Condo Act
doesn't need major revamp
SPECIAL TO THE TORONTO STAR
Bob Aaron
03 August 2012
In June, the McGuinty government announced a public consultation
process to “modernize” the 1998 Condominium Act to meet the needs of
owners, residents and other stakeholders in the rapidly-evolving
industry.
The announcement came on the heels of repeated attempts by NDP MPP
Rosario Marchese to introduce his badly-flawed Bill 72, the Property
Owners’ Protection Act, 2012.
In an interview last month with the Toronto Star’s NewInHomes.com,
Marchese provided some background on why he introduced the new
legislation and his goals for the act.
He explained that he created the concept of a condo review board
tribunal to protect consumers against “shoddy construction.” I may be
missing something here, but Ontario already has a superb program in
place which gives consumers the best warranty protection in the
country. Why waste time reinventing the wheel?
This
is the first time I have ever heard of Tarion being called
“superb." —editor
Since 1976, the Tarion Warranty Corp. (tarion.com)
has operated under
the authority of the Ontario New Homes Warranty Plan Act. As a past
board member and current chair of its consumer advisory panel, I
believe Tarion is working well to protect consumers. It has a
multi-million dollar warranty fund, and its annual consumer surveys
indicate a very high degree of approval by new home buyers.
It
is extremely important that you describe your serious conflict of
interest. You are defending a warranty program that you work for. Your
defending Tarion is like Ronald McDonald stating that, as a well-known
authority on hamburgers, he can claim that the Big Mac is by far the
best burger in the world.—editor
Without any
meaningful consultation with Tarion about its cost or operational
implications, Marchese would superimpose a review board or tribunal on
top of the existing warranty program. Given overlapping functions, how
the two could possibly work together completely escapes me.
Marchese also proposes to expand the Tarion warranty coverage to
include condominiums converted from previous uses such as a factory or
a church. While this is indeed a laudable goal, no thought appears to
have been given to the cost implications of extending coverage to
building conversions, and the impact on the warranty fund of providing
this protection.
Mr.
Aaron is stating very clearly that the materials and workmanship that
the builders put into conversions is so poor that Tarion could not
warranty them without suffering from high expenses. I agree that some
of these builders have to build better homes. —editor
At present, Tarion has a three-stage warranty for one, two and seven
years depending on the nature of the warranted item. Again, without
consideration of costs or implementation complexities, Bill 72 proposes
to extend much of the one-year warranty to five years. Consumers, of
course, would be stuck with the anticipated costs at the time of
purchase.
I
can get a five-year extended warranty for an inexpensive Korean car and
on cheap appliances made in China but Tarion feels that it would be too
expensive to offer a five-year warranty on an brand new and very
expensive Canadian-made home? —editor
In May,
Marchese told CBC News; “The fact of the matter is that the Condominium
Act doesn’t have any consumer protection whatsoever.” Those of us who
work with the legislation on a daily basis know this is simply not
true. To say this demonstrates a complete misunderstanding of how well
it really does works.
I side with Marchese on this one.
—editor
There is a significant difference between the Condominium Act and the
Ontario Building Code, and no matter how much Marchese wants to change
the condo legislation, construction issues fall under the Building Code
and the Tarion legislation, not the Condominium Act.
In his proposals, Marchese wants to “update sound insulation and noise
protection standards to ensure a more peaceful, quieter living
environment.” But this clearly is a building code matter and not an
issue for the Condominium Act.
I agree
with Mr. Aaron that these are two
different Acts. So lets strengthen both of them. —editor
Under the current Condominium Act, builders are responsible to buyers
for any shortfall in their marketing budgets for a period of one year
after a building is registered. Marchese proposes to extend this to
three years without any explanation of how builders could possibly
predict operational costs and utility charges so far into the future.
Buyers would inevitably pay for the shortfall one way or another.
Purchasers
would better off knowing their true
costs up front instead of having the builder hiding them until Year Two.
—editor
Rather than a blanket reform of a law which is, after all, only 11
years old, I am hopeful that the government review of the act will
result in some minor tweaks so that court interpretations in disputed
cases will be more consistent.
I also look forward to changes in the areas of condominium manager
accreditation, better consumer protection for buyers at the time of
purchase, clearer rules for managing finances and reserve funds, and
improved procedures for transparent governance of condominium boards.
Rosario Marchese and I
want all of this too. —editor
But the McGuinty government has it right; it is crucial to have a broad
consultation with all the stakeholders first.
I think Bob Aaron is talking about
the industry's special interests, not the general public that is paying
for everything.—editor
Bob Aaron is a Toronto real estate lawyer and consumer advocate. He can
be reached at bob@aaron.ca.
Visit his website at aaron.ca.
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