny thing is, there is currently no clear definition as to what a reserve fund is under the current Condo Act, so that needs to be cleared up in the upcoming reforms.
Knowing what your insurance policy covers in your condominium is just as important when it comes to condo ownership. Shedden's brokerage, Atrens Counsel, covers over 3,000 (at least 90 per cent) of the condominium boards in Ontario. Shedden's presentation outlined mainly what condo boards are covered for and what individual unit owners are insured for. Shedden's advice to owners was to insure the full value of their condominium, otherwise they could be affected by what is known as the coinsurance penalty and that could be disadvantageous for the policyholder
In layman's terms, it just means you shouldn't insure only 50 per cent of your unit to save a few dollars on the premium, because if a fire guts your place, you'll only be reimbursed for 50 per cent of your things. Most policies have an 80 to 90 per cent coinsurance clause that mandates you to insure up to that amount to make sure you're covered at the appropriate value.
Conant sounded like he was providing very basic education to people who have not heard of a condo before, despite the fact most in attendance lived in one, were looking to buy one, or served/are serving on condo boards. To him, the single biggest cause of disputes is lack of knowledge, so it was good of him to take the time to go over basic information.
Finally they got to the Q&A session. I was more interested in the questions from the audience, and I was more amazed at the fact that some of these questions had to be asked at all. That gives an indication as to the state of governance in condo boards. Here's a sampling of them.
Can a board of directors decide amongst themselves whether they can give themselves perks to avoid paying fees on their own units, or can they use units for personal reasons without paying any fees required?
Simple answer is NO, NO…and NO. However discouraged, it is surprisingly not prohibited, because it's not a criminal act. However, it's completely contrary to what a condo board should be doing on behalf of the owners.
Are there restrictions on pets in your unit if they happen to be a support animal for a disabled individual?
There’s no ambiguity when it comes to the physically disabled (i.e. you're blind and you need a seeing-eye dog), because it's a human rights issues.
The notion of what was considered a disability came up. If you're blind, that's one thing. But if you need Scruffy the dog as some kind of emotional support, unfortunately that does not qualify as a disability and your animal cannot be classified as a support animal. So if your condo doesn't allow pets, and you don't have a specific disability, there's not much you can do beyond seeking out a different building.
How do condo reforms affect insurance rates for condo boards?
According to Shedden, they'll be going up due to the new legislation, so best to check with your insurance advisor on how that impacts your condo fees.
Can a condo board president also be the property manager? Can a board's president have a family member as the property manager or fellow family members as board members (sounds like a big dose of good ol' nepotism)?
The new tribunal under the reformed Condo Act is supposed to deal with a dispute of that nature, but until that is set up, people will have to use currently available legal means to rectify a situation like that.
How many people can you legally squeeze into one unit?
That is based on whatever the condo bylaws or municipal bylaws state, such as the fire code. That said, this is a problem in many buildings, as it's hard to keep track of who goes in and out and suddenly management hears reports of nine people living in a 500 sq. ft. unit.
Do you have a condo horror story to share? Let us know in the comments!
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