The House met at 9 a.m.
House in committee of the whole.
Consideration of Bill 103, An Act to revise the Condominium Act.
Hon. Mr. Drea: I want to make a general statement, Mr. Chairman, outlining a number of amendments that will be introduced.
As a result of the thorough deliberations of the justice committee and subsequent discussions with the Federation of Ontario Condominium Associations, we are proposing certain changes and amendments to Bill 103, the new Condominium Act.
These include the deletion of a requirement to disclose the original cost of those items for which a reserve fund is required. A committee amendment requires that when a developer turns over certain documentation and information when a majority of the units have been sold, the original cost as well as current replacement cost and life expectancy for such items as elevators and heating plants must be disclosed. We feel, and the condominium federation agrees, that original cost is redundant and only current replacement cost and life expectancy are really relevant.
As to the quorum required to pass a bylaw, the committee amended this to allow a bylaw to be changed by two thirds of the vote at a meeting attended by half the unit owners. In other words, one third of the owners could change a bylaw. At the request of the federation, we propose to raise the requirement for confirmation to 51 per cent of owners.
We will be including a definition of auditor; the federation asked for this and my predecessor made a commitment that it would be done. We will also be introducing a number of housekeeping amendments to section 1, as well as an amendment to cover a printing error. The committee had set aside that section to the end of the hearing and then did not have time to consider it because of time constraints.
Also included is a clause giving Condominium Ontario the power to exempt a corporation from further contributions to the reserve fund if sufficient money is available to cover anticipated repair and replacement costs.
Further, we included a requirement that developers contribute to the financing of Condominium Ontario. This contribution can be collected when a builder registers under the HUDAC new home warranty program. We have been in touch with HUDAC officers who will take up the matter with their board. I am confident that approval will be forthcoming without delay.
We have been moving ahead on an expanded estoppel certificate and we will have it ready when the act is proclaimed. Estoppel certificates were originally developed to inform purchasers of any arrears in common expenses against the unit they might want to purchase. The certificate was used as a mini-disclosure document setting out pertinent information a purchaser would need.
We propose to expand this consumer protection aspect to provide more disclosure in the body of the certificate and accompanying documents. The new aspects of disclosure in the certificate include: the amount of reserve funds; any contemplated substantial additions, alterations or improvements to or renovations of the common elements, or any substantial changes in the assets of the corporation; whether the corporation is party to any litigation; any deficit or surplus in the common expense account; the name, address and telephone number of the property manager and the term of the management contract; the names, addresses and positions of the board of directors and officers; the current mailing address and address for service of the corporation; a statement that the corporation has secured adequate insurance.
Because the certificate will refer to a particular unit rather than to all units, the information concerning common expenses will disclose whether the corporation will be levying a charge for repairs against that particular unit.
In conjunction with the estoppel certificate, the corporation will be required to provide copies of the latest financial statements of the corporation, the current budget statement, the declaration, the bylaws and the rules; and in order to offset some of the costs involved, a corporation will be able to charge a fee, which is not to exceed $25.
These additional disclosure requirements are very much in keeping with our original intent to make the new Condominium Act a sound piece of consumer protection legislation; I commend the amendments to the honourable members.
Mr. Deputy Chairman: Mr. Minister, you have given notice of an amendment to section 1. Would you like to move that amendment?
Mr. Breithaupt: Perhaps it would be convenient if the minister placed all the amendments to the various subsections and we could discuss them together?
Mr. Deputy Chairman: All the amendments to section 1?
Mr. M. N. Davison: I also have an amendment to section 1(1) which falls part way through and at the end of the order of the minister’s amendments. Should I hold my amendment until after we have done all of this?
Mr. Deputy Chairman: Yes, but would you send a copy to the table so we can get them in proper order?
On section 1:
Hon Mr. Drea: I will move this first amendment and then I will file the rest of them, because they are all attached.
Mr. Deputy Chairman: Hon. Mr. Drea moves that section 1(1) be amended by adding thereto the following clause:
“(a) ‘auditor’ means a person licensed as a public accountant under the Public Accountancy Act”; and that the present clause (a) be relettered as (aa).
Hon. Mr. Drea further moves that section 1(1)(i) of the bill be amended by striking out “including the rents, profits and revenues on account of the common elements” in the second and third lines.
Hon. Mr. Drea further moves that section 1(l)(t) be amended by striking out “annual” in the fourth line and inserting in lieu thereof “owners.”
Hon Mr. Drea further moves that section 1(1)(w)(ii) be amended by striking out “a vote of” in the first and second lines.
Hon. Mr. Drea further moves that section 1(1)(y) be amended by striking out “at the time” in the fifth line and inserting in lieu thereof “in accordance with”; and by striking out “are registered” in the sixth line.
Mr. Minister, do you wish to speak to these amendments?
Hon. Mr. Drea: No, Mr. Chairman. I think the statement covered them.
Mr. Breithaupt: The whole problem with respect to the matter of the auditor had been discussed quite thoroughly at the time of the hearings on the bill. The purpose here is to have a definition so it will be clear to the corporation officers and the condominium owners that the term auditor means a particular person with particular qualifications. The other amendments that have been made are housekeeping matters; I am content to accept the other amendments which the minister has moved.
Mr. M. N. Davison: Mr. Chairman, I’m at a loss. Are we debating the minister’s amendment which creates a new clause (a); or are we debating all four or five of the amendments the minister has moved?
Mr. Breithaupt: I’m content to deal with them all because I find them satisfactory. If other members want to talk on any particular one of them, please --
Mr. Deputy Chairman: I will deal with this as one motion, unless any member objects; in which case I will deal with them as five motions and deal with them one at a time.
Mr. M. N. Davison: I have no objection to dealing with it in that fashion as long as it’s still possible to move an amendment to a clause which the minister has passed by.
Mr. Deputy Chairman: You are giving notice of further amendments to section 1 and I will take those after the minister’s amendments, even though they are different numbers.
Mr. M. N. Davison: I have no objections to any of the minister’s amendments to section 1(1). Almost all of them serve to clarify a problem, define a problem or make things easier for the people involved.
Motions agreed to.
Mr. M. N. Davison: I have several amendments to section 1, Mr. Chairman. Shall I move them all at once?
Mr. Deputy Chairman: Take them one at a time, please.
Mr. M. N. Davison: One at a time?
Mr. Deputy Chairman: Mr. M. N. Davison moves that section 1(1) of the bill be amended by adding a new clause (qa) as follows: “(qa) Principal means a person owning at least 10 per cent of a corporation or a person who in conjunction with his immediate family owns at least 10 per cent of a corporation.”
Has the member for Hamilton Centre numbered this (qa) because he wants it to come after clause q?
Mr. M. N. Davison: Yes.
Mrs. Campbell: Is this normal course?
Mr. M. N. Davison: The amendment is moved in the definition section because the word “principal” is used in an amendment I intend to place later on in the bill, specifically in section 52. That amendment would require that a declarant or proposed declarant in the statement outlined in 52(6) set forth a list of all other condominium projects he has developed or registered; and it would also require that when the declarant or proposed declarant is a corporation that they list all other condominium projects they have registered or any other condominium project registered by an officer, director or principal of that corporation or any other corporation with a common officer, director or principal.
The amendment is similar to one put in committee. It was carried by the committee, although the government later objected to the fact that some of their members were absent. The government then moved to delete the entire disclosure section, providing no protection or information whatsoever, to the prospective purchaser. With the assistance of the two opposition parties, they were allowed to have that vote taken again and because there was never an opportunity for a clear decision in the committee, I move this amendment again in this series of amendments.
Mr. Makarchuk: Mr. Chairman, I think I would like to ask the government to support this amendment. Basically, the idea behind it is to provide protection for people and also some knowledge to the government or the people who are dealing in condominiums about the track record or the past performances of people who have been involved in the business.
Specifically, during committee, we’ve had examples where a builder would have one condominium which would be developed and there would be a considerable amount of problems with that particular project. At the same time, the same builder is putting up another condominium across the road which more than likely will have the same type of problems or will cause or create problems to the people who will eventually move in.
This, in effect, will provide protection for people so that they can at least look at who the principals are in the project and look at their past performance and perhaps be a bit more cautious about entering into any kind of a contract with them, or cautious about taking up residence in the project because the past performance of these people was not exactly what is really desired in the operation.
Mr. Breithaupt: With respect to the amendment, I would speak against it. I think that nowhere under the Corporations Act do we require minority shareholders in private companies to explain or advertise their own particular investments. It may well be that one project may not be successful and well constructed and a second one may be quite thoroughly done, If a person has made an investment in both of those projects that person may be as concerned as any purchaser of a condominium unit in the project. I think it is an unnecessary interference and, frankly, I don’t see that it brings forward useful in- formation to a person who buys a condominium unit.
Mr. Philip: Mr. Chairman, I would hope that the member who has just spoken would at least take the time to discuss this particular amendment with some of his colleagues. Certainly, some of his colleagues have expressed the opinion that this amendment is needed. We have companies that seem to fade in and fade out. I have developers who have informed me that they are pretty much upset with certain companies that seem to phase in, that create large costs on the home warranty program and that we can never really track who they are. When one calls the HUDAC people they don’t seem to know who the principals in certain companies are, and surely this would give us some safeguard in an industry that seems to have these shadow companies coming and going all the time.
Ms. Gigantes: At this stage I really can’t believe what the critic for the Liberal Party is saying, that it’s not necessary, when we know it’s been necessary for condominium owners to find out who is building condominium corporations. We know that individuals making purchases in those corporations have been fleeced, to put it mildly. They’ve had thousands of dollars of losses because they haven’t had the necessary information to avoid purchasing in developments that have been constructed by developers who are fleece artists. We have to be able to provide that information to the public.
Very often in the purchase of a condominium a family is acquiring its first home and the experience of having previously bought a house is simply not there. Lawyers are not giving enough information to give individual families or individuals protection when they’re buying into condominium corporations, and it’s vital for the public to have that knowledge. We can provide it in no other way, it seems, since HUDAC is not doing it, and it’s vital that it be in this bill.
Mr. M. N. Davison: I’m not quite clear as to what the Liberal position is. My recollection in the justice committee was that the Liberal members supported an amendment virtually identical to this. I’m not sure whether the member for Kitchener was speaking on behalf of his caucus or individually. I would like him to perhaps respond to that concern. If he is however speaking on his caucus’ behalf, if we simply remove the requirement of the principal as a person owning 10 per cent of a corporation, would that satisfy the concern raised by the Liberal Party and could we achieve at least that much protection to people in this marketplace?
Mr. Pope: I rise to speak against this amendment. It seems to me that the members of the New Democratic Party throughout consideration of this bill have really been directing some attention towards what they consider to be problems with the home owners’ warranty plan. I believe we have indicated during the course of bearings on this plan that during the past period of time HUDAC has revoked 281 registrations and there are other decisions pending on 90 of them.
Mr. Philip: How many of those guys are back in business under a different name?
Mr. Pope: It seems to me that if we are dealing with the problems of defects to the premises which are readily known on inspection, that’s one issue. It seems to me that if we are talking about hidden defects of a major nature, we have protection for the purchasers in the new Condominium Act related to reserve funds. It seems to me that when it gets right down to it, the New Democratic Party has this burning desire to know. If the use that the New Democratic Party has put to the Corporations Information Act is any experience --
Mr. Philip: Why do you want to protect the ripoff artists?
Mr. Pope: -- the fact is that once they have put all these disclosure provisions in legislation they never refer to it after that.
Mr. M. N. Davison: Are you afraid of knowledge?
Mrs. Campbell: I would like to just respond to some of the statements of the parliamentary assistant. There is no question that the problem here has been with the HUDAC program, the home warranty program. We had horror story after horror story in committee indicating that because one could not basically trace people who had been involved in previous condominium developments, there was no protection under the home warranty program. There still isn’t. This is the problem with this bill throughout. I can understand the technical approach and I think it is proper so far as corporation law is concerned, but the difficulty is that we are dealing piecemeal with a very major problem in this industry.
The assurances are acceptable. I understand that there are going to be some changes but we haven’t seen them, we don’t know. This is the reason for the concern that is expressed here today, not just by the New Democratic Party but certainly by the Liberal caucus as it sat in committee. My colleague has, of course, accepted the fact that there will be future changes. It doesn’t lessen our concern, however. I would like to make that absolutely clear.
Mr. Philip: Are you for or against it?
Mr. M. N. Davison: If I could extract from the Liberal Party members their position on the amendment I intend to place later I would be quite willing to consider changing it to meet their needs. Is the Liberal Party opposed to the declarant supplying the purchaser with a list of other condominium projects that he has built? Is that the part of the amendment that the Liberal Party opposes? Don’t sit there like a great toad. Answer.
Mr. Deputy Chairman: The member for Hamilton Centre is speaking. It’s up to the member for Kitchener to reply if he chooses.
Mr. Breithaupt: In my view the matter of principal disclosure is not useful to the person who is purchasing. I believe that the unit purchaser will, under this bill, now have a much greater variety of information than was ever given before. I believe the information will he more thorough and will explain the operation of the project in which the proposed purchaser is interested, and I think that is sufficient.
Mr. M. N. Davison: If I were to remove from the bill the requirement to disclose the principals behind the corporations would that satisfy the Liberal Party, and would you then support that amendment?
Mr. Deputy Chairman: Might I point out to the members of the committee that we are now only dealing with the definitions section. We’re not dealing with the proposed amendment that may come later on. I might suggest to the member for Hamilton Centre possibly he would like to stand down this amendment to the definitions section until we reach the relevant clause in the bill and at that time, with the consent of the House, if his amendment carries we will come back and amend the definitions section to implement his amendment. Would that be acceptable to the House?
Mr. M. N. Davison: I would be quite pleased to follow your suggestion. It sounds quite sensible.
Mr. Deputy Chairman: We can just stand this amendment down until we reach the amendment later on. The member for Hamilton Centre has given notice of two other amendments to the definitions section. Are they tied into some later amendments or are they simply amendments to the definitions section which you wish to put?
Mr. M. N. Davison: The further amendments I would like to place to section 1(1) of the bill deal with amendments I will be placing later on in that they delete the definition of a bureau and substitute definition of a registrar’s office, which I propose to put later on in the debate. So in that sense they are similar to the amendments I just dealt with.
Mr. Deputy Chairman: Could we have the consent of the committee that if any amendments carry further on, we can refer back to the definitions section to add definitions which implement those amendments? Would that be acceptable?
Mr. M. N. Davison: I did try to contact the minister --
Hon. Mr. Drea: What are you talking about now?
Mr. M. N. Davison: -- late yesterday. If you look through the packet I just sent over with the page, that should be in the package. There are two sets. This set I am talking about on section 1 is at the back of the group dealing with the registrar’s office.
Mr. Deputy Chairman: I would point out to the member for Hamilton Centre the only thing the table has from your party is an amendment by the member for Carleton East. Other than those in the definitions section we have no amendments from yourself.
Mr. M. N. Davison: I intend to give them to you as I move them. Would you like them all now?
Mr. Deputy Chairman: It would be an advantage to the table to have them now so we have an orderly debate.
Mr. M. N. Davison: Has the minister found them?
Hon. Mr. Drea: No.
Mr. M. N. Davison: I will send you another copy of them.
Mr. Breithaupt: Mr. Chairman, at this point I don’t have them either, but I presume --
Mr. M. N. Davison: I sent them down to your caucus office yesterday.
Mr. Breithaupt: All I can tell you is I don’t have them in the bundle of information which I brought up from my office this morning. In any event, they will be part of any reference in sections 57 and 58. We can certainly revert then, I am sure, quite conveniently.
Mr. Deputy Chairman: Shall section 1 carry, subject to reopening if it is required later on?
On section 2:
Mr. Deputy Chairman: Mr. Davison moves that section 2 of the bill be amended by adding a new subsection 6 as follows: “No highrise complex of more than 250 units, nor a townhouse complex of more than 100 units may be registered.” He further moves that subsection 6 as it appears in the bill be renumbered subsection 7.
Mr. M. N. Davison: The reason for this amendment, Mr. Chairman, is a fairly simple one. We had many people coming before the committee with briefs in regard to the issue of size of condominium projects. This amendment is not at all intended to address any condominium project that is on stream now or has been built, but simply those that come on stream after the bill is proclaimed. The reasons for it are simply reasons of group dynamics.
The condominium being a group of people who have to live with each other and work with each other in their residential community, it is felt by many people whom I respect greatly in the condominium movement that it is just not a sensible thing to have high-rise developments of 500, 600, 700 units or rambling townhouse complexes of 250 or 300 units because they just don’t work.
This amendment will better meet the needs of the condominium movement, providing the kind of condominiums that can work, not the kind of condominiums that are going to break down because the group dynamics are all but impossible.
Hon. Mr. Drea: I would draw the attention of the member for Hamilton Centre to a place called Crescent Town which has 1,400 units. It is, by common acknowledgement, probably the best-run condominium organization in the province. It has set an example for a great number of other condominium units.
What concerns me about this amendment is the rather deliberate attempt to dictate to municipalities the type of new housing stock they will have. If the municipality, through its zoning and its planning, wants to put a limitation on the number of units, then surely it is the responsibility of the municipality or the region. I don’t think it is our responsibility under this act, however desirable or undesirable numbers are.
Size is not the sole factor in determining whether a project is good or bad. There are certain market forces at work now, but by the same token certain market forces may change and there may be an attraction to a larger type of project. That should be decided at the municipal and the planning levels.
What would you do with buildings now up for sale? What would you do with buildings or projects that have already been started? Perhaps the physical construction hasn’t begun but the financing is there. I realize you are going to come back and say, “we will grandfather all of them.” I fail to see why, in this bill, we would want to place an absolute limit on the size of a condominium, giving the reason that if it is underneath that number there will be fewer problems, if it is over that number there will be more problems, whether the problems are real or imagined. That’s saying the success of Crescent Town can’t be duplicated, and that concerns me a very great deal.
Mr. Makarchuk: One of the consistent things that came out of the presentations the committee heard in Toronto, as well as in Ottawa, was a desire on the part of the people who live in condominiums, who deal with condominiums, who are acquainted with the whole concept of that lifestyle, to limit the size of the projects.
Admittedly, 250 is not necessarily the ideal figure. It may be lower, it may be slightly higher. But we have to draw the line somewhere. This is not my idea, it is a reflection of what was expressed by the people who appeared before the committee. This Legislature and the legislation it passes should take into account the input we get from the people out there.
Ms. Gigantes: Why did you invite them?
Mr. Makarchuk: They were invited and they presented their statements. It was the same in Ottawa, I might add. The people in Ottawa said the same thing as the people in Toronto; that there should be a limit to the size of the condominium and this is an effort to do that.
I want to point out to the minister that in its zoning regulations, a municipality will decide the density per acre of units. It does not decide the size of the condominiums.
Mr. Pope: It is the same thing.
Mr. Makarchuk: Yes, all right. Although they may have this situation, you can just see what happens. On the one hand local councils are subject to lobbying. The other point is a situation could develop where you have competition between municipalities. If you want to build a condominium one will allow 300 a year, the other one will say 400, another will say 500; the next thing you know there is no limit to the number or the size of the condominium projects that could or will be constructed.
I want to bring to the attention of the minister and his assistant and the Liberal Party wherever they are, the fact that the people who appeared before the committee stated very emphatically that this is a necessary measure that should be included in the legislation. You are dealing with legislation right now that hopefully will be around for some time, that hopefully will improve the quality of life and the lifestyle in the condominium units; this is one of the means of doing it.
I just can’t understand market force and that nonsense. It does not apply to this and let’s realize that. What really applies here is the fact that certain sizes of condominiums arc manageable. There is some cohesiveness and a sense of community. There’s an ability to make it function. Somewhere or other, if they become too large it just doesn’t work.
Mr. Breithaupt: Mr. Chairman, I will be brief. The member for Brantford says he doesn’t know whether the figure of 250 is too high or too low. Since I don’t know either, I will oppose the amendment.
Mr. Philip: It was fairly clear to anybody who monitored the Kealey commission that condominium after condominium came before that commission and outlined that there seemed to be a direct relationship between size and the number of human problems within the condominium. Any MPP who deals with condominium problems will notice that same relationship. Sure the minister can point out a corporation that works very efficiently and that perhaps satisfies the needs of a particular group of people, but the fact is that those of us who work day after day with condominiums can show a definite relationship between the number of complaints we get, the number of times we have to meet with boards, the problem of poor attendance at meetings, and the size of the condominiums.
If I recall correctly, and maybe the minister can check this out, the Mississauga brief recommended some kind of provincial action related to the size of condominiums. I wasn’t present when the Mississauga briefs were presented, but there was newspaper coverage of that recommendation and I would ask the minister to seriously consider this proposal. If the figure of 250 doesn’t make sense, then perhaps he would consider working out another formula.
There is a difference between townhouse complexes and highrises and the kinds of problems that develop. It may well be that the limitation on townhouses has to be lower than the limitation on highrises, but surely this problem has to be faced since so many people have taken so much time to talk about this problem, over and over again.
Mr. Pope: I don’t believe the New Democratic Party is serious in saying that the problems of group dynamics and human relationships are related to the size of the building.
Ms. Gigantes: It is not a building we are discussing.
Mr. Pope: There are lots of smaller condominiums that have just as many human relationship problems. It depends on the people who are there. It depends on the will of management to resolve these problems.
Mr. M. N. Davison: Which ones?
Mr. Pope: We heard arguments from a couple of briefs presented to the committee concerning the size of condominiums. It wasn’t an overall theme. I also beard arguments to the effect that this government should restrict the number of condominiums that could be built in the province of Ontario for the sake of assuring some marketability of existing condominium units. That’s what I think this amendment is really getting at. It wants to control the market for condominium units throughout the province of Ontario. It’s interfering with the feasibility of construction of condominium units, and I don’t think --
Mr. Makarchuk: That is nonsense, absolute nonsense.
Mr. Pope: -- it should be supported.
Ms. Gigantes: Mr. Chairman, I don’t believe that the government members or the Liberals understand this amendment. They are not speaking to the amendment. What they are talking about is a condominium corporation in terms of the physical plant involved. We are talking about a condominium corporation as a group of souls who exercise joint ownership of properties and try to control the environment they live in through the exercise of that joint ownership.
It doesn’t matter how many units you have in a building. We’re talking about the organization. If you have 1,000 units in a building you can have four condominium corporations, and you know very well many developers phase theft condominium corporation developments. They’ll build 250 units and they’ll call that such and such a place phase one. Then they’ll build another 300 units and they’ll call it such and such a place phase two.
Municipalities approve those developments and it makes life a great deal easier for people to live according to the rules of condominium corporation ownership when the group is a limited group. We’re talking here about the organization and not the physical plant involved in a condominium corporation. I wish the members opposite would speak to that.
Mrs. Campbell: Mr. Chairman, I think there is no question that the people who came before us, or many of them, were concerned about the size of the corporation. My colleague has expressed, however, one of the problems with this particular amendment. If you put in a size of 250 then you’re in the problem that maybe if you want to divide up the phasing or something you then want to have, I suppose, something akin to a minor variance of 260 or 249, this is a problem.
I will tell you this, there is no way that we need to have one condominium corporation, for example, for three developments in one area. The attempt here is definitely to limit the size of the corporation to make it more manageable. I’m sorry but I really haven’t had the opportunity to check back on my notes. I think that came out pretty clearly in Ottawa as well and I don’t recall that either member opposite was present at those hearings in Ottawa.
The principle is correct, let’s say that. My colleague is addressing himself to the very real problem of saying 250 or a specific number. I would really almost rather that this particular section be stood down to accord to the minister the opportunity to rethink the situation and to come back with something that I could see might be workable. The principle is certainly, in my view, not in doubt but the actual wording of it, as my colleague says, is really a problem. I would just invite the minister to give some thought to it and let it be stood down until we can see if there is some alternative that can be done.
We are not dictating to municipalities at all, any more than we are dictating to legislation really. What we’re referring to is the size of the corporation to make it workable in the best interests of people. As I understand it, reading the amendment, and I’ve seen it for the first time, we’re not saying anything about the unit itself or the size of the units themselves.
Hon. Mr. Drea: Oh yes.
Mrs. Campbell: Then let me read it again.
Mr. Makarchuk: Not the size of the unit, not the individual unit.
Hon. Mr. Drea: More than 250 units can be registered.
Mr. Pope: I can just see four condominium corporations in one building.
Mrs. Campbell: Yes, but registered as a corporation. It is not saying to the municipality, “You shall not permit a condominium development of more than 250 units,” as I read it. The registration is for that number for that corporation.
Mr. M. N. Davison: Quite correct.
Mrs. Campbell: I think there is confusion in it. I would like it clarified, but I am speaking now and addressing the principle even though we are doing clause by clause. The principle is clear. The amendment as put is not satisfactory.
Hon. Mr. Drea: I will refer to the member for Carleton East and the member for St. George in that order.
First of all, I made it very plain right at the start what I was talking about. I was talking about people. The truth of the matter is, and I don’t care how you measure it, the only way you are going to find the size of the corporation is by the number of units it represents. If it represents 10, it is going to have 10 people. That’s pretty fundamental and pretty simple. I thought I explained that very well.
Many municipalities right now require one corporation, not a split. I say this to the member for St. George. Many municipalities right now will not accept or will not grant a severance for this type of split, so that it isn’t as simple as saying if you have this number of people that you somehow divide it into a optimum number.
Mrs. Campbell: I didn’t say it was.
Hon. Mr. Drea: It just isn’t there. Also, quite frankly, the splitting up -- and this is one of the times developers are going to love you -- developers want that because it means faster movement right at the start.
Mr. Philip: It also works better.
Hon. Mr. Drea: Just keep moving, just keep going. Whether that would create a problem, I don’t know. You come back to the question of, if the municipality will not allow a severance and this thing says you have to get a severance, then you don’t build the place.
Mr. Pope: Exactly.
Hon. Mr. Drea: It is that simple.
Mr. Swart: I want to speak very briefly on this and in support of the resolution. It would appear that the Liberals are primarily opposing this or not going to vote in favour of it because of the 230 units, not being sure whether that is the right amount. I suggest to them that if they don’t think that is the right amount, they can move a subamendment and make another suggestion that we might support.
Mrs. Campbell: That’s not it.
Mr. Swart: I think everyone here would have to agree that there has to be some limitation on the size. If this amendment is defeated and there is nothing in its place, then there will be no limitation. For a great variety of reasons, the social reasons, the very practical reasons of the condominium corporation working, there has to be a limit in size. Once they get so big, almost like a union, if I can use the analogy, there’s more difficulty in getting the membership to turn out in a very large union than there is in a smaller union. That’s a fact of life. The same will be true in condominiums, and perhaps it is much more serious in condominiums to have a good working corporation. Therefore, I think it is essential that we have this principle established in legislation.
I have to say that I sometimes get a little tired of having the local autonomy of municipal government thrown at us. If it was thrown at us in a straightforward meaningful way, I think we would all support it. My goodness, the Ontario government almost dots every “i” and crosses every “t” on a subdivision plan; it must go to the ministry, there’s all kinds of correspondence back and forth and you must change this if you are going to get it approved. Surely it is not contradictory in any sense, or taking away from local autonomy, to say that a condominium corporation should he limited in the number of units that can be involved in it.
I just say to those who say they are not going to vote for this, if you agree with it in principle then make some suggestions for change. Otherwise, let’s pass it. It can be changed at a later date. A year from now, if it’s too small or not the right size, the government can bring in legislation to change it. My goodness, the rent control legislation was supposed to be only on an interim basis and that has been changed three or four times in the three years it has been in force. We can change this if change is needed at a later date. Let’s not kill a good principle because we don’t agree with the details.
Mr. Philip: Mr. Chairman, I believe the minister -- although it may have been his parliamentary assistant, the member for Cochrane South -- was saying that on this particular amendment we are on the side of certain developers. On this particular amendment I don’t mind being on the side of certain developers, because certain key, prominent developers have found that in terms of their phasing in of projects this makes sense. It means earlier registration, which is a benefit to the consumer surely, and it means fewer hassles in terms of management, because the group dynamics that are working within that particular project mean fewer problems that they as a management corporation have to attend to.
Surely then, if somebody like Cadillac can find that this is a useful vehicle, not only to sell condominiums, not only to get early registration, not only to help in their phasing in of a development, but also to possibly cut their management costs, or at least cut out some of the headaches they have, then I see nothing wrong with being on the side of certain developers in this case. I think the minister and the members of the Liberal Party should surely consider that some of the more experienced developers are in favour of this kind of limitation, because we can have large developments with separate corporations that can manage their own affairs and still have common elements such as swimming pools and so forth with shared expenses.
Mr. Pope: Just briefly, I assume the member for Etobicoke is going to move an amendment to his awn amendment to restrict this right to certain developers he thinks are doing a good job. I would like to know, if we are not dealing with the size of the building --
Mr. Swart: Don’t be silly.
Mr. Philip: We wouldn’t know who they are, because you don’t want them disclosed.
Mr. Pope: I assume if we are not dealing with the size of the buildings that the members of the New Democratic Party are going to tell me how four condominium corporations located in one building are going to handle some of the major problems of where repairs will be done, when they will be done, who is going to use common areas and when. I would like to hear some definitions from them as to how all these group dynamics are going to work out with four different corporations trying to use the same building. That’s how ridiculous we’re getting.
Mr. Makarchuk: The parliamentary assistant is certainly great at creating straw men. Once again I want to bring to your attention, Mr. Minister, that the fact is this Legislature has to be responsive to some of the needs of the people outside. The member for St. George, who is not in the House, mentioned the fact that she was in Ottawa. So was I in Ottawa. The same consistent request came through in Ottawa as came through at the hearings in Toronto, that the size of the condominium should be limited.
Again, I repeat to you that this comes from people who live in these units and who have decided to make this their lifestyle. It is not a question, as the parliamentary assistant says, that you put up a 1,000-unit operation; of course it could create problems, no question about it. If you have 1,000 units in one building you are out of your cotton-picking mind to allow anything like that. That’s not a condominium, that’s a sort of institution.
Hon. Mr. Drea: They are going to love you over in Crescent Town for that, Mac. I would hate to be your candidate in York East next time after that one.
Mr. Makarchuk: It just becomes very difficult to really operate on that basis. This is the message that came out of the hearings we had over a period of time. Once again I appeal to the minister to start realizing this fact. This legislation is going to be here for some time, and sure we don’t know if 250 is the ideal number or not but we have to start some place, and there is some consensus that perhaps that is a good starting point.
Maybe later we will have to change that. We may have to amend it. We may have to increase it or decrease it. We may find that that is not the case. The people in Ottawa, if I remember correctly, argued that it should be around 100 units. They felt that would really make it a nice manageable corporation, that the people would be involved and that they would be able to get the required one third, two thirds or half the people out to the meetings because the size of the corporation was such that they would turn out.
These were some of the factors they took into consideration when they were presenting their brief to us. The people out there who live in the condominiums feel, and I think rightly so, that there should be a limit to the size. The minister should be sitting in this House framing legislation that is supposed to reflect at least some of the wishes out there, but he is not. I just wonder how he can justify that kind of operation.
Mr. M. N. Davison: I am afraid I am becoming a hopeless compromiser. If there is some way that the Liberal Party and the New Democratic Party can come together on this particular principle, as so eloquently addressed and put by the member for St. George, I’d like to hear it and I would be quite willing to do so.
It has been suggested that 250 is the wrong number. It has been suggested by other people if that is the wrong number, then suggest a different one and we’ll look at it and probably accept it. The response to that is: “How am I supposed to know what the right number is?” Members of the Legislature and members of the justice committee worked with this act for an intensive period of three weeks earlier this year. If we don’t know, who does know?
I would ask the Liberal Party to try to suggest a more firm approach. I wouldn’t like to see us lose the principle because the Liberals can’t think of any other alternative. We would be willing to look at any other alternative which would support this principle.
If you can’t think of another alternative, please support this so that we will have something. If it proves to be unworkable in six months or a year we can change it. As a matter of fact, I am sure the minister would be back as soon as it proved to be unworkable with an amendment to the legislation.
Mr. Deputy Chairman: All those in favour of Mr. Davison’s amendment will please say “aye.”
All those opposed will please say “nay.”
In my opinion the “nays” have it.
Sections 3 to 25, inclusive, agreed to.
On section 26:
Mr. Deputy Chairman: Hon. Mr. Drea moves that section 26(3)(m) be amended by striking out “the original costs and” in the first line.
Mr. M. N. Davison: In my opinion it should not carry, and I would hope in the opinion of the Liberal Party it shouldn’t carry. When we discussed this in committee, it was a case where the two opposition parties voted in favour of adding the words “original costs” to that section.
My party has absolutely no reason for doing a flip-flop or backing down, or changing its position. It was a good idea at the time to add the words “original costs” and it remains a good idea. It means that the people in the corporation will have a much better idea of what they have and what it is going to cost to replace it before they run into the problems down the road.
I think the more information of this sort we can supply them with in the legislation, then the more confidence we are going to be able to re-establish in the condominium market.
Ms. Gigantes: What is the explanation?
Mr. M. N. Davison: What is the position of the Liberal Party on this? Are they changing their minds on this one too or are they going to stay with their old position? I’d like them to participate in the debate, to feel free to.
Mr. Pope: They don’t have to answer to you. Why do they have to answer to you?
Mr. Breithaupt: We will participate when we choose to. Thank you for the gratuitous invitation.
In any event, the matter has been discussed with both the UDI group and with the Federation of Ontario Condominium Associations. Both of these groups feel that this phrase is not useful and, as a result, I am prepared to support the minister’s amendment.
Mr. Deputy Chairman: All those in favour of Mr. Drea’s amendment will please say “aye.”
Those opposed will please say “nay.”
In my opinion, the “ayes” have it.
Section 26, as amended, agreed to.
Mr. Kennedy: You can’t stack it.
Section 27 agreed to.
On section 28:
Mr. Deputy Chairman: Hon. Mr. Drea moved that subsections 2 and 3 of section 28 be struck out and the following substituted therefor:
“Subject to subsection 5, a bylaw passed under subsection 1 is not effective until it is confirmed, with or without variation, by owners Who own not less than 51 per cent of the units at a meeting duly called for that purpose;
“and that subsections 4, 5 and 6 be renumbered as 3, 4 and 5 respectively.”
Hon. Mr. Drea: I will speak on this. I realize this amendment is a departure from what was done in committee. It comes about from a meeting in my office with the condominium federation. They felt very strongly with respect to a bylaw, not a rule, that the quorum provisions, when worked out, really allow for 17 per cent of the owners to be able to pass a bylaw that indeed might add tremendous costs and so on to all the rest of the owners. In terms of a bylaw they feel much more comfortable with 51 per cent of the owners or the proxies.
Everyone realizes that it is somewhat difficult to get 51 per cent in attendance, but by the same token there was a very real concern -- arid I must say that I share it -- at a majority of one third of the owners being able to change bylaws. I realize that in terms of the rules and so forth the quorum system should provide for easier implementation and an easier vote. There is no argument that can prevail.
On the bylaw, as I say, there are the people who live in the units, there are the people who have had experience and these are the people who know the difficulty in getting out that number, but they are prepared to accept that difficulty rather than go the other route with a much smaller vote, because they do have some very substantial concerns. On the basis of that meeting I gave them a commitment as minister that I would change the quorum back to 51 per cent in terms of bylaws.
Mr. Breithaupt: I appreciate the remarks made by the minister. I too was favoured with a lengthy and useful meeting with the Federation of Ontario Condominium Associations, and some of their officers and their solicitor. The points which the minister has raised came out quite clearly as we looked at section 18 and the matter of the quorum of one third being available for the rules and regulations.
I am pleased that the minister has brought in this amendment because I believe that the 51 per cent figure is something which will prove to be useful and which will be a sign that the condominium corporation, by having that kind of membership in attendance, will be able to positively act where it is necessary to change bylaws. I certainly welcome the amendment which the minister has made and I will be happy to support it.
Mr. M. N. Davison: I wasn’t favoured by a long meeting with the federation, although I ran across one of their members as I was coming up to the assembly today. I think that we are willing to join with the other two parties in supporting this change from the original compromise. It’s a fairly substantial change. We are not talking about a minor adjustment.
This is quite a radical change, and because this amendment found its way into the act coming out of justice committee because of a compromise and agreement between the parties at those hearings, I might suggest to the minister that in the future, in terms of this kind of a situation where it was a compromise arrived at among all three of the parties, it might be a bit more useful for him to get in touch perhaps with the opposition critics outside of the normal process of amendments by submitting the amendments a day in advance. I think maybe this is the kind of thing we should sit down and have a talk about, because indeed it was a compromise that was reached. That said, we are willing to support the minister’s amendment.
Hon. Mr. Drea: Just on that note, I don’t think there is any minister in this government who co-operates more or goes out of his way more to make sure that the critics of the other two parties or their representatives are adequately informed, but I draw to your attention that the committee work on this bill and indeed the original drafting was not done by this minister. It was done by my predecessor.
I can assure the honourable member that had I been carrying this from day one there would not have been the need for the federation to come and have a lengthy meeting with me. The thing would have been solved a long time before. I also draw to the attention of the member for Brantford that I am very responsive when people bring me theft concerns and, indeed, I am prepared to make radical changes when those radical changes will be practical and effective.
Mr. Makarchuk: Mr. Chairman, I was going to, as a matter of fact, congratulate the minister on the accessibility that one has to him. There is no question about that. I have on occasion had an opportunity to discuss various matters with him. Unfortunately, they still haven’t got their cheese tray, Frank.
However, I want to remind the minister that when he was justifying this amendment and he talked about the need for a quorum and the difficulty of getting a 51 per cent quorum, that was a valid argument. That is an argument supporting one of the reasons why we tried to limit the size of the condominiums when we introduced the previous amendment. It seems to me the minister should realize that if it applies here, which I think it does, it’s a relevant factor to this amendment, then it should also apply just as equally to limiting the size of the condominiums and that’s using the minister’s own argument.
Mr. Philip: Mr. Chairman, far be it from me to defend the previous minister, but I think that the statements by the present minister are a little unfair to the previous minister. He did meet with the group. He happened to have disagreed with them and he stated that disagreement clearly in the committee. He had consulted with them on this. He just didn’t happen to agree. I think that that should go on the record, that the minister did try to consult with them. He happened to not agree with what they said and this minister does, and bully for him then. We happen to agree with what he’s done.
Hon. Mr. Drea: Mr. Chairman, it is extremely difficult to try to respond to anything over there in a coherent or cohesive manner. The question was brought up by your own colleague from Hamilton Centre that I should have phoned him up before I made the decision. I tried to give him an adequate explanation as to why this was a very unusual circumstance and I was not in a position to do that. Then you come on leap-frogging, and you started having me making remarks about my predecessor. I’m not making any remarks about my predecessor. I was trying to explain in a logical manner to the member for Hamilton Centre. Perhaps if you were here -- and you missed the last vote so it won’t be stacked -- you would have heard the original dialogue and why I replied in the manner I did.
Mr. Philip: Perhaps if you read the record you will see what you really did say.
Mr. Chairman: Any further comments on this amendment? If not, shall the amendment carry?
Motion agreed to.
Section 28, as amended, agreed to.
Sections 29 to 35, inclusive, agreed to.
On section 36:
Mr. Chairman: Hon. Mr. Drea moves that section 36 be amended by adding thereto the following subsection: “7. The bill may, upon being satisfied that the corporation has sufficient reserve funds, exempt the corporation from the requirements set out in subsections 2 and 3 upon such terms and conditions and for such a period of time as the bureau considers proper.”
Mr. M. N. Davison: The original act as put forward by the ministry required simply the five per cent reserve fund. It was on motion of my caucus that the change was made adding the new section 3, raising it to 10 per cent. There were good and sufficient reasons for the ministry to bring in the five per cent in the first place, and I believe there were good and sufficient reasons for my caucus to propose the 10 per cent, understanding that it would take some time to bring corporations up to that level.
The reasons are manifold. They have to do with faults in construction, they have to do with normal maintenance, they have to do with many other things. They also have to deal with the fact that there were a lot of corporations that didn’t have anywhere near the kind of money they needed to have.
It seems to me, from what I can understand talking to people in the condominium movement, that five per cent to 10 per cent is certainly a reasonable contribution to a reserve fund, and it is probably going to be eaten up as they go along. I really don’t see the need for the minister’s amendment which provides the bureau -- which is a pretty dubious setup in the first place -- with the capacity to satisfy itself that any corporation happens to have sufficient reserve funds. I would like to have the minister expand on his thinking a good deal more before I would be willing to support this amendment.
Hon. Mr. Drea: The amendment is almost self-explanatory. The fact of the matter is that once those reserve funds are accumulated there is the argument that there are sufficient funds for virtually any contingency that can come along, and therefore what is really coming in is an impartial way of putting a cap on it. There is a counter-argument that money keeps pouring into this reserve fund that obviously is a way beyond any amount that will be required, and this indeed is hamstringing the condominium corporation in some of the things it might want to do.
All this does -- and it is not automatic; we haven’t put a figure in here as to where the cap really should be, because once again, I don’t think anybody knows -- is in order to qualify under the section you are going to have to prove, through a number of rather detailed financial statements and so on and so forth, plus the experience in the corporation with common-element expenses and so forth, that you already have enough money to virtually meet any contingency. On that basis you do not continue to pay in.
Then, of course, there is a determination as certain moneys are paid out that that fund is brought back up again. It merely leaves the corporation flexible. What’s the point of having all of that money tied up when it is not needed?
Mr. M. N. Davison: Is the minister of the opinion that this would affect a fairly small number of condominiums, so that the reason for the amendment is that the bureau can have that much leeway that the few numbers of condominiums that reach these huge surpluses would no longer have to contribute for a certain period of time?
Hon. Mr. Drea: Yes, that is quite correct. It would be on the basis of a very large condominium corporation that is professionally run because of the fact that they have the resources to have it done that way rather than the general rule. Mind you, it’s flexible enough that a very small corporation might indeed want to take advantage of this section even though the monetary amounts might not be as large.
Mr. Philip: I think that the amendment makes a lot of sense, not only from the point of view of the flexibility but also I worry and I had a number of people express some concern to me about what happens if you get just even a handful of corporations that will get a large reserve fund that is creating a lot of interest. I can just see somebody in the Ministry of Revenue in Ottawa saying, “We had better start looking at condominium books,” and going through a whole chase of taxation on that. I think for that reason also, it’s a reasonable amendment.
Mr. Breithaupt: We are quite prepared to support the amendment. There appear to be perhaps less than 20 per cent of corporations that would be affected in any event. Some sort of limiting device is practical based upon the experience of the corporations and the bureau.
Mr. Chairman: Shall the amendment carry?
Motion agreed to.
Section 36, as amended, agreed to.
Sections 37 to 51, inclusive, agreed to.
On section 52:
Mr. M. N. Davison: I had intended to move an amendment to section 52, creating a new subsection 5. However, in the spirit of negotiation and compromise that seems to be taking place today, it has come to my attention that there are those members of the assembly who would like a further chance to think about this amendment. I would propose that if it be possible that particular part could be stood down so that we could come back to that a little bit later on.
Mr. Chairman: Section 52?
Mr. M. N. Davison: I don’t necessarily want to stand down the whole section. As long as I have the capacity to come back and move a new subsection 5, I am quite willing to deal with my amendment on the existing subsection 6.
Mr. Chairman: Does the committee agree? Agreed.
Mr. Breithaupt: There is another amendment to section 52, is there?
Mr. Chairman: Mr. Davison moves that section 52(6) of the bill be amended by adding a new clause (h) as follows:
“(h) 1. A list of all other condominiums registered by the declarant or proposed declarant or; 2. Where the declarant or proposed declarant is a corporation, a list of all other condominiums registered by the corporation, its officers, directors, or principals or any other corporation with a common officer, director or principal.”
Mr. M. N. Davison: We have already debated this at some length under subsection 1 of section 1, which dealt with the definition of principal as it applies to this clause. The Liberal position, as nearly as I can understand it, is certain objection to the inclusion of disclosure of principals. I am not at all clear what their position is in regard to disclosure of other condominiums registered by that particular declarant; and I am not at all sure what their position is in terms of, in a corporate situation, the officers and directors of that corporation or any corporation with common officers and directors.
I would suggest that if the Liberal Party could put its position succinctly, I would be quite willing to start crossing out some of the conditions in that amendment, so that we can get some disclosure to the prospective purchaser so that he knows that the developer who built the building down the road and never did what he said he was going to do, or where the roof collapsed, is not a particularly wise or good person to buy a condominium from. If the Liberal Party could put its position in regard to disclosure, I would like to hear it.
They did, of course, vote in committee on this, supporting an earlier amendment in committee that did exactly what this amendment tries to do. If they would put their position I would be very happy to consider amending this.
Mr. Breithaupt: It is my view that this particular matter, as we mentioned on the definition in section 1(1)(q)(a), is particularly a matter of warranty under HUDAC. I have no objection to the first part of the proposal if the member for Hamilton Centre is of a view that a list of all other condominiums registered by the declarant or proposed declarant would be useful. I have no particular objection to that. I would have thought, though, that since the declarant is likely to be a separately incorporated company, it would be most unlikely that that numbered company, or otherwise, would in fact have any other projects that could be referred to under that corporate name.
Hon. Mr. Drea: What real protection is provided by putting down what condominium units or what projects you have done in the past? “I built two in North Bay. Here are the addresses.” I am quite sure a person in the region of Wentworth who is looking to buy a condominium isn’t going to check. So he or she built two in North Bay and here are the addresses. So what? The point of protection, and the basis of this bill is protection, is the estoppel certificate, and that has been vastly expanded.
I know what you are trying to get at. The member for Etobicoke (Mr. Philip) has raised this a couple of times. You are trying to run an identity check through this; who are the principals behind this or who are the directors. The argument has been made in many cases they are minority shareholders in privately-held companies. That constitutes one difficulty. But merely putting down a list of addresses if this person indeed has built more than one is no protection at all. If you want to go your route, you have to go the whole route; you have to get into that definition of principal. You can’t go halfway because if you do, the protection breaks down.
Convince me that any valid type of information or protection is provided by merely listing these companies. Many of them will be numbered, and if they are not numbered, they will have a name that bears very little relation to that of the principal. That isn’t going to provide anything. The route you want to go is the principal. So I would oppose this amendment on that basis.
Mr. Breithaupt: The alternative is also there for quite separate directors to be involved, and under the requirements of the Corporations Information Act, the eventual ownership of principal of a corporation which is yet to be organized is masked anyway.
Mr. Makarchuk: Admittedly, this is not a perfect solution to the problem, but it is an effort to get at the problem, which is to cut out some of the fast-buck artists who operate in this field. I am amazed that the minister, the former shining knight in shabby armour --
Mr. Conway: On a point of privilege: I like the minister’s tie, even if it is the only one he owns.
Mr. Makarchuk: -- who used to fight for the consumer, who built his reputation --
Mr. Chairman: There is nothing about shining knights in the bill, to my knowledge.
Mr. Warner: There should be.
Mr. Makarchuk: -- on the protection of the consumer, would at this time be reluctant to permit or agree with an amendment that admittedly does not provide the total answer, but does give the consumer a slight edge, as I said before, to look at the track record of some of the people who are involved in building condominiums.
The fellow can say, “I have built one in North Bay.”. Then I can phone the building department in North Bay and probably find out very quickly the track record of that person in North Bay and just how well his condominium has been built and whether there are any problems or not.
This is an option that will be open to every consumer. I admit it is not going to be 100 per cent perfect, but it is a start. All we are trying to do here again is to protect these people who in many cases are for the first time getting themselves involved in purchasing a home. They want some protection. We have a past record of where there have been abuses and of where people have been taken in these situations. We have a record of people who have built shoddy condominiums, and are still building shoddy condominiums.
All we are trying to do is to put some kind of a stop to it and to curtail this kind of activity. The minister refuses to comply. I just can’t understand it.
Mr. Kennedy: My comment doesn’t deal specifically with this amendment, but I will give it a try now, if I could.
We have about 200 condominium corporations in Mississauga. The problem is with a purchaser buying and the corporation, the vendor, having a debt. There is a case now before the courts, so we can’t comment on that. What I wanted to ask the minister was if this section and the declarations section would ensure that a purchaser would know what debt is levied against a corporation and the entire building. In this instance, the purchasers later on were presented with a bill of some $124,000 of debts assumed by the corporation. They are obliged to pay this off, subject to whatever the court says.
Does this section look after such a situation as that?
Hon. Mr. Drea: No. I would think it might more properly be brought up at whatever section there is on the estoppel certificate.
Mr. Kennedy: What section would that be? How do you spell “estoppel”? I know about apostles and things like that.
Hon. Mr. Drea: Section 32(8).
Mr. Conway: Remember what you were told about caucus solidarity.
Mr. Chairman: We’ve gone by that.
Mr. Makarchuk: You don’t want another lecture from the Premier (Mr. Davis).
Mr. Warner: Close ranks over there.
Mi. Conway: You must suffer all kinds gladly.
Mr. M. N. Davison: We already passed section 32(8). He missed it. It might be helpful, seeing that he happens to be the minister charged with protecting other consumers, if the minister could explain to me the essence of his belief on consumer protection. I had the impression when we went through the great turkey debate that his idea of the best form of consumer protection was an informed consumer. The more you knew about turkeys, the better turkey buyer you would be.
Hon. Mr. Drea: You will notice the prices are down.
Mr. M. N. Davison: How is it that when the minister switches from turkeys to condominiums he throws away his basic concepts of consumer protection --
Mr. Makarchuk: How can the minister be on the side of the fast-buck artists? Tell us that.
Mr. M. N. Davison: -- and now is in the position of saying: “Let’s keep the consumer ignorant of who is behind these companies and who are the real people involved in these constructions. Let’s keep the consumer ignorant. Let’s keep him in the dark.” That doesn’t make a lot of sense. It seems to me you would have a consistent belief or policy in terms of consumer protection. Finally, it seems to me, Mr. Minister, if it’s good enough for turkeys, it’s good enough for condominiums.
Mr. Conway: Hear, hear.
Hon. Mr. Drea: I have gone through this three times now. I make no apologies for what I have said in here today. Do you really think it’s going to protect anybody to see the name Cadillac on the condominium or to see Joe Blow? If you really want consumer protection --
Mr. Martel: Well, in Sudbury, if you see the name Ross Shouldice, it would.
Mr. Chairman: Order.
Hon. Mr. Drea: You mean they wouldn’t buy?
Mr. Pope: You mean they wouldn’t buy?
Mr. Martel: No, they wouldn’t buy.
Mr. Pope: Oh, is that right?
Hon. Mr. Drea: I think I have explained this situation adequately. I would be the first to support it if I believed in the amendment. The member has castrated his amendment. He’s offering deals all over the place. You would cut out the principal if the Liberal Party would agree. You offered it to them. They shook their heads.
Mr. M. N. Davison: They won’t agree.
Hon. Mr. Drea: All right. You have castrated and emasculated your own amendment. You are almost down to, “will the person please list anything he’s ever built before.” It provides no protection whatsoever.
Mr. M. N. Davison: Read the amendment, Frank.
Mr. Warner: The minister is better on turkeys.
Mr. Makarchuk: If the minister feels this amendment does not provide the protection, is he prepared to introduce an amendment? We will stand down this section. Are you prepared to draft an amendment which you think will provide the protection? Certainly you have got all your people there. All the king’s horses and all the king’s men are assembled around you; your parliamentary assistant is sitting there grinning like a Cheshire cat, available I am sure at no cost to you.
Mr. Breithaupt: In the front row now.
Mr. Makarchuk: So why don’t you bring in that amendment right now?
Hon. Mr. Drea: Mr. Chairman, it’s very simple. This whole bill is a matter of consumer protection.
Mr. Makarchuk: You know his advice isn’t worth too much. Is that what you are saying?
Hon. Mr. Drea: The estoppel certificate and the expanded declarations in there more than adequately cover the very points that the New Democratic Party is trying to get at.
Mr. M. N. Davison: I just want to clear up one thing. I must admit I did try to convince the Liberal Party members to move --
Hon. Mr. Drea: You cut your amendment right in half and dangle it out like fish bait.
Mr. M. N. Davison: -- one little step in the direction of consumer protection, but they weren’t even willing to put their toe in the water to protect the consumers. I certainly have not done anything to my amendment and my amendment stands the same as it was.
Hon. Mr. Drea: Since you couldn’t get a deal, you revert to the original.
Mr. M. N. Davison: I think the minister finds good allies in this Liberal Party when it comes to consumer protection, because neither of you in this instance will move an inch to protect the consumer.
Mr. Martel: It shows there is no difference between either one of you, Tweedledum and Tweedledee.
Mr. Breithaupt: If the amendment stands the way it was we will oppose it, because it is completely useless.
Mr. Chairman: Shall Mr. Davison’s amendment to section 52(6) carry?
All those in favour will please say “aye.”
Those opposed will please say “nay.”
In my opinion the nays have it.
Mr. Breithaupt: Mr. Chairman, would it be convenient then at this point to stack the earlier amendment to subsection (q)(a) which would flow from this amendment?
Mr. Chairman: This will also be stacked. Is it the wish of the committee that section 52 still be stood down?
Section 53 agreed to.
On section 54:
Ms. Gigantes: Mr. Chairman, I have an amendment to section 54.
Hon. Mr. Drea: Mr. Chairman, I would appreciate having it.
Ms. Gigantes: It was sent to your office yesterday afternoon. In fact, they were hand delivered by my assistant.
Mr. Warner: It’s that office again. Better kick somebody.
Hon. Mr. Drea: Mr. Chairman, I just want to say that the member for Hamilton Centre is quite right; he did phone. I told his office no, I would be prepared to pick them up in the morning. The only thing is that part of them didn’t arrive. I sent my amendments around yesterday afternoon in plenty of time. I think that I and my staff should really be afforded the same courtesy.
Mr. Martel: On a point of order: My colleague indicates to the minister that she had the material hand-delivered. Is he suggesting my colleague is not telling the truth?
Hon. Mr. Drea: You are an ass when you say something like that.
Mr. M. Davidson: That’s exactly what you said.
Mr. Chairman: Order.
Mr. Martel: I suggest he withdraw that remark, Mr. Chairman, and withdraw it immediately. My colleague made the point that she had the material delivered. The minister then rose in his place and suggested he had received a call from my colleague, the member for Hamilton Centre, implying thereby that my colleague was not telling the truth because his office did not have the courtesy accorded of having received them. The minister can play little games with a lot of people, but I am tired of his nonsense.
Mr. Chairman: Order.
Hon. Mr. Drea: At no time, did I imply that the member for Carleton East --
Mr. Martel: You certainly did.
Hon. Mr. Drea: -- for whom I happen to have some professional admiration, was not telling the truth. I accept that they were delivered. My difficulty is I was at my office at 7 o’clock this morning --
Mr. Martel: Did you check your office?
Hon. Mr. Drea: -- and they were not on my desk. Where they went, I know not.
Mr. McClellan: That’s not our problem, that’s your problem.
Mr. Martel: That’s not our problem, that’s your staff’s problem. Don’t come in here with your garbage.
Mr. Chairman: Order. The standing orders say that where possible --
Mr. Martel: They were delivered.
Mr. Hodgson: Sit down.
Mr. Chairman: I appreciate that. The minister has said that he does not have it at his desk.
Hon. Mr. Drea: I do now.
Mr. Chairman: You do now?
Mr. McClellan: A miracle.
Ms. Gigantes: I was not a witness to the delivery, but I certainly was a witness to the fact that my assistant had it in her hand and was in her car going to the minister’s office.
Mr. Hodgson: Maybe she went to the wrong office.
Ms. Gigantes: I will assume that it got there and I will assume somehow it got misplaced. I’m sorry. I sent the minister a copy of the motion I would like to put right now.
Mr. Chairman: Ms. Gigantes moves that section 54(1)(a) be amended by inserting the word “or” after “unit” in the second line. She further moves that section 54(1)(c), as it appears in the bill, be struck out. She further moves that section 54(1)(d), as it appears in the bill, be struck out. She further moves that the said section 54 be amended by adding thereto the following subsection:
“(2) A declarant or proposed declarant shall not grant a lease referred to in subsection 1 (b) unless written notice of the lessor’s intention to lease the unit has been given to every purchaser under an agreement of purchase and sale, registered owner and mortgagee entitled to vote, and the period referred to in subsection 3 has expired, or, where an application is made under subsection 3, it is formally disposed of.”
She further moves that subsections 2, 3 and 4 be renumbered as subsections 3, 4 and 5. She further moves that section 54(2), now renumbered as section 54(3), be amended by striking “clause (d) of subsection 1” after “any person notified under” in the first line and inserting “subsection 2” in its place.
She further moves that section 54(3), now renumbered as section 54(4), ‘be amended by striking “clause (d) of subsection 1” after “the notice mentioned in” in the first line and inserting “subsection 2” in its place.
She further moves that section 54(4), now renumbered as section 54(5), be amended by striking “subsection 1” following “provided that” in the fourth line and inserting “subsection 2” in its place.
She further moves that section 54(5), as it appears in the bill, be struck out.
Mr. Breithaupt: Mr. Chairman, might I ask if it would be convenient to have this prepared for us as it now appears with all the amendments? Perhaps we could go on to another section until the new section 54 which it has become is typed out, so that we could see the whole thing that is proposed, or does the member have that available for us? It would be very helpful since there are so many changes.
Ms. Gigantes: I don’t understand, Mr. Chairman. I don’t understand the nature of --
Mr. Breithaupt: I’m sorry if I didn’t make myself clear. I was wondering if the member had a fully retyped section 54 with all these changes made so we could see it as a whole item.
Ms. Gigantes: Section 54?
Mr. Breithaupt: It would be very useful to the members in committee, since there are so many amendments, to see the whole concept the member had, if that’s convenient.
Ms. Gigantes: I see what you mean.
Mr. Breithaupt: If it isn’t available, we will have to scribble through the pages, but that’s fine.
Ms. Gigantes: That would be fine. I don’t have a typewriter here in front of me. I don’t know to what facilities we can appeal to get that done.
Mr. Kennedy: Get going.
Mr. Breithaupt: It may not be practical.
Ms. Gigantes: I think it’s an excellent suggestion. I don’t have it available, as a matter of fact.
The section we are dealing with here, section 54, essentially puts limitations on the ability of the declarant or proposed declarant to lease units in a condominium, either registered or not registered. The problem with the section as it stands in the bill is that it’s a direct copy of the existing legislation. The existing legislation has been unenforceable, totally unenforceable. I am aware of several instances where owners were faced with problems because they were in a minority position in a building, either registered or unregistered, which was being used essentially as a rental building by a developer who had not been able to market all the units.
One has some appreciation of the difficulty a developer may have if he mistimes the building in terms of the market. It is quite reasonable that a developer have a period of time in which he can collect revenue from the building even though he hasn’t managed to sell all the units. That’s quite reasonable. It is not reasonable for a minority group of owners to be caught in the situation where they don’t even know how many owners as compared to tenants there are in the building. Nor do they have any assurance that the building is not going to be run perpetually as a rental building.
The gravity of the situation being faced by some people is such that I can cite two cases from one building in Carleton East where widows have put up $50,000 cash to pay for condominium units and they are living in those units in a building which is essentially a rental building now. It is being advertised as a rental building in the newspapers. It is listed in the telephone book as having a rental office, not a sales office. I can identify the building, the developer and the people who are suffering in that position if the minister is interested.
We have to have better protection for people who are caught in that situation which has existed under present legislation which is duplicated in the bill before us. The problem with section 54 is that subsection 1 has clauses (a), (b), (c) and (d) which have enormous loopholes between them. These clauses are connected by “ors” in legal language and the terms in which they could be enforced in court. They are connected by “ors” so that if the developer, in a pinch, decides for example under clause (b) of subsection 1 he is going to grant a lease which had a bona fide option for the purchase of the unit, no other part of section 54 really can be brought to bear on him. If he says that the person to whom he is granting a lease has a bona fide option to purchase the unit then that’s as much as the law requires of him.
I’ve been told this on good authority from the ministry itself, from Audrey Loeb Burns in the ministry, when I’ve attempted to help people use this section of the existing legislation for their own protection. She in effect told me it’s unenforceable. It’s unenforceable. These clauses are connected by “ors” in the court’s reading of them and, therefore, such subsections as 2, 3, 4, 5 and 6 really become inoperative in terms of protecting people who are in a minority ownership position.
What I have proposed here is a breaking down of the existing clauses in the bill before us so that we make allowance for developers to lease either, for example, under clause (a) where there is a bona fide agreement to purchase the unit, or (b) where the lease grants to the lessee a bona fide option to purchase the unit. That’s an option to purchase the unit. The proposed new section 2 restricts the ability of the developer under section (b) to do all this without the knowledge, first of all, of all the other people who are in ownership positions in that building.
That’s critical. They have to have that information. People who are purchasing into the building need to have it. They need to know how many leases are outstanding and for how long they’ve been outstanding and when they would have to terminate under the other sections of the bill. So the new subsection 2 really provides, in wording very similar to the old clause (d), for the information about the lease to go to to all other minority owners. That’s vital. The rest of the motion which I have just put relates, first of all, to making the rest of this section relevant to the new section 20.
Also, I have moved that subsection 5, as it appears in the bill, be struck. I’d like to say a word or two about that. This whole section is the section dealing with limitations on the rights of a developer to lease perpetually or semi-perpetually, putting limitations on his rights or her rights to ensure that minority owners are protected, but subsection 5 says: “This section does not apply to the renewal of a lease of a unit or proposed unit where the lease was entered into before any agreement of purchase and sale of any unit or proposed unit in eluded in the property is entered into.”
Subsection 5 is wide open. Subsection 5 is quite worrisome. Subsection 5 negates subsection 4 in the existing bill as it stands before us. Subsection 4 has limited the length of time, including renewals, that a developer can lease a unit to two years, but subsection 5 says that as long as he’s let out those leases at some point before there were any units sold then those leases can be renewed indefinitely.
That means there is absolutely no restriction on the developer in terms of leasing as long as he leased those units before he sold any units. Nobody has to know that those units are leased and the renewal can go on perpetually. This is quite a strange subsection. I personally don’t know if developers have ever used it. I don’t know how often it would apply, but it seems to me to negate the very spirit of the section, which is to provide some controls on leasing. With that, I recommend the motion to your approval.
Mr. Breithaupt: Mr. Chairman, the problems which the member for Carleton East sets out before the House are most serious ones. She has referred to particular examples in her own experience where this whole aspect of rental of units has proved worrisome to persons who have bought condominium units in good faith.
It is a difficult area, because I recall during the hearings on the bill it appeared as though this bill was really divided into two parts. The first part of the bill was to tidy up all the other sections and the odds and ends of things that have grown up as worrisome developments as the condominium movement begins to flourish and mature in Ontario. The second theme was what to do about rental units.
It seems to me at this point that the suggestions made by the member for Carleton East are certainly worthy of consideration to sort out the rental problem, but I must say I do not feel capable now of making sure that all the details that have to be attended to will necessarily be taken care of by these amendments. What I would personally prefer is an undertaking by the minister that if the section as it now exists is passed, he would direct Condominium Ontario as its first priority to sort out the rental concern, and if necessary come back with a new section 54 in the new term.
The member for Carleton East has settled a number of particular points, and I share her view that it is a most serious area. I just don’t know if we can resolve all of the concerns so promptly today.
Ms. Gigantes: How many years do we have to wait?
Mr. Breithaupt: If the minister would work on that theme I would be prepared to accept, in general, the section as it now is, having Condominium Ontario sort out this concern forthwith. It may not be fully satisfactory to the member for Carleton East, but I think it would be a step which would thoroughly investigate and, hopefully, resolve this concern which has bothered a lot of condominium owners. I would appreciate it if the member has further comments, to see if that is a way that could be helpful.
Ms. Gigantes: Mr. Chairman, we have enough experience of how inoperative the current language in the legislation is in terms of providing any protection for consumers in this situation. We don’t need to wait any longer. There is nothing more we need to sort out. We need to write the legislation to help those individuals who are trapped in what has turned out to be a rental building and they have made a purchase in it.
How would you like to talk to two widows in one building who put down $50,000 cash, and tell them the law offers them no help? Don’t tell them to wait another year and a half so that maybe we will have a step forward. Let’s write this legislation now so that they can now go to court if they need to. That is what we are here for. We are not here to pass on stuff when people are being exposed like that. We are here to do something about it.
If you have any objections to any point in this motion say so. It is clear to you. You had it yesterday. If you wanted it typed out in full form you could have done it yourself. You know how to understand the law and legal language far easier than I do. Is there anything wrong with this motion?
Mr. Breithaupt: I’m not saying there’s anything wrong with the motion I recognize that the member is very concerned about these two points. My only approach is that I would hope whatever we do will thoroughly resolve the problem. The suggestion I made was only an idea, if in fact there is a better way of dealing with it.
Ms. Gigantes: You are putting it off again. That’s what you are doing.
Mr. Breithaupt: This would in no way be a matter of putting anything off for the year and a half you happened to mention. I have no wish to do anything like that.
Ms. Gigantes: How are those women going to get to court?
Mr. Martel: How can you force them to do anything?
Mr. Chairman: Order.
Mr. Breithaupt: I am prepared at least to listen.
Mr. Makarchuk: If we followed the philosophy of the member for Kitchener, we would still be living in caves. You don’t come out of the cave because you’re not sure what is really going to happen out there in the world. You want everything perfectly explained and perfectly understood and perfectly written down before you are going to move. Consequently, you will never move. You should realize that and you do realize that; I am sure you do.
What we have here is a motion that perhaps is not perfect. Perhaps it could be brushed up. As I said earlier, the minister’s assistants are all here and they could clean it up if necessary. I want to stress to the minister, and it is unfortunate he was not on the committee at the time when the hearings were held on the condominium legislation, the message was coming through loud and clear, over and over again, from the people who live in condominiums that we have to deal with the rental problem. We have to deal with this matter of units being rented out. We have to resolve the problem.
That was one of the major requests. You are putting in legislation now that doesn’t deal with the problem. We have an amendment that does provide a solution, so why don’t you accept it and let’s get on with it?
Mr. Kennedy: I would like to address that. As I recall the hearings, when the Federation of Ontario Condominium Associations came before the committee they themselves at that time didn’t seem to have a precise answer to this problem. It is a problem and one we are concerned about.
Could we have assurance from the minister that he will take a look at this and try to come up with something more precise? This isn’t carved in stone, nor is any other legislation. Could we come up with a clause that will answer the question?
Ms. Gigantes: Oh, come on. Let’s do it now. What are you waiting for? What is wrong with this? Can you point to anything?
Mr. Kennedy: I don’t think this answers it. The matter of the length of rental periods, the accommodation, the number of families or the number of people who gain access to a unit is of concern to the remainder of the condominium owners and it needs further examination. I would like to hear from the minister on that.
Mr. M. N. Davison: About the last thing it needs is to be studied to death again. The member for Carleton East raised this problem --
Mr. Kennedy: It’s another issue.
Mr. M. N. Davison: -- weeks and weeks ago when we sat in the justice committee.
Mr. Kennedy: The federation couldn’t agree on it. Are you better than the federation? That’s what you are saying.
Mr. M. N. Davison: She proposed an amendment then. It was agreed that she should go off and think about it for a while longer, that she should have more time to work out the amendment.
The members who were on the committee remember that. That is exactly what she has done. She has come back with an amendment that works, that addresses itself to an immediate and serious problem.
For the life of me I cannot understand the resistance of the Liberals and Tories to accept such an amendment. It’s clear, it’s simple and it addresses itself to the problem. Why put it off for another year or a year and a half for some other group to study, to bring back and go to committee, to come back in and then be passed? What are you going to do, send it out again then?
You have a really serious problem that needs a solution right away. Here’s the solution. I think you should be voting for it.
Ms. Gigantes: What is the legislation for?
Mr. Kennedy: I would like to see the federation study it.
Mr. Martel: Does Darwin Kealey need another job? Do you think he needs another study?
Mr. Philip: I would like to ask the two members from Mississauga to consider this problem. Ottawa happens to be the centre of the problem now. But large developments are slated for areas in Mississauga. Either you act now, or this will come back to haunt you in your tidings a year or a year and a half from now.
Mr. Kennedy: It is not carved in stone.
Mr. Martel: When you undertake major legislation it takes a long time for an amendment.
Mr. Pope: I wanted to deal with just one point in the amendment which might concern me somewhat. As I understand the last paragraph of your amendment on page two, you deal with the exemption provision of paragraph 54. It says it now appears in the bill, and I assume that means the clause that reads: “This section is not applied to the renewal of a lease of a unit or proposed unit where the lease was entered into before an agreement of purchase and sale of that unit or proposed unit included in the property is entered into.” I think that is what you are dealing with.
I have some problems with the exemption for renewals, dealing I guess principally with the problems of security of tenure of tenants who are in the premises and the ability to have them removed from the premises. I am not trying to throw up a straw man as my friend, the member for Brantford, has said. I am just wondering how that could work. I have some concerns about the people who are now occupying condominium units under the terms of the lease.
Ms. Gigantes: I don’t understand the nature of the member’s problem. If we are going to place any limitations on leases -- and there are limitations in the existing bill, in the act and in the motion before you. This is what the section is about. It is about placing limitations on leases in condominiums, for good reasons. There are limitations for example, that fall under subsection 4 of section 54 of the bill before us: “A declarant or proposed declarant may grant leases of a unit or proposed unit for residential purposes for a period in each case not exceeding two years including renewals, provided that subsection 1 is complied with in respect of each lease.”
That means you can only have a lease on a unit that covers, with renewals, a period of two years. What happens to the person in there? Obviously, the lease is confined within that period of time. That’s simple. That’s all that is involved. The same would be true of any lease in terms of subsection 5. I see no reason for an exemption just because a lease was set up before any unit has been sold. That’s what subsection 5 is speaking to. It is talking about a situation where a developer before he sells any units creates a lease.
Are we going to leave in the legislation a statement that of all other leases this lease, or it could be these 50 leases, shall not be touched, can not be confined by the legislation? What sense does that make? Why is that section there? I don’t like the smell of that section. We’ve never even had a workable section 54-55 in the old bill. We’ve never had it workable in that section so that we could see what is wrong with subsection 5, because people never even get a chance to get to court under this section.
They are getting battered around and ripped off. The people who are most vulnerable, and the minister knows it, are elderly people, new home owners with small children. The people who are buying these units and getting stuck are some of the most vulnerable people. I just can’t see any reason why we should wait any longer.
Mr. Kennedy: I still haven’t received a copy of the amendment. I wish it had been proposed earlier on, even yesterday, to have a look at the thing. It worries me that if there are changes made I would want them done right.
Ms. Gigantes: It was in the minister’s office yesterday.
Mr. M. N. Davison: Weeks ago.
Mr. Kennedy: I certainly am not prepared to go along with that without even having seen it. It’s a real worry to me and I would like to see it, as the House leader of the Liberals mentioned, or the member for Kitchener.
Mr. Makarchuk: We just want it on record that you favour rentals in condominiums.
Mr. Warner: I am a bit puzzled by the atmosphere. I gather from earlier remarks made by the minister that be appreciates the principle that is involved in the amendment.
Hon. Mr. Drea: I have made no remark, period.
Mr. Warner: I took it that the nodding of your head didn’t mean that you were falling asleep.
Hon. Mr. Drea: It might have.
Mr. Makarchuk: You had that look of concern on your face.
Mr. Warner: I took it that you appreciated the problem that exists with the rental, that you understand that it’s real and that it’s there and that you could support the principle that’s involved. I take it from comments made by the member for Kitchener that he also appreciates the principle involved, that it’s a serious problem and that he would be prepared to support the principle involved in this amendment. That being the case, where we have all three parties understanding the problem and appreciating that it’s serious and able to support the principle involved in my colleague’s amendment, then what remains is to arrive at a wording which is agreeable to all parties.
If that’s the task ahead of us, perhaps I what needs to be done is that the minister give it some thought, allow the staff some time to take another look at the amendment and for us to discuss it later on and pass it. Anything short of that, it seems to me, means that this Legislature by a majority will close off the only available answer that we have at this moment to a very serious problem. It’s happening in my riding as well as in other ridings. I suspect it’s probably happening in Scarborough Centre. I don’t know for sure but I know it’s happening in Scarborough-Ellesmere. I would ask the minister to give it some very serious thought before he closes off the one answer that we have been given to date to handle the very serious problem.
Hon. Mr. Drea: I suppose it’s redundant to add anything. Every speaker who has been up has recognized the problem. There is no question there’s a problem. The problem goes far beyond some of the ones you have outlined. The ones that presumably are of most concern to the member for Carleton East are developer related. I presume that’s where the specific problem in her area exists. By the same token, there are owners who are terribly excited and terribly concerned about the fact that the owner across the hall has suddenly ceased to live there and is now renting. That’s the thing that your particular amendment did not touch.
Ms. Gigantes: What are you talking about? The section doesn’t deal with that. It has nothing to do with that.
Hon. Mr. Drea: It doesn’t deal with it? I am just going through the problem. Secondly, we have again a considerable concern that either individuals or investment organizations are buying up condominium units with the full intention that they will be rental forever. This is again a very serious problem, which is only really learned by the person who buys a condominium when the situation emerges. That makes it even worse because some of the previous attempts to correct it have been that one would disclose whether there were going to be rentals and so on and so forth.
There is no question that there is a problem. The people who are directly involved and the people who have to live with it seven days a week -- and I talk about the federation -- know the problem painfully well. They feel that this amendment at this time is premature. They feel that there has to be an in-depth and a rapid in-depth solution -- in not a year and a half, not anything like that. They are talking about discussion presumably over the winter -- just the way that rent review is being considered over the winter -- for implementation in the spring.
What concerns me is if we move now with the best of intentions to meet a problem, do we inadvertently create a bigger problem? Instead of the people of the place being in a half rental or two-thirds rental building and having a feeling of great frustration, it becomes so tight that there are empty units which are even worse in terms of the person who has purchased. Empty units mean there will be financial instability for quite some time and that somehow, no matter what the work, when the unit becomes registered, financial instability prior to that always reflects itself two or three years down.
I suppose the only simple and fundamental answer that I think everyone could agree on -- and it is far too Draconian -- would be to say simply a condominium is a purchase operation and, notwithstanding the fact that you have to wait a period of time to see if the condominium can be registered and a corporation formed, there should be an almost total sanction against renting or leasing. As I say, that’s too Draconian, but it is probably the only universal or simplistic approach at this time.
It is also very significant that the committee which studied this came to only one conclusion, namely, that this is indeed an enormous and serious problem. There is the particular one that the member for Carleton East has addressed herself to in this amendment. There are the emerging ones that the member for Etobicoke and the member for Kitchener have predicted will soon be here, which are variations of the particular problem in the Ottawa area, and there are the other two that I have mentioned.
I prefer the approach of having the federation, through Condominium Ontario, get out there, do it and bring it in. As legislators -- and I do not mean to disparage the member for Carleton East, I don’t think in these various committees we have yet been able to come to grips with the total problem. The member for Carleton East may very well have come to grips with part of the problem -- and rightfully so -- since that is the one that is of concern to her constituents. But the difficulty is that there has to be an overall approach.
Mr. Martel: You should deal with that one and move on to the next ones as they arise.
Hon. Mr. Drea: So far there hasn’t been a consensus in the committee and there hasn’t been a consensus in the House. There has been an approach offered by the member for Kitchener and it obviously has been responded to by the Federation of Ontario Condominium Associations. They feel that is the route to go. They are concerned about making it too tight or too loose. I think it can be done on a priority basis and in a very rapid way.
Mr. Warner: How long?
Hon. Mr. Drea: I think we would be able to consider it in the spring. The approach they might bring back in might be absolutely Draconian and we would not want to consider it. I think that is fair. I don’t support the idea that everything has to be in a year to a year and a half. We are going to do rent review clause by clause, I understand, in nine days, and have the bill brought back into the House. Surely this can be done in the same period of time. I would commend it to the members when they consider this matter.
Mr. Warner: You are dreaming again to suggest nine days.
Ms. Gigantes: The minister is saying that there is a larger problem with rentals. Of course there is. But are we to say that no bread is better than half a loaf? Is that the theory we are operating on? If we can see the solution to this particular kind of situation, we should move on it now instead of waiting. How long do people have to wait when they have been caught in this situation?
I would like to ask the minister is the two-year restriction now in the legislation real in his mind? Is it real in the mind of the minister that there is a two-year restriction on leasing plus renewals? Has he ever heard of a case where it was enforced? No, of course he hasn’t because there has never been a case where it has been enforced. Ask Audrey Loeb Burns.
I suggest to him that that two-year restriction that is in there has never been real. It has never been any help to anybody who has been caught. One can’t go to court under section 54, or the old section 55. It is absolutely useless to a consumer.
That two-year restriction was written in the legislation before, but it wasn’t real. Somebody must have accepted it two years ago, but have known it wasn’t going to be real. Somebody must have accepted that legislation. Somebody must have known that two-year restriction was not going to be operative and said, “Oh, it doesn’t matter.” But now, when we propose to make it operative, and that is what this motion speaks to, what a hoo-ha we get: “Oh, heavens no, let’s study it.” What nonsense! Is the minister confessing -- because this amounts to an open admission -- that the two-year restriction in the legislation was known to be meaningless?
The whole section is such confused mush. Let us tighten it up. Let us say to all those people who have been caught in a bad market, with an unscrupulous developer perhaps trying to deal with a bad market and doing his best to save his skin -- let us say to those people: “Look, the two-year restriction you have been reading in there but every lawyer has been telling you you can’t use for your protection in your case, that two-year restriction has some meaning.”
Surely we owe it to those people. They have had that legislation there tantalizing them. They come to this ministry, they come to their MPPs or they go to a lawyer, and they are told, “Section 54 doesn’t help you.” Let’s make it help them. Let’s take that small step.
If the minister wants to have another reference or another study of the rental situation as a whole, let him go ahead. I don’t think there is an easy solution to the total rental problem. But section 54 deals specifically with one kind of rental problem. Let us move forward in that area.
Mr. Martel: May I ask the minister one thing? He indicates that he accepts there is a problem. I listened very carefully to his answer. He said that the amendment proposed by my colleague would resolve that one problem but that there were other problems that were developing, if I understood him correctly, that we don’t even know about yet.
Hon. Mr. Drea: They are there.
Mr. Martel: Yes, they are there -- some are there. But if this amendment resolves one problem, it is one less to deal with. The minister should accept that amendment, have his study which would look into the other areas, and then bring in resolutions to those problems as we move ahead. That is what we do with all legislation. When new legislation is introduced, or there are major changes, we give it time to see what other problems develop and we bring in amendments to the new law as we go along.
As I say, I listened carefully to the minister, and he thought this might address and resolve that problem. Well, why doesn’t the minister accept it and then establish his committee to look into the other areas which are apparently starting to come forward now? Why wait? If we can get this one out of our hair, then we can deal with the others as solutions are arrived at which would benefit the consumer.
Mr. Warner: Why wait for spring? Do it now.
Hon. Mr. Drea: My concern is that in the solving of the problem, if indeed that amendment will solve it -- I don’t think I said it would; I said I thought it would bring some efforts to bear on it -- the situations to which the member for Etobicoke and the member for Kitchener have referred aren’t around the corner, they are here, although not in the depth and the dimension of this particular developer type of thing in the Ottawa area.
My concern is that in going that route there are some implications and some spinoffs from going in the direction of the amendment in the Ottawa situation as against condominium owners and condominium developments across the province. This is my concern.
I think the one thing we have to keep in mind from time to time is that owners of condominium units want to rent them; sometimes they are transferred -- a lot of logical things. Because of the differences there are between condominium living and detached house living, they want to lease them and so on. By making it too tight, it might become very difficult for them to do so. Of course, these things are always inadvertent.
Quite frankly, my concern is that the problem has to be approached as a rental problem, whether it is a rental by the developer who decides after selling five or 10 units that the market simply isn’t there and he is going to rent for a considerable period of time, owners buying them for investment purposes, or developers using straw men to buy units and then for the purpose of renting them out afterwards. That’s something that is now becoming very apparent in the Metro area. It has been brought to our attention by the federation. They want to really take a look at all this and bring in one package.
Ms. Gigantes: Will the minister look at the section we’re dealing with? It begins, in subsection 1, “a declarant or proposed declarant shall not grant a lease of a unit or proposed unit for residential purposes.” We’re not talking about one guy who owns a unit and gets transferred to Vancouver. We’re talking about the declarant or proposed declarant. This section deals with restrictions on the declarant and proposed declarant, not with the owner of unit number one.
Mr. McClellan: Leave off the red herring. Leave off the straw man.
Mr. Warner: And the blue herring.
Hon. Mr. Drea: I’m perfectly aware of what this section does --
Ms. Gigantes: So what are you talking about?
Hon. Mr. Drea: -- but I am talking about the entire problem. You raised that before and I answered it exactly the same way.
Mr. McClellan: Oh, I see. A broad overview, the universal man. Wonderful.
Mr. Warner: It will be dealt with in the fullness of time.
Mr. Philip: I simply have the same questions. I still don’t understand what the minister’s problems are and there is nothing he has said that has clarified it. It’s simply confusing.
Ms. Gigantes: His problems are the developers don’t like that section. That is the problem with his party.
Mr. Philip: In no way does it interfere, as he seemed to imply in his statement before the last one, with the average condominium owner renting out his unit. If that isn’t a problem, then what is the problem? What is in that global problem? I’d like the minister to answer that. He hasn’t given an answer so far that I can understand.
Hon. Mr. Drea: I’ve tried on two occasions and if I haven’t been able to provide an answer to the satisfaction of the member by now, I don’t really think I could add any more. I think he understands exactly what I’m talking about. He may not accept my views on it, but he understands my position.
Ms. Gigantes: I think we have to look seriously at the only kind of action that can follow on a restriction under section 54, the only way in which a unit owner can have recourse before the court. The only thing he can expect if he goes before the court is contained in the existing section 2. I’ll read it to you, Mr. Chairman:
“Any person notified under clause (b) of subsection 1 may, within 21 days after receiving the notice,” this is the notice of his lease, “and on written notice to the declarant, apply to a judge of a county or district court and the judge, if he is of the opinion that the declarant has not taken all reasonable steps to sell the unit, may, by order, prohibit the declarant from leasing the unit or grant other relief as he considers proper.”
Is that such a terrible thing to make effective? It’s been sitting there in law, but nobody has been able to use the law because the law is written so that it can’t be used.
I suggest to you, Mr. Minister, I’m not going to let you get away with standing there and saying we have to tackle the whole rental problem. Your problem is you’re a member of a government that protects developers and not people. I’m tired of the crap you put forward on this amendment.
It’s shocking. It’s absolutely shocking. Your staff will tell you there hasn’t been one case where a consumer has had protection against leasing by a developer -- not by the guy down the hall, by an original developer. There is not one case where a consumer has had protection under this section and you sit and give us reasons why you won’t tighten it. We might tighten it too much -- baloney. You’re protecting developers, that’s what you’re doing.
Mr. Pope: I’m sorry to belabour the point. Has the honourable member had a chance to determine the possible consequences of deleting the exemption section? I’m thinking of tenants who have a right to renew for a term not exceeding two years and what the consequences could be in existing tenancy agreements. I’m not sure if I understand it.
Ms. Gigantes: Can I point out once again to the member, there is restriction in the legislation now. It’s a two-year restriction. So what’s new? Why shouldn’t all leases be subject to that restriction? Why should a developer who signs leases before he sells a unit in the building be able to renew those leases perpetually? Why shouldn’t they be subject to the two-year restriction?
Mr. Pope: I am sorry, I guess that is where we are having our misunderstanding. I am talking about situations where developers will lease because of the marketability problems on a month-to-month basis, and allow renewals at the option of the tenant on a month-to-month basis for a period of time not to exceed two years, or I am talking about a condition where a developer will lease for a period of one year for a one-year renewal. The renewal period would still fall within the two-year time frame. That is the kind of problem I am worried about.
I appreciate the point the member is making about the other aspects of renewal beyond the two-year period, and I am not addressing myself to that. I am addressing myself to renewals within the two-year time frame.
Ms. Gigantes: Mr. Chairman, I don’t understand the member’s difficulties. If he looks at subsection 4 of section 54 it reads: “A declarant or proposed declarant may grant leases of a unit -- .” He obviously isn’t interested in hearing, but I will explain to anybody who has been confused by his question.
Mr. McClellan: Why does the member for Cochrane South ask a question and then leave the House when the answer is being given?
Ms. Gigantes: Subsection 4 reads: “A declarant or proposed declarant may grant leases of a unit or proposed unit for residential purposes for a period in each case not exceeding two years, including renewals, provided that subsection 1 is complied with in respect of each lease.”
What we are dealing with is a restriction on the lease or leases that can be put on a particular unit, we are not dealing with a lease as it applies to an individual, we can have five individuals in a two-year period, under this section, renting a particular unit. All this subsection speaks to is how long a particular unit may be up for rent. The subsection says “for ... two years, including renewals.” It doesn’t apply at all to the term that any individual may have in a lease with the declarant. Either the member for Cochrane South doesn’t understand subsection 4, or they are deliberately misleading questions.
Mr. McClellan: We will never know since the member who asked them walked out of the House.
Hon. Mr. Drea: My parliamentary assistant received a very urgent phone message. That is why be left. It was very urgent. In fairness to him, while the member for Carleton East was speaking, he was attempting to say something across the floor to explain that.
Mr. Martel: Might I rise on a point of order, Mr. Chairman? Under the provisional rules of the House which were adopted on April 18, 1978, it says, “Notwithstanding the application of standing order eight or any other order of the House, when the House is in committee to consider bills a minister or parliamentary assistant having charge of a bill may occupy his seat in the front row.” It doesn’t say “and.” It doesn’t say both of them, each taking turns to answer.
Who is carrying the bill? I just put that to you, Mr. Chairman, because I feel it is a contravention of the existing order as to what is going on this morning. I don’t know who wants to answer, or if you want to rule, but that was adopted on April 18, 1978. I think you should rule on it.
Mr. Nixon: Mr. Chairman, before you make a ruling, I feel very strongly it is to the advantage of all concerned that the parliamentary assistant is there to assist in this matter. If you are asked to rule by the House leader of the NDP on such a nit-picking little business about “and” or “or” I would suggest to you that in the interests of having an effective Legislature, what is happening this morning is something that really ought to be supported if it can be in our rules, and if it can’t be I would hope our rules can be amended permitting it.
Mr. Martel: That’s a good idea.
Mr. Nixon: What is the matter with you? Didn’t you get up for breakfast time?
Mr. Martel: You voted for it.
Mr. Breaugh: Mr. Chairman if I --
Mr. Chairman: Order. The honourable member is not in his seat.
Mr. Martel: Mr. Chairman, you’re in order now.
Mr. Nixon: Yes, the Chairman is trying to put down the NDP.
Mr. Martel: You’re calling my colleague out of order, and yet the provisional rules of the House say that one of them will be there. You can’t have it both ways. That’s why you have rules.
Whether my friend from Brant-Oxford-Norfolk likes it or not, you either apply the rules or you don’t. If it is picayune, then I suggest you refer it to the standing committee.
Mr. Nixon: I didn’t say picayune. I said nit-picking.
Mr. Martel: Then refer it to the standing committee and they can consider it.
Mr. Breithaupt: If it is simply acknowledged that the parliamentary assistant has the carriage of the bill, then he is certainly properly in his place and the minister is properly there as well.
Mr. Kerrio: It is still picayune, and the member for Sudbury East knows it.
Mr. Chairman: I appreciate the point of order raised by the member for Sudbury East. According to the motion, it is the minister who is carrying the legislation. Therefore I would have to rule that it would be out of order for the parliamentary assistant to participate in the debate from the seat he is in now.
Mr. Handleman: Move to your own seat.
Mr. Kennedy: You are ostracized.
Mr. Kerrio: This is one of the low spots in the Legislature.
Mr. Nixon: It is a highlight in the progress to parliamentary democracy.
Mr. Kennedy: The NDP are impeding the passing of the bill.
Mr. Chairman: All those in favour of the motion will please say “aye.”
All those opposed will please say “nay.”
In my opinion, the nays have it.
Mr. Conway: And the horde loses again.
Mr. Makarchuk: The Social Credit Party --
Mr. Kerrio: Get back into your cage.
On section 55:
Mr. Chairman: Mr. M. N. Davison moves that section 55 of the bill be amended by adding the words “subsection 3 of section 26,” between the words “contravenes” and “section” in the first line.
Mr. M. N. Davison further moves that section 55 of the bill be amended by adding the words “subsections 5, 6 or 7 of section 52” between the words “40, and subsection” in the second line.
Mr. M. N. Davison: This amendment, which wasn’t put in committee because we didn’t have time to deal with the offences section in the justice committee, results from people in the condominium movement coming before the committee and making suggestions as to what should be and what should not be an offence under the act. I realize that just because people in the condominium movement want it, does not guarantee its passage. But they do have good reasons for proposing what I put forward in this amendment.
Section 26(3), as you will know Mr. Chairman, and as the minister will most likely know, is the section regarding items and things that have to be turned over to the new board by the declarant. They range from fairly small things, such as the seal of the corporation, to very broad and real matters. For example, subsection 3(m), before the minister was able to do his knife job on it, had requested that these include “a list detailing the original costs and current replacement costs and life expectancy under normal maintenance conditions of all major capital items in the property, including, where applicable, those items set out in subsection 1 of section 36.” The entire subsection is a list of very important items such as that which must be given by the declarants at the first meeting. So there is a reason for having that amendment accepted other than the fact that it’s supported by the majority of people in the condominium movement.
The second part of the amendment, which refers to section 52 of the bill, and specifically as reprinted subsections 5, 6 and 7, is a fairly important one. Section 52(5) is rather interesting. It sets out what happens when the declarant or proposed declarant lies to the purchaser or makes misleading representation to the purchaser. According to the way the act is now, the purchaser is able to sue the declarant. Terrific; but there is no penalty imposed upon the declarant or proposed declarant by the legislation.
I realize it’s not going to kill a declarant if we charge him a couple of thousand dollars for lying to purchasers or giving them misleading information, but what is addressed here -- through me, if I might, from the people in the condominium movement -- is that in their experience it is very difficult to go into court against declarants for any number of reasons, not the least of which is the amount of money a developer can throw around so freely. They feel if section 52(5) were an offence under the legislation, it would be much clearer and they would be much happier about that kind of a designation in that it would help them before the courts.
It’s just wrong that a developer or a declarant should do that; and when we catch them doing it they should be fined. The law should come down as hard as possible on them, because the last thing we need is a declarant or developer lying to the purchaser. That should be an offence.
The next subsection I propose should be an offence is 52(6). This is the disclosure statement. It is not as tough a disclosure statement as I would have liked. Perhaps it’s a bit tougher than the Tories wanted, because at one point they moved to delete the entire thing. This is an essential document that must go to the purchaser and must be accurate. If we catch a developer or declarant out on that, we should come down like a ton of bricks, and one of the ways to ensure that is to have it listed as an offence in the legislation.
The other subsection, 52(7), is an expansion of one of the subordinate clauses in subsection 6, so I think it should also be added. Those are the reasons I suggest those particular sections of the act should be added to the offences section.
Mr. Breithaupt: The member for Hamilton Centre has very clearly pointed out the need for including these additional areas under the offences section. I believe he’s correct in the points of view which be raised, and I would encourage the minister to include these two additional areas so that all the offences and responsibilities for the declarants are clearly known and that penalties will flow from their abuse. I would favour the amendment and I hope the minister will accept it.
Mr. Chairman: Any further comments or questions on the amendment? Are you ready for the question? Shall the amendment carry?
Motion agreed to.
Mr. Chairman: Any further amendment on section 55? The member for Hamilton Centre.
Mr. M. N. Davison: I have another amendment on 55 which is necessitated by an amendment I propose to introduce in a short time dealing with the registrar’s office. Perhaps we can do with this amendment what we did with other amendments I raised earlier that depended on following amendments being passed or defeated.
Mr. Chairman: Is the member suggesting standing down this section?
Mr. M. N. Davison: Yes.
Mr. Chairman: Does the committee agree to standing down section 55?
On section 56:
Mr. Chairman: Hon. Mr. Drea moves that section 56 be amended by adding thereto the following subsection:
“11. The bureau may exempt corporations from the provisions of subsections 2 and 3 of section 36 as set out in subsection 7 of section 36.”
Mr. M. N. Davison: We agree to this as a housekeeping change necessitated by an earlier amendment that was approved.
Mr. Breithaupt: We are prepared to support it.
Mr. Chairman: Shall the motion carry?
Motion agreed to.
Mr. Chairman: Mr. Davison moves that sections 56 and 57 of the bill be struck out and the following substituted therefor:
“56(1) There shall be a registrar of condominiums who shall be appointed by the Lieutenant Governor in Council.
“(2) The registrar of condominiums may exercise the powers and shall perform the duties conferred or imposed upon him by or under this act.
“(3) The registrar shall,
“(a) provide an information and advisory service to purchasers of condominium units for residential purposes and issue information pamphlets in such languages as the registrar considers necessary; and
“(b) make available to the public such information in respect of declarance as is available to the registrar.
“(4) No declaration shall be registered that is not approved by the registrar.
“(5) No person shall enter into an agreement to manage a property unless he is the holder of a licence issued by the registrar.
“(6) No person shall enter into an agreement of purchase and sale for a proposed unit for the residential purposes as a vendor where the agreement provides for a deposit to be held by the vendor pending approval of the declaration by the registrar, and where such an agreement is made, it is voidable at the option of the purchaser.
“(7) The registrar shall issue licences to manage properties and an applicant for a licence is entitled to a licence or renewal of licence except where,
“(a) having regard to his financial position the applicant cannot be reasonably expected to be financially responsible in the conduct of his business; or
“(b) the past conduct of the applicant affords reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty; or
“(c) the applicant is a corporation and,
“(i) having regard to its financial position, it cannot reasonably be expected to be financially responsible in the conduct of its business, or
“(ii) the past conduct of its officers or directors affords reasonable grounds for belief that its business will not be carried on in accord and with the law and with integrity and honesty; or
“(d) the applicant is carrying on activities that are or will be, if the applicant is licensed, in contravention of this act or the regulations.
“(8) A proposed declarant is entitled to have his declaration approved by the registrar except where,
“(a) having regard to his financial position, the proposed declarant cannot reasonably be expected to be financially responsible in the conduct of his business; or
“(b) the past conduct of the proposed declarant affords reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty; or
“(c) the proposed declarant is a corporation and,
“(i) having regard to its financial position, it cannot reasonably be expected to be financially responsible in the conduct of its business, or
“(ii) the past conduct of its officers or directors affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty; or
“(d) the proposed declarant is carrying on activities that are in contravention of this act or the regulations.
“(9) Subject to subsection 11, the registrar may refuse to issue a licence to an applicant or to approve a declaration where in the registrar’s opinion the applicant or proposed declarant is disentitled to registration or approval under subsection 7 or 8.
“(10) Subject to subsection 11, the registrar may refuse to renew or may suspend or revoke a licence for any reason that would disentitle the licensee to a licence under subsection 7 if he were an applicant or where the licence is in breach of a term or condition of the licence.
“(11) Where the registrar proposes,
“(a) to refuse to approve a declaration;
“(b) to refuse to grant or renew a licence, or,
“(c) to suspend or revoke a licence, he shall serve notice of his proposal together with written reasons therefor on the proposed declarant, applicant or licensee as the case may be.
“(12) A notice under subsection 11 shall inform the proposed declarant, applicant or licensee that he is entitled to a hearing by the tribunal if he mails or delivers, within 15 days after the notice under subsection 11 is sewed on him, notice in writing requiring a hearing to the registrar and the tribunal, and he may so require such a hearing.
“(13) Where a proposed declarant, applicant or licensee does not require a hearing by the tribunal in accordance with subsection 12, the registrar may carry out the proposal stated in his notice under subsection 11.
“(14) Where a proposed declarant, applicant or licensee requires a hearing by the tribunal in accordance with subsection 12, the tribunal shall appoint a time for and hold the hearing, and on the application of the registrar at the hearing may, by order, direct the registrar to carry out his proposal or refrain from carrying out his proposal and to take such action as the tribunal considers the registrar ought to take in accordance with this act and the regulations, and for such purposes the tribunal may substitute its opinion for that of the registrar.
“(15) The tribunal may attach such terms and conditions to its order or to the licence as it considers proper to give effect to the purpose of this act.
“(16) The registrar, the proposed declarant, applicant or licensee who has required a hearing and such other persons as the tribunal may specify are parties to the proceedings before the tribunal under this section.
“(17) Where within the time prescribed therefor or, if no time is prescribed before expiry of his licence, a licensee has applied for renewal of his licence and paid the prescribed fee, his registration shall be deemed to continue,
“(a) until renewal is granted, or
“(b) where he is served with notice that the registrar proposes to refuse to grant the renewal until the time for giving notice requiring a hearing has expired and where a hearing is required until the tribunal has made its order.
“(18) Where a declaration is submitted to the registrar for approval and approval is refused, every purchaser under an agreement of purchase and sale of a proposed unit for residential purposes within the property referred to in the declaration may rescind the agreement.
“(19) Where the proposed declarant enters into an agreement of purchase and sale for a proposed unit for residential purposes, the proposed declarant shall give to the purchaser under the agreement a written notice of the purchaser’s rights under subsection 5.
“(20) Every proposed declarant who intends to sell proposed units for residential purposes shall file with the registrar at the time that the declaration is submitted to the registrar for approval a disclosure statement containing the information set out in section 52(6).
“(21) Where the registrar receives a complaint in respect of the declarant or a person licensed to manage a property and so requests in writing, the person receiving the request shall furnish the registrar with such information respecting the matter complained of as the registrar requires.
“(22) Every declarant shall file with the registrar the material set out in clauses f, g, h and i of section 26(3) prior to the meeting under section 26(1).
“(23) The registrar or any person designated by him in writing may at any reasonable time enter upon the business premises of a declarant, proposed declarant or a person licensed to manage properties to make an inspection to ensure that the provisions of this act and the regulations are being complied with.
“(57(1) The Lieutenant Governor in Council shall appoint review officers who shall perform the duties and exercise the powers given to them by this act and the regulations and the officers so appointed shall be civil servants within the meaning of the Public Service Act.
“(2) Where there is a dispute between a corporation and an owner or between two or more owners in respect of any matter relating to this act, the declaration, bylaws or rules, any party to the dispute may, prior to the commencement of any court proceeding in respect of the same matter, refer the matter in dispute to the tribunal for resolution and shall notify all other parties affected.
“(3) Within 14 clear days after the matter has been referred to the tribunal, the tribunal shall give written notice to all parties of the date, time and place for the consideration of the matter in dispute and shall designate a review officer to hear the matter in dispute.
“(4) For purpose of a hearing under subsection 3, the review officer may inquire into any matter relevant to the subject matter of the dispute, whether or not previously brought to his attention by the parties.
“(5) Upon completing the hearing, the review officer may make an order ordering any party to the hearing to do or to refrain from doing any act that is the subject matter of the hearing.
“(6) An order under subsection 5 shall state that every party to the hearing is entitled to appeal the order to the tribunal and shall specify the place where the appeal may be filed.
“(7) On the request of any party to the hearing, the review officer shall file a copy of any order made by him under subsection 5 in the office of the registrar of the Supreme Court under section 19 of the Statutory Powers Procedure Act, 1971, that applies thereto.
“(8) Except as provided in subsection 7 the Statutory Powers Procedure Act, 1971, does not apply to proceedings before the review officer.
“(9) Every party to a hearing may appeal a review officer’s order by filing a notice of appeal with the tribunal within 21 days after being served with notice of the review officer’s order.
“(10) On an appeal, the tribunal may proceed by way of a hearing de novo and, after the hearing, the tribunal may make any order it considers just and equitable and for such purposes the tribunal shall substitute its order for that of the review officer.
“(11) The registrar may appoint a provincial advisory committee to advise him in matters relating to condominiums.
“(12) The provincial advisory committee shall consist of seven members made up of not fewer than four members who represent owners of units for residential purposes.
“(13) The members of the provincial advisory committee shall be appointed for terms of one, two or three years and, having served a term, shall not be reappointed for at least two years.
“(14) When a vacancy occurs on the provincial advisory committee during a term of office, the registrar may fill the vacancy for the unexpired portion of the term.
“(15) The Lieutenant Governor in Council may direct payment out of such moneys as are appropriated therefor by the Legislature of the travelling expenses of the members of the provincial advisory committee and a per diem allowance for time spent by staff members in attending meetings, and of any expenses properly incurred by the committee in the carrying out of its duties.”
Mr. M. N. Davison: When it was first mentioned some time ago that a body should be created to deal with problems in the condominium world, it was suggested by most of the condominium corporations to the Kealey commission that a registrar of condominiums be established. The Kealey commission, when it reported back, agreed with that consensus of condominium corporations and others, that indeed there should be an office of the registrar.
For reasons best know to the government or the former minister or his staff, the former minister in his introduction of the bill did not propose the office of the registrar but indeed opted for something called the bureau, which was to be known as Condominium Ontario. In some ways, it performs a similar function. However any member comparing the amendments I have just offered to the current sections 56 and 57 of the legislation will see that the office of the registrar has much greater powers; it is an office that can answer questions and address problems that are not addressed by this act.
One of the problems we have had, as was pointed out earlier in the motion by my colleague from Carleton East, is that the act is defective in a number of ways, largely not in what it says but in what is doesn’t say and doesn’t do. There are all kinds of problems yet to be resolved in terms of condominiums.
When we were in committee I tried to propose amendments that would tighten up the registration process, but I didn’t get very far with them and only my party was supporting those amendments. The government’s position, as I understand it, is that at some later date they will come up with changes to the registration processes, the front-end processes.
Another example of that is the question of the people who manage these properties. This act is virtually silent when it comes to talking about control of property management. The registrar, as I propose the office, will have the power to license property management firms and to remove their licence. This does not just involve a list the registrar will keep in his office; there are fairly serious provisions set out in the amendments and anyone who wants to be licensed as a property manager will have to comply with them.
I would hope that the industry, in cooperation with the registrar’s office and with the provincial advisory committee, would start on a program that would allow for the education and proper training of people who want to go into property management of that sort. I think that is fine. I don’t think it is such a viable alternative under the bureau concept, because one of the major differences between the registrar concept and the bureau is the question of payment. If we pass this bureau concept, the government has said ordinary condominium unit owners must pay for the establishment of this bureau. That is about as sensible as asking tenants to pay for rent review. We didn’t ask that. I don’t know if it is a problem of scale in that there are 10 times as many tenants in Metro as there are condominium unit owners in the province. Do they have a louder voice? I suspect not. I suspect there is some other reason, but I am not sure I understand it or see it.
If we allow the government’s bureau as set out in sections 56 and 57 to go through, it means we are going to be responsible for charging those condominium unit owners to run a service to protect themselves, something the government should be doing in the first place.
With the office of the registrar as I propose it that is not going to be the case. It will be funded out of general revenue. The unit owners won’t have to pay for their own protection. That is one of the more important differences in the two concepts.
I have gone on at length and I’ll try not to take too much longer on this. The registrar will have the power, under the proposed amendment I have put forward, to have some effect at the front end of the process. Until the declaration is approved by the registrar it cannot be registered. For the first time, we will have somebody in this province who can move in early in the game. When the registrar sees the development corporation is not going to do what it should do or living up to what it should, he can do something about it. He’s going to have investigative capacities. He is going to be able to go out or send his people with instructions.
I think it’s going to be, or could be if the government had the will to follow it through, a very effective office. It would operate, as I see it, as an advisory and advocate service to condominium unit owners.
There is no one to speak for the condominium unit owners. One of the points used to sell the bureau, and I must say it has been effective because some positions have changed in the past year or so in regard to the registrar concept and the bureau concept, is the question of the fact that whatever organization we set up, a bureau or a registrar’s office, those involved should know what they are talking about. They should be people who have experience and an understanding. There’s nothing to prevent the registrar’s office from hiring such people.
Again, I am sure that will happen, but in my amendment I also propose an advisory committee to the registrar, on which the majority of the members would be owners or representatives of owners of the units. In this bureau affair we could get a bureau that was absolutely stacked in favour of the developer, the property manager, or the money lender. The interests and concerns of the owners could be down-played to a frightful degree.
On balance I think the bureau is a very wishy-washy affair that is probably not going to be terribly effective. It is going to cost the owners of the units money directly rather than be set up as part of the administration provincially with funding by the government. I think the proposal for a registrar’s office as I have outlined it is’ much better. I think members should support it.
There’s one final matter while we are on this. The Globe and Mail on September 27, 1978, had an advertisement in it.
Mr. Conway: That oracle of all wisdom.
Mr. M. N. Davison: I am not sure if the minister has seen it. As a matter of fact I hope the minister hasn’t seen it, because it says: “New government agency, Ontario. The Ontario government is in the process of setting up an agency to administer new legislation.” It goes on to explain the particular staff people there’s some interest in hiring and the salary levels, and it deals very much with property management and with an understanding of planning.
Do you know what it sounds like to me? It sounds very close to being an advertisement for people to work for the bureau, for Condominium Ontario. I would hope the minister will check in the files on this ad which was put out though Hickling-Johnston and make sure that’s not what this ad is. The Minister of Housing (Mr. Bennett) has not responded to questions as to what new legislation is supposedly going to be administered, but I would certainly be quite offended, and I think a lot of people would be quite offended, if it turned out this was an advertisement for the bureau, for Condominium Ontario, when it hadn’t even gone through the Legislature yet. The minister may not have a rapid answer to that.
Hon. Mr. Drea: I do.
Mr. M. N. Davison: I hope the minister has both a rapid and certain answer to that.
Hon. Mr. Drea: Yes; just to clear up that point the answer is no, period. No.
Mr. M. N. Davison: What is this hiring for, then? Who are you hiring for? Who is the government hiring?
Hon. Mr. Drea: Nobody is hiring anybody. That was an ad put out which has absolutely no bearing upon this act. Since Condominium Ontario will be running its own affairs how could we hire anybody for it? The answer to that is no.
Mr. M. N. Davison: What is this ad for? What new legislation would be administered by these people?
Hon. Mr. Drea: If it ever gets here, the residential tenancies commission.
Mr. M. N. Davison: It is for the Residential Tenancies Commission?
Hon. Mr. Drea: Just a moment; that is my understanding, I was not the minister when that ad was placed. You asked me if it was for the bureau. The answer is no.
Mr. M. N. Davison: We would be out of order if we started to discuss the Residential Tenancies Act at this point in time?
Mr. Deputy Chairman: Yes, you would be out of order.
Mr. M. N. Davison: We won’t be out of order when we go into estimates or when we go down to the social development committee later on. I find that to be most offensive, that the ministry would go out trying to hire people before they even passed the legislation. I’ll raise that later.
Hon. Mr. Drea: Just to put it in perspective, and I will say it now so the member doesn’t have an anxious time over Christmas, no one has been hired for the Residential Tenancy Commission. No one.
Mr. M. N. Davison: You are keeping them on a string.
Hon. Mr. Drea: No contracts, no interviews, no nothing.
Mr. Conway: Double negative or not.
Mr. Breithaupt: It was interesting to have the member for Hamilton Centre bring forward his amendments with respect to the creation of the registrar of condominiums. These amendments would, of course, entirely change the present sections 56 and 57 which are part of this bill. In reviewing the circumstances which have led to the creation of the bureau, it is interesting to see how this became part of the legislation. However, the historical involvement of it I don’t think need detain us this morning. What we have is a bureau which has been set up and which it is hoped will resolve the concerns of condominium owners as well as share in the overall aspect of the developers and managers in the duties which they have.
In discussions with the Federation of Ontario Condominium Associations, I am advised that the federation is prepared to accept the concept of the bureau and the resulting Condominium Ontario organization which will flow from it. As a result of their opinion on the subject, since they are clearly the most knowledgeable group and will have to work with and deal with this organization, we are prepared to accept the legislation as it appears in the statutes. As a result, we will oppose the amendments proposed to section 56 and 57.
Hon. Mr. Drea: I think there are only a few points that should be made at this time. We are going to oppose the amendment. I commend the member for Hamilton Centre, by the way, for the effort he put in to preparing such an exhaustive amendment. The fact of the matter is, when we are dealing with condominiums we are not dealing with tenants, we are dealing with home owners. Part of the function of Condominium Ontario, if you want to develop an analogy towards other home owners who live in detached homes rather than in the condominium concept, part of that goal is to improve the subdivision. In no way, shape or form is it practical for government to be involved in that type of operation. The fact of the matter is that Condominium Ontario will be run and operated by people in condominiums.
They will be able to use the experience that they have gained in their own time in condominiums, the experience that many of them have gained because of the fact that they became very active in the government or the board of directors in their own corporation. They will be able to pass that on to people coming in and buying a condominium and going through the registration phase where they become a corporation. I think quite frankly this is a very exciting thrust; it is not just deregulation, it reflects the growing maturity, the growing experience and a very special dedication it takes to be active in a condominium corporation because on few and far occasions is there any monetary reward.
They have chosen to enter into that type of living. Beyond that, they have also chosen to take a very active role in enhancing your community. I think that is to be commended. With the operation of Condominium Ontario or the bureau, the community or the condominium people themselves call the shots.
There has been one significant change. I referred to it earlier in my opening statement when I pointed out that, contrary to the impression that was left with the committee, the developer will pay. We do not need legislation for that to come about. I don’t want anybody to be concerned that because it isn’t specifically in the legislation it will not occur.
We have a letter of understanding and a letter of commitment from HUDAC that in the case of a condominium purchase, in addition to the amount of money that would ordinarily be paid to cover the insurance, the warranty and so forth, there will be a further fee, which the federation has suggested be $15; at least at this time -- they will be setting the fees in the future depending on theft needs. HUDAC will collect that and will dispense it automatically to the particular condominium corporation that will be affected.
We don’t need legislation for that, HUDAC is going to change its bylaws so that it will be able to do that. No problem is anticipated. We regard it as a most efficient way of helping Condominium Ontario to have adequate finances to do a great deal of work.
After all, they are going to enhance the developer in the field.
With this new system working purchase of a condominium will be more attractive than it is today. That is of benefit to the person who built it. I don’t think any of us disagree that that person shouldn’t make a profit. It has to be a viable type of construction. By the same token, the very presence of Condominium Ontario is going to make it more attractive. This means more people will buy, registrations will be faster,. there will be a number of new condominium corporations coming on stream and for the first time they will automatically be able to have that expertise.
I should say too, in closing, that the federation after debating this issue at its annual general meeting -- not just a board meeting -- has come clown four square on the side of Condominium Ontario. It not only opposes the office of registrar but any of the mechanics that would be associated with it.
These are the people who are out there. These are the people who have come to government and asked for a restructuring of the Condominium Act. These are the people who are looking confidently toward the future. I remind you that at their annual general meeting, after debating all the pros and cons, they have come down four square in favour of the concept that is outlined in this bill.
Mr. Philip: I find the minister’s remarks somewhat enlightening. He speaks about the annual general meeting of the federation. In fact my understanding is that there were about 15 or 20 people at that annual general meeting. I can’t help but wonder if the minister were to take this concept of Condominium Ontario to each and every condominium owner how they would feel about what amounts to simply an extra tax on them for a service that should be done by government.
The minister has just mentioned, and he mentioned in his opening remarks, that the Housing and Urban Development Association of Canada kindly agreed to give some $15 or so towards Condominium Ontario when a building is developed. No doubt that’s generous of them. However, one has to ask, what happens in areas such as mine where a majority of the condominiums are already built and where those people have an open-ended tax of $5 or $10 this year? -- what will it be further down the line? -- for services that are designed to clear up the kinds of negligence that the government should have cleared up years ago, as we pointed out these problems in the House?
I admit that it wasn’t the present minister’s fault. He has come in new, he’s trying to make some changes, and he is stuck with this particular piece of legislation which he has to defend. I can’t help but think that, judging from his past experience and from some of the statements he has made on various occasions that, were he to write the bill, or were it to be his bill, somehow this bill and this section would be different and he would have listened to the report of the Kealey commission.
One of the things which is clearly needed and which came out clearly in the Kealey commission reports and hearings is the need for some kind of licensing of management firms. This bill clearly doesn’t do that. The amendment would. It’s fairly clear, when you talk to certain reputable management companies, that they in turn would be quite comfortable and happy with a licensing system. They argue that fly-by-night organizations come in, temporarily undercut their market, make a mess, make a bad name for the industry, then suddenly disappear, and that a licensing system would clearly provide some kind of safeguard -- not just featherbedding for their industry but a safeguard for their industry and some safeguard for the consumer.
I would remind the minister of a section in the Kealey commission report which I think deals essentially with what may be the anxieties of some to go along with the amendments that we have proposed. I refer here to the section on the registrar, in chapter 12, in which the Kealey commission says:
“It could be argued that interference in the condominium market by a government body should not be permitted, that if a developer is willing to sell a condominium unit and the buyer is willing to buy then the transaction should not be interfered with. Rather than the government having to regulate the market, some may contend that the forces present in the open market would ensure that fair prices and services are provided. This philosophy clearly has not worked in the condominium market, as evidenced by the briefs presented at public hearings and by the growing media coverage of the problems of the condominium field.”
We have had briefs before our committee which have dealt with this. Clearly, the federation brief suggested this was acceptable to them. But I wonder how many condominium corporations out there, if they had to vote, would say it was acceptable to them. At a meeting of our own condominium association, the Etobicoke Condominium Association, the sentiment clearly was otherwise. When they looked at the options, they clearly opted for the Kealey recommendations over the recommendations or the policies of the minister.
It seems to me that what we are setting up is a rather dangerous kind of system. What we are setting up for the government -- and I must admit that the government is very clever in this -- is a body that can act as an excuse for its doing nothing. There is nothing in this bill that talks about how, democratically, the condominium owners will elect and control this thing called Condominium Ontario. So you have the option of the government setting up its own people and its own fronts and then using the reports or actions of that group as an excuse to say, “This is what condominium owners want.”
I don’t believe that condominium owners are dull enough or stupid enough to buy that kind of political skulduggery by the government. I don’t believe that condominium owners don’t want to control any organization they pay for. They have a legitimate right to form a voluntary organization without the government’s help, and that organization should surely lobby for condominium owners the same way that trade union groups, the chambers of commerce, the Ontario Federation of Agriculture are financed through their own sources to act as a legitimate democratic critic of the government.
What the government is trying to do in this --
Mr. Pope: Oh yes, everything is a plot.
Mr. Philip: -- is co-op certain people from condominiums and use them as fronts for what will amount to government inaction. The legislation is very clever, but I at least want to go on record as saying that this condominium owner sees through what the government is trying to do.
Mr. Breaugh: I wanted to say some words on the proposal at this stage because this is probably the focal point of the changes in the act and therefore it is essential that it be clear. The detail is important. There might be those who would accept that to do something is important and that to do anything is good enough; I frankly don’t think it is.
The proposal before the House at this moment is a supportable motion. My experience with condominiums is not as an owner, but I have to say it has been basically a negative experience. Those people in my riding who were in the economic situation where virtually the only kind of housing they could afford was a condominium are, by and large, unhappy with the situation. There is a drastic need for this revision to the Condominium Act.
I don’t propose that these revisions will solve all the problems, but the fundamental change necessary is something along these lines. There must be an agency which will act on behalf of people. A basic problem, and one of the stickiest points, whether this turns out to be in the final event the Condominium Ontario idea or a registrar idea, is that some effective body must be found to intervene. The normal channels of intervention aren’t working; I think there is a consensus on that, it doesn’t matter on what side of the House you sit. The legal profession, in advising people in the first instance on the purchase of condominium units and thereafter on maintenance and just living there and surviving through the process, is falling flat, rather sadly flat, in this regard. Normal organizations set in place, like a local condominium corporation or the associations formed either locally or province-wide, are having some difficulty as well. That is true in part because of the law that now exists, and the act before the House at this time will alter that somewhat. Some of the problems will be changed but, and it is a major but, there must be an effective mechanism in place; and the details as to how that mechanism is set up and what it’s precise powers will be are all-important.
What we are dealing with here is the practical thing that people who buy a condominium will use to solve their day-to-day problems. I am amazed and somewhat disgusted at the amount of day-to-day problems people run into in condominiums that have to do with the management of the condominium project, the construction of the condominium, or the arrangement between the seller of the condominium unit and the purchaser. The combination of problems in those three major areas is very complex.
The fact is, there is virtually no way to resolve those now and that puts the purchaser of the unit in an extremely awkward position. There is no mechanism through which they can fight for themselves. These are precisely the kind of problems that would be covered by this proposal for a registrar.
I have in my area an unfortunate number of condominiums that were not well built in the first instance, not well built to the extreme; windows can’t be replaced; floors fall out; wiring doesn’t work and it means you have to rewire the whole building; heating systems aren’t there; parking lots were supposedly paved and were not paved.
I have one which has a swimming pool which isn’t there. The swimming pool was openly advertised. They were shown a pool in the adjacent building. They thought when they were buying into that building they were buying a swimming pool with their building and the pool still isn’t there. No one quite knows whatever happened to that swimming pool.
Nonetheless, what do these people do? What redress do they have? They don’t have any now frankly. Everything that is available in terms of a complaint mechanism, which is simple enough, or more importantly, something to rectify the situation, is non-existent now. Now we have before us a proposal to move towards some kind of an agency to carry that out. In my view it is extremely important to delineate carefully how the agency is set up in the first instance, who the agency works for and does it stand a chance of being effective. And I think, Mr. Chairman, there are some parallels that can be drawn before the House in terms of comparing this bill and this agency with rent review and the agency that was set up by that.
As a proponent of rent review or rent control in Ontario, one of the awkward things, of course, is to defend the mechanism that was set up to implement it. It is my judgement -- and I think it is one that is shared by a number of members in the House -- that the agency has fallen into disrepute in that instance. I suggest to you that this bureau would fall into that same kind of disrepute; that there is this very delicate question of who sets up, who pays for, who controls and what are the terms of reference for the bureau in this instance.
The bureau, in my view, would be basically an in-house thing. I would see it as being the developers’ friend. I would see it as falling on that side of any argument that was brought before the bureau.
On the other hand, the registrar -- and I think the amendment being proposed is certainly in conformity with what the Kealey report suggested was necessary and that is government intervention.
There are those in this House who would suggest to you that the developers themselves, either individually or, as that organization would have you believe, as HUDAC, are an effective mechanism for rectifying things that are wrong in various kinds of projects. That hasn’t been my experience. It may be true in some areas of the province, but in my municipality I don’t believe that to be the case at all.
I think they take care of the most glaring examples of things that are wrong, but in addressing and handling, on a day by day basis, problems that happen to affect the lives of individual purchasers and it is a major purchase, the major purchase of someone’s lifetime, to buy a house or in this instance a condominium -- it takes on a sense of urgency. I don’t find that HUDAC has been particularly successful and I would have great difficulty believing that a bureau set up along the lines as proposed by the minister in the act would be any more successful than that.
In essence, what I am saying is that I think the minister has addressed himself to the problem, has provided the ministry’s version of what might work. My assessment is that it won’t work. And frankly I am not terribly concerned that condominium associations formally, on a province-wide scale, have looked at it and opted for that one. I would suggest to you that there are difficulties in condominiums. There are severe difficulties in putting together organizations which represent just ordinary purchases of condominiums in Ontario.
There are very few people purchasing condominiums even yet who really understand the mess they’ve got themselves into. And although that’s a little bald, I say that without much hesitation, because these are people who visit my constituency office regularly.
I see a growing and quite disturbing tendency that you really couldn’t address yourself to in this act of people quit-claiming condominiums in my riding. There is not a weekend goes by in my area that somebody doesn’t back a pickup truck up to a condominium unit, load it up and get out of there, period. Most of them are using quit-claim deeds with CMHC. Some of them are not. Some of them are just abandoning ship and getting out of there. It has reached that state.
I think we need then, we seriously need, some form of a central registrar with considerable powers and latitude, with the power to investigate, and one that not only is but has the appearance of being totally objective. I think that is what the amendment currently before the House proposes.
I point out to you a number of things that are included in here that I find -- perhaps not desirable but, I would make the argument, necessary. I think it is necessary to license people who manage condominium projects. I am not a proponent of bureaucracy or red tape. I am one who admits to being readily confused as to how all of the red tape springs up in a certain area but doesn’t in others. I’m not quite sure I understand the rationale behind making somebody get a fishing licence in Ontario when we don’t require them to be licensed if they want to manage a condominium corporation. It strikes me the reverse would be true. I’m not terribly sure why you need a licence to run a chip truck but you don’t need a licence to manage a condominium.
I don’t understand that at all, but I do understand all the problems that are there on a day-by-day basis in terms of managing condominium corporations and local development units. I know how complex they are. I know there are, frankly, very few people who have much training, expertise or experience in that field. I think that is one field where you need experience and expertise, and I think you need the regulating powers of a licensing agency.
In other words, I think people who manage condominium units should be experienced, should be qualified, should be trained, and more important there should be some recourse and they should be licensed. I find it difficult to accept much of a compromise an that entire argument. I think that desperately needs to be done and it isn’t done now.
The amendment before the House proposes to give to the registrar substantial powers, powers that under normal circumstances I, for one, might be somewhat reluctant to hand out, but I think in the field of condominiums it’s long overdue. Somebody must be prepared to take them on. Somebody must be prepared to defend those people who in good conscience, and with their hard earned cash, bought into condominium units. Somebody must have the power to rectify the day-by-day problems that are occurring there and that will occur for some time.
One of the problems of accepting the bureau notion is that it anticipates a lot of good faith all around the bargaining table. I wish I could say the good faith is there. My experience tells me it’s not there. My experience tells me in particular that though there might be good intentions on the part of the development industry to clean up the Condominium Act and to clean up the way they function in the whole field of the selling and the maintenance of condominium units, that intention may be there but it’s not being carried out. I don’t anticipate a major change of heart that would show me they’re capable of carrying that out.
I recognize that oddly enough it is often in their best interest to do that. In my own area, as an example, the whole regional municipality of Durham is flooded with condominium units. There is just a vast oversupply on the market in part because of policies of this government to subsidize developers. Nonetheless, for whatever reason there are just far too many of them out there. Almost all of them are not built on a very grand scale either, so they’re apt to have day-by-day problems about management, about construction of a unit, and all kinds of financial problems of almost every variety you could name.
I have one brand new, very good looking, and it appears to be extremely well built condominium project, which is empty and has been for over a year because of difficulties on the part of the developer and financing. Those problems are very real and they’re precisely the kind of problems the registrar could deal with under this amendment.
I put it to you that in my view at any rate these are extremely important matters to be solved. The mechanism is extremely important and it should be clear the registrar is not operating for one side or the other.
The alternative of course, is to say you allow people to trundle off to court with their lawyer. I suppose in a traditional sense that’s precisely what you would do. They would trundle off to the bureau first and then, of course, they would go off to court. I find that a terribly complicated matter. I don’t have a great deal of faith in the legal profession, unfortunately. I say that, not out of any bias on my part, but because of practical experience. I don’t see them solving people’s problems in a direct way. I wish they would. I wish I had more faith in lawyers being able to advise people, particularly in matters concerning condominiums. I find lawyers charging people for advice they frankly don’t have. I find all kinds of ridiculous incidents where people paid their money to get proper legal advice in the purchase of a condominium and didn’t get any advice at all, or worse yet got wrong advice.
In my constituency I happen to have I guess the one person in Ontario who, operating with a lawyer, managed to lose $50,000 on her lawyer’s advice. The problem was in part corrected by some changes that were presented in the House last year and after about six months of wrangling we managed to get the woman back about $20,000 of her cash, but she’s still short in the order of $25,000 to $30,000. She was acting with the advice of a lawyer. In fact, if it hadn’t been for the advice of the lawyer she wouldn’t have lost the money in the first place. So my reluctance to totally support the legal profession in these matters is not based upon an ideological difference of opinion, but it’s based upon the fact that in my practical experience they are lousing up all over the place.
Mr. Kerrio: Where are Jim Renwick and Pat Lawlor?
Mr. Breaugh: I do recognize that the legal profession itself is aware of the ignorance of its members and is aware of the bad advice that’s being given out and is attempting to rectify the situation, but I suspect that’s going to take some time. So where that leaves me is, I need a mechanism which is clearly objective; I need a mechanism that has the authority to be effective. In other words, it’s got to have considerable wallop and it must be able to act in a relatively short period of time. For example, if your floor is collapsing it does you no good if the mechanism to rectify the situation takes six months to operate because that time you’ll be sitting in the basement with cement on your head --
Mr. Makarchuk: Right, and HUDAC just doesn’t work right now.
Mr. Breaugh: -- and that’s not going to do anybody any good. So I have to come around to the point of view that I support this amendment, lengthy though it might be and detailed though it might be, and say to the members present you’re going to have to do something like this. You can, I suppose, opt for the government’s proposal here of a bureau. I think that bureau is going to encounter major problems. I think it’s far too heavily dependent upon in its theory, in the way it’s set up and the way that it’s financed on the development sector. I don’t think it stands a snowball’s chance of ever working, frankly. I think what you have to opt for is an independent agency.
There are practical problems in the clause presented by the government and there are going to be some practical problems in the amendment that’s proposed here, but we’re going to have to work our way through this. Again, the criterion should be, can you get out something that’s independent, fiercely independent I might add, because the disputes that they enter into are not going to be casual arguments.
It’s been my experience that disputes between condominium owners and management and owners of the condominium projects tend to be heartfelt, emotional and very raw. They are not academic debates. You are talking about whether the parking lot has caved in, whether there’s any heat in the building, whether the wiring works, whether they’ve been ripped off by some salesman, whether they understood what they were buying into in the first place, whether they understand the function of the condominium or the condominium corporation. These are not just genteel academic arguments that you enter into, these are ferocious arguments.
I’ve been at some rather heartwarming exercises of their democratic rights in various condominium units around my riding where 20 or 30 people ganged together to take on their own condominium corporation, the developer of the day, the city of Oshawa, the province of Ontario, the immediate world, to rectify their problem, and it was encouraging in the sense that people were finally recognizing that they do have some rights and the problem is they have to fight like hell to exercise them.
I don’t think that should be the case. I want a registrar with considerable wallop. I want a registrar that is clear and unbiased on either side. I want one with some power to do the day-by-day things that have to be done. I guess if we were to extrapolate this a bit further I might almost be asking for a kangaroo court of one, and I know here the bias would fall in that kind of kangaroo court. That’s a danger and I am aware of that, so I think the registrar would have to be, be seen to be, and in fact be, totally neutral to make some tough decisions that people aren’t going to like in some instances but the fact is the decisions must be made.
I want to urge the members of the House to read this lengthy amendment with care and to pay considerable attention to the detail. I point out once again in closing that even that friend of the government who wrote the Kealey report understands these problems in a way that he probably wishes he didn’t, but he does understand them. He understands the need for this kind of a mechanism. He was specific in the writing of that report to see that it was not an in-house operation and that it would be seen to be an intervention on the part of the government to provide an effective agency to right the things that are wrong about condominiums and to do it in a hurry. All of those things are important.
I dislike the notion that has been put forward by the government that we run around Ontario and collect little fees from condominium owners across Ontario to establish a bureau of that sort. I dislike that because I think there is a basic unfairness in that, but most important because I don’t think it stands a chance at all of ever solving the problems that are there. I support the amendment because I see is as being clear, clean, tough and with the potential at least to solve some problems. In the condominium field, that is long overdue.
Ms. Gigantes: I think most members of this assembly are aware of the fact that as a representative of Carleton East, and even as a candidate for Carleton East in elections dating back to 1974, I have had to be concerned with condominium legislation in Ontario. The riding of Carleton East has a very high proportion of condominium homes within its boundaries. The issues that have been raised by people who have lived in condominium homes in Carleton East have been among the most clear and precise enunciation of problems that have confronted condominium ownerships and condominium owners in Ontario since the Condominium Act was originally drafted and passed by this Legislature.
You will recall, Mr. Chairman, that it was a representative of the Conservative Party in Carleton East who was appointed to run a commission to investigate problems in condominium ownership in Ontario. He is a gentleman by the name of Darwin Kealey, who did his work long and hard. Whatever ideological differences I might have had with him --
Mr. Makarchuk: And they were great.
Ms. Gigantes: -- and they were great -- I have been impressed by the work he did on that commission.
In speaking to this amendment before us I want to draw to your attention that Mr. Kealey and his teammates on that commission were very pointed in their recommendations to the government and in their description of the problems facing condominium owners when it came to the suggestion of a government body to administer condominiums in Ontario.
I draw your attention to page 91 of the Kealey commission report, and I will quote from it. Chapter 12, dealing with the registrar begins: “During the course of the public hearings, one of the most repeated suggestions was for a central government office which would be acceptable to all persons involved in condominium being and development.” That is a government office, not a bureau.
The report continues: “The first question to ask when considering a recommendation for a registrar of condominiums is why is it necessary? In particular, why should the sale of a condominium unit be treated any differently from the sale of a new house? The reason that a higher degree of consumer protection is necessary when condominiums are sold is, it is alleged, that the condominium concept is more complex and less understood by the buying public.” That is undoubtedly true.
“A condominium has the unique combination of units and common elements which result in two proprietary regimes in one building, a concept foreign to most home buyers. Thus, the condominium combines independence with interdependence in a way that is not present in any other form of housing. The administrative framework for managing the affairs of the condominium, a corporation with an elected board of directors, and the necessity of a property management company to maintain the property, the costs of which are paid out of the common expenses of each owner, are both unfamiliar concepts to most purchasers. The existence of bylaws, apart from municipal bylaws, for condominiums; the problems of insurance for both the units and the common elements; and termination of the condominium will also be new to purchasers.
“Therefore, the fact that the purchaser of condominium is buying something completely different from anything he has ever lived in before and which is far more complex legally requires that the relationship between the vendor and purchaser be regulated in a way that is not present in the purchase of a new house.
“Without better regulation, the likelihood is greater that a condominium purchaser will face some of the unpleasant experiences described in many of the briefs, that he may realize one month after moving into a condominium that he is not living in what he expected but in something he doesn’t even understand. Thus, the complexity of the transaction and the nature of the risks assumed by a purchaser demand that some greater form of protection be offered the condominium purchaser.”
The next paragraph was read into the record by my colleague from Etobicoke. It underlines the necessity for a government body; it says that only a government body can provide the kind of protection that consumers in the condominium ownership field need. He goes on, in this critical central chapter to the report, to make recommendations concerning the kinds of protections that should be offered by such a government agency. For example:
“Recommendation 105: The Ontario Securities Commission treat the sale of interests in property, where the attempt is to circumvent condominium or co-operative legislation, as a security interest; and require the developer to issue a prospectus.”
He goes on to discuss the need for such an agency to enforce the concept of “full disclosure.” He also talks about the problem of “lack of standard provisions in documents,” and I’ll quote from that section:
“Much of the documentation currently governing Ontario’s projects is ambiguous and misleading. Some examples of document deficiencies are -- the provision for elevator maintenance as a common expense in a low-rise project; lack of clarity as to the responsibility for repair between the corporation and unit owners; and provisions regarding leasing, animals and use of premises which may be in violation of the Condominium Act.”
All this is related to the creation of an agency which would offer clarity, direction, information, and, where needed, a strong fist of enforcement -- a government agency.
I will continue reading these excerpts from the sections in which Mr. Kealey talks about the need for creation of the office of a registrar for condominiums. He says: “Since members of boards of directors are often inexperienced in interpreting these legal documents, it becomes a matter of trial and error for many. Most people reading the documents assume that since a provision is included and the project has been approved and registered in a land registry office, it must be valid. The truth is that, at present, no government office reviews the documentation for validity.
“Recommendation 106: The Condominium Act be amended to prescribe certain sections of declarations and bylaws.
“Recommendation 107: The Condominium Act be amended to establish a central organization called the office of the registrar of condominiums.
“Recommendation 108: The registrar of condominiums approve all condominium documents which a developer is required to provide to a purchaser under section 24(b).
“Recommendation 109: The Condominium Act be amended to provide for (a) a fine of $50,000 for misrepresentation in material provided the registrar; (b) a specific right to unit owners and the condominium corporation to sue the developer for misrepresentation.
“Recommendation 110: The Condominium Act be amended (a) to prohibit a developer from entering into a binding agreement of purchase and sale or any agreement in which he is entitled to retain a prospective purchaser’s deposit, until the registrar’s approval has been issued; (b) to require the developer to notify purchasers that they have the right to terminate their agreements with the developer if the developer’s documents do not receive approval.
“Recommendation 111: The Condominium Act be amended to provide that a developer who fails to comply with the act be subject to a fine.” He then goes on to discuss the information role of the registrar.
We arrive at recommendation 112: “The Condominium Act be amended to provide that a condominium corporation’s failure to file information with the registrar will make it subject to a penalty up to a maximum of $2,000.
“Recommendation 113: The Condominium Act be amended to provide that for the purpose of changing the provisions of an existing declaration to the standard provisions in the act, a special vote of 70 per cent of the owners be allowed, and for the bylaws 50 per cent of the owners be allowed.” This would be enforced by the registrar.
“Recommendation 114: The Condominium Act be amended to provide that the registrar must approve these amendments to declarations and bylaws.”
Mr. Chairman, in recommendation 115 he goes on to talk about the system of dispute resolution which would be followed under the office of the registrar of condominiums. In recommendation 115 he suggested to the government months ago that before we even got to consideration of this bill before us now there should be a temporary office set up within government to carry out those functions he talked about.
I will read to you recommendation 116: “Before the legislation creating the office of the registrar comes into effect an administrative office be established that will eventually become the registrar’s office.” Well, that recommendation went down the drain, Mr. Chairman, and apparently, so did the recommendation --
Mr. Makarchuk: You don’t even listen to your own people.
Ms. Gigantes: -- by Mr. Kealey for the establishment of such a government office. Because, when we move back to June 1978, to a statement by the member for St. Andrew -- St. Patrick (Mr. Grossman), then Minister of Consumer and Commercial Relations and responsible for changes to the Condominium Act, we have these kinds of statements. Compare the toughness of tone of the Darwin Kealey document with these kinds of expressions from the minister.
“That brings us to the second part of my proposal, the administrative concept. While the resolution of the front end and private sector practices will clear up many of the problems, it is clear that an ongoing organization” -- an ongoing organization, Mr. Chairman -- “is required to inform and educate the public about condominium matters.”
Another point: “Assist in the resolution of disputes between condominium corporations and unit owners and among unit owners” -- assist.
“Ensure that condominium corporations are fully cognizant of financial, operating management practices, and assist in the formulation and conduct of courses for property management.”
My goodness. That’s tough talk.
Mr. Hennessy: Awful, awful. Geez.
Ms. Gigantes: That’s tough talk, Mr. Hennessy.
“To meet these needs, Mr. Speaker,” the then minister continued, “the ministry has considered the recommendation in the study group’s report to establish an organization within the ministry under the stewardship of a registrar of condominiums. However, we have opted for an alternative: establishing an organization external to the ministry, comprising the various participants in condominium development” -- various participants.
“We did so, Mr. Speaker,” he said, “for the following reasons: this government is committed to less rather than more intervention and regulation of the market place.”
Let me remind you what Mr. Keal3y said about that, quite directly. “It could be argued that interference in the condominium market by a government body should not be permitted; that if a developer is willing to sell a condominium unit and a buyer is willing to buy, then the transaction should not be interfered with. Rather than the government having to regulate the market, some may contend” -- the former minister and the current minister among them, obviously -- “some may contend that the forces present in an open market will ensure that fair prices and services are provided. This philosophy clearly has not worked in the condominium market, as evidenced by the briefs presented at the public hearings and by the growing media coverage of the problems in the condominium field.”
He said it before.
Mr. Hennessy: Say it again.
Ms. Gigantes: I guess he probably suspected what might be coming. He presented an argument in favour of a government agency, as opposed to precisely this loose kind of formulation that we have in front of us called the bureau.
The former minister went on. Among the goals of this -- what does he call it? -- “alternative,” the organization external to the ministry, he wants it to have “the powers of persuasion of those directly involved in condominiums ... ” He said “The powers of persuasion of those directly involved in condominiums will be more effective in dealing with the every day difficulties faced by condominium owners than the direct intervention of a remote government organization.” I mean why do we have policemen under that theory of government?
“Many owners have already organized local groups.” he said, “and regional associations. These organizations have proved efficient in dealing with the difficulties.”
Baloney. Baloney. There are 100,000 condominium owners across this province who would tell you quite cheerfully that that simply is not adequate protection, nor is this proposal that we now have before us.
He goes on: “To this end we propose to establish Condominium Ontario as a nonprofit, provincially chartered corporation without share capital. To accomplish this the ministry will provide an interest-free startup loan, assist in the incorporation of Condominium Ontario, appoint a chairman and executive director and establish a group within the ministry to provide assistance during the startup period.”
Listen to this: “Ultimately the corporation will operate on the user-pay principle” -- that doesn’t fly with me -- “with every condominium owner paying a small annual assessment to finance the operation.” You’re stuck, you’ve been stuck, you’re sitting in a house that has been built under bad legislation, a condominium unit where you need help and then you’ve got to go and pay for it on top of that.
“The chairman will initially be appointed by the government. In addition, the composition of the board will be 50 per cent condominium owners chosen regionally and 50 per cent representation drawn from the private sector, such as builders, developers, property managers, lenders, insurers, the legal and accounting professions and government.”
Boy, oh boy, as if condominium owners in this province haven’t already paid too much to each and every one of that 50 per cent group; as if they hadn’t been given bad advice; as if they hadn’t bought buildings which in some cases are so inadequately constructed that they’ve got enormous fees where the corporation itself is in total financial disarray because of the lack of good corporate behaviour on the part of developers; as if that weren’t enough, now they get told by Mr. Grossman in June that this external agency, this non-government agency, is going to be made up 50 per cent of those very professions who have seen to it that individuals and families in this province have been ripped off under the Condominium Act.
Mr. Makarchuk: Right on.
Ms. Gigantes: This is utterly intolerable, and for the minister to stand today and say to us that we are not going to ask condominium owners to actually pay, its going to be developers who are going to be paying -- wasn’t that what you said?
Hon. Mr. Drea: No ma’am. No ma’am.
Ms. Gigantes: Then I would like to hear it again because I didn’t understand that.
Mr. Hennessy: Say it again.
Ms. Gigantes: They were going to pay something. The developers are going to kick in so it will cost less for the individual owners. Is that it? The fee goes down. Is that it? It’s right here in the legislation proposed to us, under this famous bureau: “Each corporation shall pay to the bureau an annual fee in the amount prescribed by regulation for each unit comprising the property and shall file such information and material as is prescribed by the regulations.” It sounds to me like the legislation says the condominium owners pay.
If you are going to tell me too, Mr. Minister, that the developers are going to kick in, I’m not impressed, because they will just put that on the price of the unit and you know it. This should be paid for out of general tax revenues in the province of Ontario. Condominium owners have been the victims too long. There is total frustration and rage.
Mr. Hennessy: Down with the capitalists.
Mr. Makarchuk: Does the Securities Exchange Commission pay for its operation?
Mr. Warner: You are going to see the light, Mickey. Would you like to sit over here?
Ms. Gigantes: There are areas of this province, the fast growth areas of this province over the last few years, where the need for good condominium legislation and good protection for condominium consumers is a felt need in the community, where a huge portion of the community is caught in the traps created by our inadequate legislation in the past.
If this new bill is going to mean anything, if it is going to mean any real change, if it is going to mean an acceptance by the government of Ontario of its responsibility to those citizens of Ontario who have purchased condominium units, we must have a governmental agency with the authority and with the power to be able to create a climate that is fair and livable for condominium owners.
I’ll tell you, Mr. Chairman, that Mr. Kealey wouldn’t dare go back to the riding of Carleton East and run as a Conservative with this kind of bureau idea. He wouldn’t dare and he knows it.
Mr. Chairman: It is now one o’clock. I wonder if the honourable member could find a suitable place to complete her remarks or just adjourn them.
Ms. Gigantes: I will complete my remarks. I know that some of my other colleagues wish to speak on this item and I guess we’ll have to continue later. I recommend to you the motion that has been put forward by my colleague as an amendment to this very weak section in the proposed bill.
Mr. Chairman: It is one o’clock.
Ms. Gigantes: Thank you, Mr. Chairman.
Mr. Warner: Mr. Chairman, I wish to adjourn the debate.
Mr. Chairman: It is not necessary.
On motion by Mr. Pope the committee rose and reported progress on the bill.
The House recessed at 1:01 p.m.