Problems and Purpose

The Ontario Government’s Ministry of Consumer Services decided to convene a Citizen Reference Panel in 2012 as part of their comprehensive review of the 2001 Condominium Act.

This legislative review could have occurred behind closed doors and engaged only the traditional policy experts. But the Ministry of Consumer Services, when tasked to undertake this review, recognized that a traditional approach might fall short of meeting the current and future needs of Ontario. Such an approach might miss critical information concerning how condominiums operate; the sheer diversity of Ontario’s condominiums, to say nothing of the diversity of experiences in each of those condominiums, makes it difficult to be clear about current challenges and confident about particular solutions. By engaging the voices of residents, owners, and landlords who live and invest in Ontario’s condominiums, as well as the stakeholders who build, manage, and support condominiums, the Ministry of Consumer Services believed it would arrive at better-informed legislative review.

Background History and Context

The Province of Ontario (Canada) is at the centre of North America’s condominium boom. Condominiums account for approximately half of new homes built in the province, with one in ten Ontario residents calls a condominium home.

Issues affecting condominiums have become much more complex since the Condominium Act (henceforth the Condominium Act - the provincial legislation that governs the rights and responsibilities of condominium developers, owners, corporations, and boards of directors and establishes a number of protections for condominium buyers and owners) came into force in 2001.

Originating Entities and Funding

The Ontario Ministry of Consumer Services (Government of Ontario)

Participant Recruitment and Selection

The 36 members of the Residents’ Panel to Review the Condominium Act were selected by civic lottery. Ten thousand invitations were sent to randomly selected condominium residences across Ontario early in September 2012. The invitations were transferable to anyone over the age of 18 who lives or owns in that same condominium corporation. Each region of the province received a number of invitations roughly proportionate to its population. The letter invited residents and owners of condominiums to volunteer three full Saturdays of their time to learn about the Condominium Act, share their perspective and experience as a condominium owner or resident, and work with others in order to develop a set of shared priorities for changing the Act. Condominium developers and managers, currently elected political representatives, and employees of the Ministry of Consumer Services were ineligible to participate.

More than 500 people responded to the invitation, either volunteering to be part of the Panel or regretting their inability to participate but requesting to be kept informed about the process. From among the pool of 278 volunteers, 36 Panelists were randomly selected in a blind draw that balanced for five criteria. The selection guaranteed gender parity, matched the age profile of Ontario’s population, and mirrored the geographic distribution, the type of condominium residence, and renter/ resident/owner status of Ontario’s condominium population. Special selection was not made for ethnicity, income, educational attainment or other attributes. These supplemental characteristics have been found to emerge proportionately within the pool of lottery respondents and are carried forward to the membership of the Panel. In short, the Panel was composed in such a way as to deliver good demographic diversity and to ensure that it was broadly representative of the residents, owners and renters who live or invest in condominiums in Ontario.

Methods and Tools Used

Working with experts in the field – Canada’s Public Policy Forum and MASS LBP – the Ministry developed a three-stage process for the Condominium Act Review. The Residents’ Panel to Review the Condominium Act is one important component of this three-stage process.

What Went On: Process, Interaction, and Participation

Over the course of three Saturdays, the Panel worked through three distinct phases. A learning phase was designed to ensure that each Panelist had the opportunity to become better informed about the concerns of condominium residents and owners and to become familiar with the current legislation. Thirteen of Canada’s most experienced condominium experts agreed to participate as guests and offered Panelists a wealth of insight into the issues faced by condominiums in Ontario – how the current situation in the province developed, how to understand the current challenges faced by condominiums in Ontario, and how one can evaluate the options available going forward. The second phase of the process asked Panelists to identify the issues they felt were most pressing, the values they believe should guide potential solutions, and potential responses that could help address these issues. A final deliberation phase required Panelists to explore in detail what these potential responses would entail, to describe the outcome they hoped these responses would lead to, and to work together to find common ground in order to arrive at a series of recommended directions to which the Panel could agree.

THE PANEL PROCESS: DAY 1: OCTOBER 27, 2012

The Panellists arrived at the Li Ka Shing Knowledge Institute in downtown Toronto for breakfast; some Panelists lived in the city, while others flew in the night before. Welcomed by the Panel coordinators, Panel members had an opportunity to meet informally and share condominium stories as others arrived. Each Panelist was given a binder with background readings from experts and journalists, and was asked to hand in their signed and witnessed Public Service Pledge, a one-page document attesting to his or her commitment to work diligently throughout the process and in the interest of all Ontario’s condominium owners and residents.

The Minister of Consumer Servicses opened the Resident’s Panel by welcoming members, thanking them for their considerable dedication, and reiterating her personal commitment to see that the results of the review’s public consultations are taken seriously inside the government. Peter MacLeod, principal of MASS LBP and the Panel’s moderator, then introduced the facilitation team, and briefed everyone on their task and what to expect over the coming Saturdays.

Next, facilitators invited Panellists to spread out across the lobby, as if it were a large map of the province, and stand in the approximate location of their hometown to illustrate the geographic diversity represented on the Panel. Panellists took turns introducing themselves and sharing why they had volunteered. Many Panellists expressed that the main reason for participating was their desire to become more knowledgeable about condominiums in order to be more effective members of their condominium communities. A significant number also expressed an interest in giving back to the province. There was a considerable group who had had unhappy experiences with their boards of directors, other condominium residents, developers, or condominium managers, and these members had volunteered because they wanted to help create solutions that would mean others would avoid facing similar challenges.

Next, Panellists embarked on a thorough orientation to condominiums in Ontario. The curriculum was designed to build progressively toward the Panel’s task, with each presentation providing important context for the next.

The Panel’s first presentation was about the current Condominium Act. The manager of the Condominium Modernization Project at the Ministry of Consumer Services, provided a comprehensive overview of the Act, describing what the Act says, how it works, and how it complements other laws to create the legislative framework in which condominiums operate. Panellists engaged right from the beginning and took the opportunity to ask for further information about a number of issues they wanted to address in their work over the coming days.

Next, a corporate representative for the national management team at Canada Mortgage and Housing Corporation (Crown Corporation of the Government of Canada), helped Panellists put condominiums in a larger public context. They explained the demographic shifts and policy decisions that help explain how we arrived at the current situation, the role condominiums play in Ontario’s current housing landscape, and the projected housing needs that Ontario will face – housing needs that will be met in part by condominium development.

In the final timeslot before lunch, the chief operating officer of the Ontario Home Builders’ Association (Lobby group for residential builders), provided a clear and succinct overview of the planning, development, approval, and building process involved in putting up different types of condominiums.

Following lunch, Panellists were introduced to their first small-group activity. Panel members in groups of seven or eight worked with a facilitator to begin developing the values they as a Panel would like to see used as guides for modernizing the Condominium Act. They began by brainstorming characteristics that describe a healthy, well-functioning condominium building. They worked together to decide on four or five characteristics that they then proposed to the whole Panel as values that should be embedded in a modernized Condominium Act. The facilitation team recorded these values for future reference. Panellists consistently settled on a similar constellation of values.

The remainder of the afternoon was taken up by two Conversations – each on a particular issue area that had been previously identified by condominium owners and stakeholders to the Ministry of Consumer Services as being of concern to the Condominium Act Review. These conversations were led by two or three experts, who engaged in discussion with one another and Panel members. The first conversation focused on consumer protection for condominium buyers and was led by three condominium lawyers. They discussed disclosure requirements, deposit protection and Tarion Warranties, the ten-day cooling-off period, material changes, status certificates, and reinforcing the message that the Act was designed to provide the sector with a set of minimum specifications, intended to guide self-governance, and urged the Panel to think carefully about not only the benefits of further regulation but also the downsides of an over-regulated marketplace.

The topic of the day’s last conversation was condominium manager qualifications. The Panel was joined by the president of the Association of Condominium Managers of Ontario (ACMO), and the president/CEO of the Real Estate Council of Ontario (RECO). Both presidents shared their expertise.

After a very full day, the Residents’ Panel adjourned for a two-week break. In the interim, each Panellist was given homework: they were asked to talk to five friends, family members, or neighbours about the weekend’s discussion and about what others thought should be priorities for change in a modernized Condominium Act. They were also asked to review a second package of background readings that provided greater detail on topics discussed throughout Day 1 and introduced issues to be discussed on Day 2.

DAY 2: NOVEMBER 10, 2012

Panellists returned to Toronto, and greeted one another warmly over coffee and breakfast, eager to discuss insights and reflections that had occurred to them over the course of their two weeks apart. The Panel welcomed back host Peter MacLeod and the team of facilitators, who began Day 2 by checking in with Panellists about their homework. Panel members surpassed expectations by taking it upon themselves to consult with almost double the number of other condominium residents they had been asked to speak with. Panelists shared anecdotes and thoughts and discussed the challenges of trying to speak and work on behalf of others.

In the first activity of the day, Panellists returned to the guiding values they had suggested on Day 1. Together, they selected seven key values they want to see embedded in a modernized Condominium Act and worked in small groups to develop draft definitions of each of these values.

The values selected were:

WELL-BEING: The Act should facilitate the well-being of the condominium community within the broader community. This includes the well-being of residents, owners, and the neighbourhood. This includes protecting and enhancing the health, safety, security, and accessibility of all residents and owners.

FAIRNESS: The Condominium Act should balance competing interests and should apply to all, regardless of role or position. All members of condominium communities should have access to the necessary information, resources and supports to obtain the benefits described by the Act.

INFORMED COMMUNITY MEMBERS AND STAKEHOLDERS Community members and stakeholders (including residents, board members, lawyers, realtors, and condominium managers) should actively and consistently acquire the knowledge and develop the skills needed to effectively fulfill their respective roles. The Condominium Act should help ensure that condominium residents are provided with access to resources that equip them to be active and informed community members and to protect and enhance their quality of life in condominiums. Board members as well as condominium managers should remain current on best practices for condominium governance and management.

RESPONSIVENESS: All condominium stakeholders should be committed to addressing expressed and identified needs in a timely and effective manner. The Condominium Act should help ensure that all concerns raised are dealt with promptly, with deliverables completed within agreed-upon timeframes. The decision-making process should encourage responsiveness by being inclusive, transparent, informative, and legitimate while still allowing decision makers to exercise stewardship and take necessary actions for the health of the community. The Ontario Residents’ Panel to Review the Condominium Act 26

STRONG COMMUNITIES: The Condominium Act should support the creation of condominium communities formed of stakeholders, including developers, owners, residents, condominium board members and condominium managers on equal footing who have accepted the terms and conditions of joining the community and who are participating and cooperating toward the common good.

FINANCIAL SUSTAINABILITY: The Condominium Act should help to ensure financially sound management of condominiums using recognized standard accounting practices for predictably calculating future expenditures – including the costs of day-to-day maintenance and major structural renovation needs that will arise in the future.

EFFECTIVE COMMUNICATION: The Condominium Act should support timely, concise, clear, open dialogue among community stakeholders (including management). When questions or concerns are raised, responses should be prompt. Government also has a responsibility to communicate regularly to stakeholders and promote awareness about important issues and changes concerning Ontario’s condominiums.

After selecting their values, the Residents’ Panel then concluded the learning phase of the process with two more “Conversations” with guest experts. The first conversation focused on condominium governance and financial management. Three speakers joined the Panel: a Lawyer and past president and board of directors member of the Canadian Condominium Institute’s Toronto chapter; the founder and president/CEO of the Condo Owners Association; and the executive vice-president of a national engineering firm, who oversees the assessment of condominium reserve funds across the country. These three experts unpacked the ramifications of condominiums as not-for-profit corporations and reiterated the different responsibilities of condominium managers, board members, and owners. They illustrated some of the challenges of managing reserve funds for established condominiums and also discussed how certain new condominiums had creative fee structures that sometimes led to unexpected new costs for owners. They engaged in a thorough discussion with Panellists about the difficulties of proxy voting and quorum rules and discussed some of the communication challenges faced in certain condominiums.

After lunch, the Panel held its last conversation with experts – this time about dispute resolution. The Panel was joined by an experienced mediator and arbitrator at who has almost two decades of experience using alternative dispute resolution (ADR) tools to help resolve condominium disputes in Ontario. They were also joined by a senior policy analyst with the Housing Policy Branch of the Office of Housing and Construction Standards in the Government of British Columbia (another Canadian Province) who had been intimately involved in bringing into force amendments to British Columbia’s version of the Condominium Act, with a particular focus on the deployment of the proposed new dispute resolution process for B.C.’s condominium owners and residents. Each expert introduced the current process of ADR for condominiums in Ontario and discussed the subtleties and differences between negotiation, mediation, and arbitration. They suggested that one important goal of the Panel should be to “not make the situation worse” but instead to strive for simple, affordable, adaptable solutions in the area of dispute resolution.

With the learning phase of the Panel now complete, members were asked to work in small groups to literally “get all the issues out on the table.” Each group worked with a facilitator to write down on small issue cards all the issues and concerns that had caught their attention over the course of the learning phase – from speakers and background readings – as well as issues they had experienced themselves or heard about from their neighbours and friends. Groups then sorted these cards into six categories: Consumer Protection for Buyers, Condominium Manager Qualifications, Condominium Governance, Financial Management, Dispute Resolution, and an Other category for those issues that did not fit neatly anywhere else.

Panellists then organized themselves into six issue-area working groups. Panel members chose the issue areas that they wanted to work on most, and the group distributed itself fairly evenly among the six tables. Each group collected the issue cards for one of the six issue areas described above. In their last session of the day, the working groups were each responsible for taking the cards for their issue area and organizing them into a list of discrete issues. For the remainder of the afternoon, each group began to craft the first version of what would become a chapter of the Residents’ Panel Report. It was a first opportunity to begin organizing and discussing what they would like to say as a Panel, and the members took to the work with passion. By the end of the day, working groups had each formulated first drafts of their recommended directions.

DAY 3: NOVEMBER 24, 2012

After Day 2, Panellists were provided with a typed-up version of all the Panel’s work – the values with their definitions and the first draft of their recommended directions. Each Panellist was instructed to carefully examine the draft, noting down issues that were missing, gaps that needed to be filled, ambiguities that needed to be clarified, and contentious issues that needed to be discussed. Each member returned on Day ' armed with their copy of the draft, full of notes, additions, and comments.

At the start of the day, host Peter MacLeod(MASS LBP) presented the Panel with a series of large paper templates. Day 3 would be spent entirely focused on filling in these templates, which would form the scaffolding of the Panel’s Report. As Peter explained what was to be accomplished over the course of the day and how it would be done, Panellists were somewhat anxious about how far they still had to go but were also energized to begin.

Returning to their working groups, Panellists were instructed to spend the better part of the morning in intensive deliberations, working together and with the facilitators to fill in several template sheets. Each sheet would cover a distinct issue, and the several sheets completed by each working group would form the chapter on their issue area. In order to complete each template, the group had to give each issue a title; a premise statement that captured their understanding of the current situation; a values statement that identified which of the Panel’s guiding values needed to be strengthened in order to address the current situation; a recommended directions section that offered suggestions about what should be done; and a desired outcome statement that described what success would look like for the individual resident and for condominiums in Ontario.

Before lunch, each working group had an opportunity to present their work back to the whole Panel. After presenting what they had accomplished in their issue area, the Panel offered extensive comments and suggestions to the working group. Each group received constructive feedback about the wording of certain recommendations and made careful notes where they found important disagreements.

After lunch, each group took the Panel’s suggestions and spent several hours working carefully to incorporate feedback and arrive at a final version that would receive the approval of the whole Panel. Some Panellists moved from one group to another, helping to clarify and revise sections that had faced disagreements in the feedback session. They understood that the point-form descriptions they chose would be used by the Panel organizers to develop the Panel Report in the days to follow and so Panellists chose their words carefully.

The sheets were collected and bound together into an oversized book with a title page that declared it the “Draft Report of the Residents’ Panel to Review the Condominium Act.” A representative from each group took the podium to read their section out loud. As each chapter was read, many nodded as they noticed the improvements and appreciated the work of their fellow Panellists.

Day 3 ended with remarks from the Deputy Minister of Consumer Services. After hearing the draft report read out loud, the Deputy Minister expressed how impressed they were with the Panel’s work and stressed how important their contribution would be.

Peter MacLeod closed the session by describing how the Condominium Act Review would progress. Panellists were reminded that their report would be taken to the second stage of the review process, where experts would work together to formulate policy responses to the concerns and suggestions raised by the Panel, the Stakeholder Roundtable Meetings, and through online and mailed-in submissions. In fall of 2013, at the Residents’ Panel’s final meeting, Panellists would have the opportunity to review and provide feedback on the proposed options and recommendations that had been developed before reforms were presented to the government. Feeling both exhausted and proud, Panellists said their farewells and began their trips home – some around the corner and some across the province – satisfied with their efforts and pleased with the report they had produced.

Influence, Outcomes, and Effects

The Panel provided its view on a number of pressing Condominium Issues including:

• Resident Responsibility
• Information for new buyers, resale buyers, and residents
• Supporting board members
• Better communication for financial and governance issues
• Stronger measures on consumer protection for buyers, condominium managers, and dispute resolution
• The importance of strong communities

The Panel provided a number of Recommended Directions for the Review of the Condominium Act. The Recommended Directions included the following:

A. FINANCIAL MANAGEMENT:

• Establishing and Maintaining Adequate Reserve Funds
• Communicating Financial Information to Owners/ Obtaining Financial Information
• Communicating Financial Information to Owners/ Understanding Financial Data
• Communicating Financial Information to Owners/ Understanding Reserve Fund Studies
• Determining Condominium Fees

B. CONDOMINIUM GOVERNANCE:

• Fulfilling Roles and Responsibilities
• Ensuring Effective Communication
• Taking Steps to Ensure Ontario Residents’ Housing Needs are Adequately Represented by the Condominium Market

C. CONDOMINIUM MANAGER QUALIFICATIONS:

• Defining the Role of Condominium Managers
• Condominium Manager Skills
• Condominium Manager Accountability

D. CONSUMER PROTECTION FOR BUYERS:

• Informing Consumers Before Purchase
• Informing Consumers at the Time of Purchase
• Protecting Buyers After Purchase

E. DISPUTE RESOLUTION:

• Addressing Imbalances of Power
• Increasing Knowledge of Dispute Resolution Processes
• Resolving Disputes In-House
• Speeding Up the Dispute Resolution Process
• Healing the Building

F. OTHER RECOMMENDATED DIRECTIONS:

• Building Strong Condominium Communities[1]

After the Panel

Additional to usual Reference Panel requirements, the Panelists agreed to meet for a full weekend in fall 2013 for a final session. This meeting gave Panel members an opportunity to see whether their suggestions have been taken into account and how their suggestions had been acted on. At this final meeting, the Panel reviewed the proposed recommendations that had been produced in the second stage of the Condominium Act Review and then provide advice and commentary to the government.

Analysis and Lessons Learned

Participant Learning

The following is a quote from the Panel’s final report, which outlines the learning experience of the Panelists:

“Many experts came to speak with us: lawyers, real estate professionals, regulators, policy analysts, developers, mediators, representatives of owner associations, and condominium managers, to name just a few. We learned from them how complicated it is to write the laws that govern the purchase and ownership of condominiums, about what was in the current Condominium Act, and about how the Act has become insufficient to meet the needs of the current and future situation. We learned that the current Condominium Act had actually tried to solve many of the problems we had seen and experienced, but that changes in the number, size, and diversity of Ontario’s condominiums, as well as the way they are developed and operated, had overwhelmed some of these attempted solutions. We heard that industry and owner associations both recognize the need for change, and that building sustainable solutions is a challenging task for everyone.

We learned about alternative dispute resolution, enforcement, cooling-off periods, status certificates and material change rules. We learned about quorum and special requisition meetings and proxy voting. We learned about disclosure requirements (and how hard it often is to understand information in the form and language in which it is presented to owners and residents), and about the importance of good communication. We learned about the economics of the condominium industry, reserve funds, maintenance fees and special assessments. We found out that there are already ways to solve some of our concerns, if only we had known where to access the necessary information in the first place.

We didn’t always agree with everything the speakers said – they each had a somewhat different view and perspective. But we got many of our questions answered, learned a great deal about how the current Condominium Act works (or doesn’t) and heard about different ways to try to solve the challenges we are facing.

We also learned a great deal from one another. The experience of a panel member who lives in a 700-unit high-rise in downtown Toronto is very different from that of panellists living in a mid-rise in Thunder Bay or a low-rise in Windsor. We heard how some condominiums are dysfunctional but also how many are healthy and well functioning. Yet certain overarching issues and concerns exist for all of us. Our own struggles and successes gave us examples to work from, and so each of us brought to the panel our knowledge about how condominiums actually run here in Ontario.

Many issues need to be addressed by a modernized Condominium Act – in fact, we believe this Condominium Act Review is overdue. Yet we are encouraged by this collaborative review process and hope that it will find strong solutions. Further, we hope the government will monitor changes to Ontario’s condominium landscape going forward in order to ensure that, as new issues arise, solutions can be developed and deployed.”[2]

See Also

Citizen Reference Panel

Civic Lottery

References

[1] https://www.dropbox.com/s/zaldtkjqhgzuk3u/15.MCS_Condo.pdf?dl=1

[2] Final Report, available from https://www.masslbp.com/refpanels

External Links

Ontario Ministry of Consumer Services Reference Panel on the Condominium Act

Notes