Condo owners respond 

As critics respond to the Phase II report and readers send in their views, we will publish them on this page.

An expert's concerns

A condo director responds

A Realtor's views on the Act

Editor of CondoMadness

Betty—part II

MPP Rosario Marchese's views

A condo consultant's views

Tony Zale—owner from Brampton

Provincial Liberal party

Insurance industry's views on the report

Views of an ex-condo treasurer

Disturbing

CondoMadness Responds

An expert's concerns
Anne-Marie Ambert was one of the very few experts on the panel who was representing condo owners. She hosts the Condo Information Centre.

Here are her concerns about the Phase II proposals:

1. The recommendations on Financial Management allow for the accumulation by boards of unchecked large surpluses. These should be capped on a sliding scale depending on the size of budgets. Otherwise, condo monies will remain subject to waste, unwarranted expenditures, and fraud. This money belongs to the owners!

2. Neither do the recommendations allow owners enough control over very large expenditures in the general budget as well as in the reserve fund.

3. Despite the creation of a Condo Office, mediation and arbitration, which are costly and have failed until now, remain. We should get rid of these expensive processes.

4. Owners should know the names of the contractors who bid on expensive projects, such as renovations of common elements, in order to avoid the spread of bid rigging and other illegal activities that are currently afflicting too many condos.

5. The mandated brief courses for new Board members should be given online and from one central location: the Condo Office.

These courses have been of uneven quality in the past. In addition, they would generate revenues for the Condo Office. This would allow this Office to better serve owners and good boards--This will be your Office, your insurance, your recourse.

6. There is still no framework for the role that condo lawyers play. Currently, a powerful minority of condo lawyers too often ends up defending bad boards and managers against helpless owners, and they do so at owners' expense--paid by the corporation! Yet, these lawyers are supposed to represent the interests of the entire condo corporation.

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A condo director responds
25 September 2013
Betty is a long-servicing director at a large condo in North York. She has had many issues with over-crowded rented units, absentee owners, bad directors and apathetic resident owners. Her rebuttal:

I had to respond to Anne-Marie's comments.

1. The recommendations on Financial Management allow for the accumulation by boards of unchecked large surpluses. These should be capped on a sliding scale depending on the size of budgets. Otherwise, condo monies will remain subject to waste, unwarranted expenditures, and fraud.

I read the report.  It suggests that budget excesses or budget over-runs get reported to the owners.  So?

The answer to bothersome reporting to sleeping owners is: raise the budget so you don’t have any excessive costs!

If as a director, I have a surplus that could be clawed back, all I would do is spend like crazy during the last two months of the budget year, or pre-pay items—it's easy to hide or give away a surplus.

This lady has to learn that criminal checks, licensing, goofy three-hour on-line courses will never strain out the crappy directors or the crappy owners. The only things that work are voter intelligence, due diligence, carefully researched publicity and heckling.  Just like any government. 

2. Neither do the recommendations allow owners enough control over very large expenditures in the general budget as well as in the reserve fund.

So why elect a board at all?

Also, owners simply do not have the ability or the time to analyze properly.
No building would ever get anything done if we had to additionally spoon-feed lazy, arguing owners.

3. Despite the creation of a Condo Office, mediation and arbitration, which are costly and have failed until now, remain. We should get rid of these expensive processes.

M&A are required steps in the system for almost all legal disputes!  Why are we special?

The “Condo Office” doesn’t sound like it has any teeth either. You think people are going to obey some schlep over the phone? Of course not. I won’t. I will do what I think is correct for the situation.

4. Owners should know the names of the contractors who bid on expensive projects, such as renovations of common elements, in order to avoid the spread of bid rigging and other illegal activities that are currently afflicting too many condos.

That suggestion has no relationship to the problem.  Knowing the name of a company stops them from fleecing you? How? Everybody knows the name of the company anyway.

5. The mandated brief courses for new Board members should be given online and from one central location: the Condo Office.

I’m not taking some course from some government office or milk-fed subsidiary to do a volunteer job when I already work my ass off.

It’s a real insult. You are talking about multi-million dollar problems, and you think a three-hour course is going to even scrape the dust off the problem? 

Directors don’t even bother to read their own condo Rules after they get elected, you are not going to be able to FORCE people to take any courses either—and what could you teach them if they are illiterate in English?

You are going to give them English lessons as well?

Bad directors are the voters’ fault and the voters’ problem in ANY government.
 
If you don’t like somebody, you better have a good reason then kick him out.

Those lousy directors were elected, right or wrong, this is none of the Condo Office’s business and nothing will cure the problem except smarter owners who know where to look for the bugs in the cracks.

If condos are truly “the fourth level of government” no team would make such a vain and arrogant suggestion. Honestly, the whole idea is just so ridiculous.

These courses have been of uneven quality in the past. In addition, they would generate revenues for the Condo Office. This would allow this Office to better serve owners and good boards—This will be your Office, your insurance, your recourse.

Oh, please. Just like all the wonderful government offices that already employ ignorant, flippant clerks and keep you on hold for half an hour.

I wouldn’t pay any attention to a Condo Office. I would do what has to be done because as a director, I AM RESPONSIBLE and the Condo Office isn’t.

6. There is still no framework for the role that condo lawyers play. Currently, a powerful minority of condo lawyers too often ends up defending bad boards and managers against helpless owners, and they do so at owners' expense--paid by the corporation! Yet, these lawyers are supposed to represent the interests of the entire condo corporation.

Who cares what happens to lawyers? The less work they get from condos, the better. Don’t bring out the violin with the “defending bad boards helpless owners” routine. That’s only half the time.

The other half of the time, it’s terrorist-owners deliberately destroying the lives of other residents.

Owners and directors have to watch lawyers, they have to watch engineers, they have to watch management companies, they have to watch.  Anybody will take advantage of you if you’re gullible or lazy. You can’t legislate honesty, you can’t legislate ownership interest.

I noticed that the Condo Office “Team” doesn’t even understand that management offices and boards should NEVER speak to tenants. To do so promotes irresponsible non-resident owners.

Hey, if you’re a landlord, you do the talking to management and you orientate and supervise your tenants and we will tell you if you screw up. That’s all we will do.

No resident-owner would pay management to help landlords make money? Come on. This part of the report shows that the team isn’t really aware of the financially parasitic problems that non-resident owners and foreign owners dump on resident-owners.

There were some really smart ideas in the report (like lowering the quorum and the voting thresholds!  If people cared, they would show up—they had their chance to show up, they didn’t, so the decisions are made by the minority who has proven they care).  Great idea.  Finally.

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A Realtor's views on the Act
Charles Hanes
Excerpts from his blog: (Some Of The More Glaring Pitfalls In CondoLand Being Reported To Revolve Around Fraud and Embezzlement Simpleycondos.ca)

I frequently receive emails from readers complaining about unethical conduct of property management companies and, worse than that, complaining about unethical Board of Directors!

So we have a materially flawed Condo Act, an adversarial and, quite frankly useless, Tarion Home Warranty Program, Property Managers compromising the integrity of operating buildings to satisfy developers (from whom they are hoping to get future contracts) and outright stealing the condos money, plus members of the board of directors compromising the integrity of the condo for personal gain!

It is time that we get straight that holding "Commissions" or "talks" of panels consisting of academics and well meaning bureaucrats and/or politicians, is simply buying into the game as orchestrated by the developers and their lawyers.

There simply has to be a way that the consumer can be protected!  It can only be done through a complete re-do of the Condo Act, and a revamping of the Tarion Home Warranty Programs, Property Management Companies must become licensed and regulated, and oversight must be built into the operations of condo corporations.

As it is today, the board is it!  Few owners attend any meetings let alone the Annual General Meeting (AGM). As an owner don't you think that you owe it to yourself to oversee the single largest investment that most people make?

So yes! There is fraud and potential embezzlement rampant in CondoLand.

And the only person that stands a chance in fixing things is you … Mr./Ms. Consumer!

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Editor of CondoMadness
26 September 2013
There is a lot of good that is contained in the Phase II report. However, we will have to see how the legislation is worded and who will be appointed to work for the Condo Office.

I am still reading through the full report but here are the first major concerns that I have:

Green initiatives
The expert panel proposes that reserve funds should be accessible without unit owner approval for green energy projects.

I don't like this. There are a lot of shady deals & kickbacks-commissions that can occur with green energy contracts and that, no matter their promises, too many of these schemes don't pay for themselves within a reasonable period, if ever.



Green energy has a history of failures. Remember the natural gas powered buses that the TTC was pressured into buying? Then there are solar panels and wind turbines that jack up costs for unreliable electricity supplies.

Energy reseller contracts have proven very expensive for many condo corporations and green roofs many cause structure failure and water penetration problems for years to come.

Boards can be bamboozled into supporting these schemes and reducing owner approval for these programs can lead to serious abuse.

Relaxing voting requirements for by-law changes
The lawyers make big money dreaming up by-law packages for condos and unfortunately some law firms slip in bylaws that give extra protections to the board and makes it easier for the board to lien the owner units and hit the owners with excessive legal costs that judges found to be excessive.

The Expert panel want to allow 2/3's of a minimum of 25% of all owners at a meeting to be allowed to change the bylaws. That means as low as 16.5% of the owners can change the condos bylaws with potentially very serious consequences.

Making it easier for condos to change the bylaws may create unlimited abuse and huge profits for the lawyers who back these changes.

Democratic participation
Although candidates and their workers for municipal. provincial and federal elections are allowed access to condo buildings to canvas the voters, there is no mention of providing similar rights for candidates and campaign workers for owners who want to campaign for condo elections or to requisition an owners' meeting.

Examining records
The experts want a fee charged for retrieval and redaction of all but the basic documents. This will lead to endless abuse by managers and boards.

Owner-occupant director position
The experts want to get rid of the owner-occupant position on the board.

In condos where there are commercial units and/or large numbers of absentee owners, the owner-residents need to have at least one position on the board.

The election procedures in not that complex and is a small price to pay for the owner-occupants from being guaranteed a position on the board.

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Betty—part II
27 September 2013
Dear editor;

I am DEAD-SET against this Condo Office, another layer of ignorant, naive, gossipy, evasive, social-media government.
 
They need to clarify the legislation FIRST, then the Office develops naturally from the legislation. They are doing things backwards.

I am getting out of condos. I've had five and I've had enough. I have worked my ass off for seven years.

These "Team" clowns have no idea what it's like to run a constantly trespassed, high number of rooming-house rentals, vandalized, puke-soaked luxury condo building in North York.

Yet we keep the common expense fee increases constant at 0% for our princes and princesses who half the time don't even live in the country and wouldn't lift a finger even if they wanted to because they don't speak English and THEY TELL YOU that condos in Ontario run the same way as condos in China.

Not only that: on the makeup of the "Expert Team", I have had horrific personal experience with a couple of them, who have no concept of ethics whatsoever. None!

They picked prominent people, but the "Expert Team" did not follow their own advice: INVESTIGATE YOUR MEMBERS!

Have your team members had previous ethical brushes? If so, of what nature and what was the outcome? What do they say they want and why do they really want it? The government just invited a bunch of prominent "experts"—who do not necessarily have clean noses themselves. It's just so ridiculous; I can't believe it.

"Access to information" improvements for owners? I WISH OWNERS CARED! In seven years, TWO PEOPLE OUT OF OVER 1,000 have asked to see the minutes, and they didn't know that the minutes actually don't tell you anything, you have to look at certain financial statements.

See you as soon as I sell my last condo! I did sell the second-last one.

Yes I filled in the survey immediately, not that it does OUR CONDO CORPORATION any good at all.

Betty

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MPP Rosario Marchese's views
27 September 2013

Condo Office should serve owners — not lawyers, consultants & developers
QUEEN’S PARK – Following the release of the second report by the government’s Condo Act review on September 24, Trinity-Spadina MPP Rosario Marchese asked the Premier when the government plans to put the needs of condo owners ahead of lawyers, consultants and developers.

The report proposes two dispute resolution mechanisms. Small matters would be heard by a “Quick Decision Maker” and settled, while larger matters would go to a “Dispute Resolution Office,” which would offer only an assessment, no settlement. For disputes between condo owners and developers, the report says the “present model works reasonably well.”

“In other words, you’re on your own, and good luck in court,” said Marchese.

 “This process continues to work well for consultants, lawyers and developers but not for condo owners,” Marchese continued. “Will the government put condo owners first?”

The report also says condo owners would pay a levy of up to $36 a year to support the condo office, plus user fees. For 600,000 condo units, the office would cost condo owners over $21 million a year, about the same net cost as the Landlord and Tenant Board. But unlike the Board, the Condo Office would not settle all disputes.

“If condo owners must pay the same costs as the Landlord and Tenant Board, shouldn’t they get a condo tribunal that can settle all their disputes like the Landlord and Tenant Board?” asked Marchese.

Marchese said the report sees condo issues through a very narrow lens, pointing out that the review’s “Expert Panel,” which selected the report’s final recommendations, is dominated by people with close ties to two condo industry lobby groups, the Canadian Condominium Institute and the Association of Condo Managers of Ontario. Other “Expert Panelists” include the First Vice-Chair of BILD, the development industry lobby, and a former CEO of Tarion, which is controlled by the Ontario Home Builders’ Association, the construction industry lobby.

On Page 30, the report suggests that the new Condo Office could be operated by either CCI or ACMO.  (Let's check.)

"the working group has considered several models, including a government organization staffed by public servants and an office run by one or more non-governmental organizations, such as the Canadian Condominium Institute (CCI) or the Association of Condominium Managers of Ontario (ACMO). The group has ultimately taken the view that the new organization needs some independence from government, but that government should provide oversight to ensure that the body is impartial, transparent and accountable."
page 30 from the report

(This sounds like the making of another Tarion.—editor)

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A condo consultant's views
29 September 2013

To: Participants of Ontario’s Condominium Act Review
Re: Initial comment regarding Ontario’s Condo Act Review—Stage Two
       Solution Report

It is very obvious that here has been an incredible amount of excellent work for those involved with the ongoing condo act review process, I would like to thank everyone for their participation especially to those who have volunteered with no compensation. THANKS.

I have every intention to spend more time reviewing the Stage Two Solution Report in order to prepare my comments on a variety of subjects. Unfortunately there is one recommendation in which I feel compelled to immediately address because I perceive it to be a significant recommendation error.

The recommendation for changing the procedure for substantial change.
Correct me if I am wrong, but based on the recommendations it appears the percentage will go from 66.6% of all owners to a minimum of 17% to 22% depending on which recommendation (expert panel vs. working group) is possibly accepted.

I would also like to address a statement in the report which I feel is extremely misleading. The report states ‘the high threshold often prevents boards from carrying out work that needs to be done’. I am not aware of one example where substantial change is mandatory for boards to carry out their legislated duties.

In my humble opinion the Act must protect condominium owners (consumer protection) that their condominium corporation physical structure, amenities, services and financial obligation remain relatively status quo.
The recommended 66.6% of either 25% or 33.3% of attendees (persons/proxies) at a meeting is a recipe for disaster.
One must remember the average size of a condominium corporation in Ontario is 70. Assuming the recommendation is included in the new Act this means (taking the average size of 70 units) rather than 47 owners in agreement for a significant change this figure will be lowered to a minimum of 12 to 16 owners.

When I operated my own management company my average condominium corporation stood at 30 units and in these cases, substantial change could be approved by as little as five to seven unit owners.

I personally (as a condo owner) and professionally liked the current 66.6% of all owners to agree to a substantial change as is the case now. I realize and have personally experienced that this percentage is very difficult to achieve but if owners (via Board of Directors) wanted change then they and management had to work hard for it by educating and engaging all owners in order to obtain the 66.6%.

People, for whatever reason, dislike change (big time) and in my career I would have to say change (no matter how small the issue) would had to of been one of my most difficult challenges to deal with.

As a manager, once the 66.6% was confirm, I felt extremely comfortable in carrying out the various tasks at hand and deal with a few disgruntle owners. It is hard for the disgruntle owner to argue against a significant majority (66.6%) of their fellow owners who have accepted the change in a democratic manner. Bottom line, it is fair.

(Note: Even if the recommendation was lowered to 51% of all owners, I would still be reporting my concern because I truly believe 51% is not sufficient to make a substantial change to a condominium corporation. We have to protect what owners originally purchased, anticipated and financially planned for.)

Rather than lowering the percentage to ease the substantial change procedure more effort must be made to increase owners’ engagement which is really the ultimate goal for any well run Condominium Corporation.

The recommendation is counterproductive to one of the most important common themes as noted in the Executive Summary ‘Engagement: Many condo community members, especially owners, feel that they have no real power over the decisions and actions of boards, managers and developers.
As a result, many of the reforms set out in this report aim to create the conditions for more meaningful owner engagement and participation.’

Why not consider three ideas which I presented in my first submission;

1.	make voting mandatory. This was recently done in Australia and turnouts have soared to 91% as a result. This idea was put forward by an attendee in Session One in Toronto
2.	allow owners who knowingly recognize they will not take participate in any role opt out of any voting, and be eliminated altogether in the total of the number of units
3.	embrace technology and allow on-line voting.

Please reconsider the recommendations for changing the procedure for substantial change.

Thanks for the opportunity to express my concern.

Sincerely:

Tom LePage FRI, CPM, RCM, ARP.
LePage Condominium Consulting
tom@lepage.biz
www.condominiumconsulting.net

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Tony Zale—owner from Brampton
30 September 2013

I see among the 'experts' there are a number of guys and one gal that belong to AMCO. Asking the cat to look after the canary.

Owner—Toronto
30 September 2013

Who is this Tom LePage guy? Smart guy. Solutions #1 and #2 are brilliant and they would work!

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Provincial Liberal party
31 September 2013
I had a long talk with a delegate at last weekend's Liberal party provincial council meeting in Hamilton.

The Phase II recommendations to the Condominium Act was not a topic that was discussed; hell most MPPs and delegates were not even aware of it.

So what is on the Liberals' minds? Nothing less than the next election.

So what is the Liberals' platform? New taxes to pay for transit improvements and youth unemployment. Anything else? A scheme to ask the people of Ontario to add ideas to the party's new database called Common Ground.

If nothing else, it is a method of gathering personal information on political junkies in time for the next election.

The Liberal party's goal? Stay in power for another ten years.

The next election
Elections Ontario are getting prepared in case of a snap election called this fall. If there is no election, they will be holding training sessions during the four weeks between the middle of January to the middle of February.

editor

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Insurance industry's views on the report
30 September 2013

In this article, the insurance industry gives us their view on the Phase II report.

It has a whole different way of looking at the changes that are being proposed and it appears that they like what they are hearing. We need more reports along these lines.

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Views of an ex-condo treasurer
Enver Khorasanee
Brampton
02 October 2013

I take this opportunity to congratulate experts in the panel for the very thorough and extensive work done. Kudos to each of you. However, here are some changes or additions etc. that I would like to suggest.

•	Push hard to create Condo Office. Unscrupulous boards and property managers have used the corporation’s lawyer to help intimidate, and downright harass hapless owners.
•	There are some condos that clearly show that their financial situation is going from bad to worst and yet not a word of caution is shown in the monthly financial reports. Is this the reason they say ‘un-audited’. Much left to be desired.
•	The mandated training courses for property managers is one of the best ideas to come out of this session. Every profession has this so why should this profession be an exception? Ignorant and or unscrupulous actions by property managers have devastated many lives. I personally know of many that I now call this the Silent Tsunami.
•	On page 9 of the report it suggests that a board member may be disqualified if he/she has a criminal record only if finances is involved. What if that person is involved in say, sexual crimes or battery and assault?
•	Throughout this report the common theme is OWNERS APATHY. A large number of owners come from countries where they are not exposed to democracy. This is a challenge and a very serious issue. If this malaise is beaten then there will be no need to change the Act. In all seriousness I am not exaggerating. Therefore, owners should be fined if they do not vote in person or by proxy at owner meetings.
•	No more than 30-40% of the owners should be allowed to resort to proxies. Furthermore no proxy holder can represent more than five or six owners.
•	It is widely practiced that the Certificate of Status is given to the buyer well after they have committed to purchase the property. Even though a buyer may be allowed to back out, often the hassle it will create is enormous for all parties concerned. I have knowledge of a condo that is issuing two year old financial statements with the Status Certificates.
•	Proper and timely education of buyers will avoid a lot of future problems. Teaching buyers and even present owners how to read the financial reports can go a long way into creating informed owners. One cannot stress enough on this matter of knowing how to read the financial report.
•	Board meetings must be conducted monthly  and the minutes must be distributed to all owners and posted in the elevators and in the lobby.
•	Lastly I think it will be a great if the Phase II recommendations were printed in the province’s major dailies.

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Disturbing
11 October 2013

I am very disturbed by how this condo act revision is going.

These Phase II are relying on spotty anecdotal evidence to make their recommendations—they don't even know who, how many, where and what size the condo corporations are in Ontario.

They get a measly 63 complaints out of hundreds of thousands of units and suddenly they have this huge buffet of self-peddling purported experts?

I think they are completely jumping the gun, over-reacting and they should start at the beginning. The first thing you ever do is take inventory, and they haven't even done that yet, they have no idea what they are actually and truly dealing with. What they really need is a cold-blooded statistician. 

Stupid question: why are they starting with the Condo Act? What good will anything do unless they get a better Tarion? I really think they are starting at the wrong end of the dog, they should feed it first before they take it for a walk.

Betty—North York

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CondoMadness Responds
22 October 2013
I have wrote my opinions on the Stage II "Experts" report and sent it to the Ministry. If you e-mail me, I will forward you a .doc file containing my criticisms of a few of the report's suggestions.
contact@condomadness.info


I have included CondoMadness's Word doc on the website.


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