Legislative and Regulatory Update
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1 NEW CONDOMINIUM LEGISLATION Protecting Condominium Owners Act (Bill 106) Legislative and Regulatory Update 1
2 Agenda Licencing of Managers Information Certificates Preliminary Notice of Meeting Director and Officer Disclosure 2
3 LICENSING OF MANAGERS 3
4 Licensing Bill 106 makes changes to the Condominium Act, 1998 but it also introduces a brand new piece of legislation. The Condominium Management Services Act (CMSA) 4
5 Licensing The Condominium Management Regulatory Authority of Ontario (CMRAO) was formed last year to accomplish the goals of the CMSA. 5
6 Who Needs a License Any one providing condominium management services will require a license under the CMSA What are condominium management services? 6
7 Who Needs a License You provide condominium management services if you do any of the following: Collect or hold contributions to the common expenses; Collect or hold other amounts levied by, or payable to, the corporation; Exercise delegated powers and duties of the corporation or its board of directors. Examples: make payments to third parties on behalf of the corporation, negotiate or enter into contracts on behalf of the corporation, or supervise employees or contractors hired or engaged by the corporation. 7
8 Who Needs a License You are exempted from the licensing requirement if you are: lawyer, architect, accountant, engineer, security guard, 8
9 Who Needs a License You are exempted from the licensing requirement if you are (continued): director or officer of a condo (unless they receive compensation), Administrator, or employee of a condominium management company who receives and passes funds to a licensed condo manager 9
10 Types of Licenses Limited License General License Transitional General License (90 days unless an extension is requested) Condominium Management Providers 10
11 General License Apply for a General License if you have: 2+ years experience as a condominium manager (2,920 hours) within the past 5 years; provided condominium management services within the previous 90 days of November 1, 2017; and competed one of the following: ACMO s RCM exam; ACMO s 4 courses; or ACMO s challenge exams. 11
12 Transitional General License Requirements to apply for a Transitional General License: Last day to apply for this license is January 29, 2018; You have satisfied the requirements of the General License except the educational requirement. 12
13 Transitional General License To thereafter earn a General License, you must successfully complete one of the following within 3 years: ACMO s 4 courses; or ACMO s 4 challenge exams. You can renew a Transitional Licence on an annual basis if: no more than 3 years have passed since the licence was issued. 13
14 Limited License Apply for a Limited License if you have: less than 2 years experience as a condominium manager. 14
15 Limited License To thereafter earn a General License, you must complete all of the following within 5 years: 2 years of work experience (2,920 hours) supervised by the holder of a General License or Transitional License. During that period, there must be participation in key activities including: plan and participate in a client s Board meetings; plan and participate in owners meetings including at least one AGM; prepare a budget and present it to a client s Board; interpret financial statements and present them to a client s Board; prepare and present reports to a client s Board; oversee the maintenance and repair of units, common elements, or client assets. 15
16 Limited License To thereafter earn a General License, you must complete all of the following within 5 years (continued): successfully complete one of the following: ACMO s 4 courses; or ACMO s challenge exams. 16
17 Condominium Management Such firms must: Providers apply within 90 days of the CMSA coming into force; apply in writing and pay the prescribed fee; and appoint a principal condominium manager from one of its condominium managers holding a General License or a Transitional License. 17
18 Proxies The revisions to the Condominium Act restrict a CM from soliciting proxies. In the regulations the definition is clarified and does not include: Holding proxies or collecting them, Reminding owners to submit proxies, Informing owners how to submit proxies, Providing a proxy for completion, A licensed CM shall not modify a proxy. Can solicit a proxy that is for quorum purposes only. 18
19 Transfer of Records All records shall be transferred within 15 days after the termination of the contract. If the record does not yet exist (i.e. financial statements) it shall be created and turned over within 30 days of the termination of the contract. Copies must be kept secure if they are maintained by the Management provider. 19
20 Regulation of Licensees Certificate of license issued Licensee must carry and produce it upon request of any person Multiple Employers Cannot be employed by more than one CMP unless all consent and approved by Registrar Employed by Condo Corporation General licencee an be employed directly by no more than 3 condo corporations 20
21 Miscellaneous Code of Ethics and Discipline process Insurance Disclosure of Interest 21
22 INFORMATION CERTIFICATES 22
23 New requirement to provide information certificates to owners and mortgagees 3 types Information Certificates Periodic Information Certificate Information Certificate Update New Owner Information Certificate 23
24 Periodic Information Certificates ( PIC ) Must be in prescribed form To be sent to owners twice per fiscal year, within: 60 days of the end of the first fiscal quarter, and 60 days of the end of the third fiscal quarter. 24
25 Periodic Information Certificates ( PIC ) Must contain information which includes: Address for service of corporation and manager Names of directors and service address Judgments and status of legal actions Insurance information Means to electronically communicate with corporation 25
26 Periodic Information Certificates ( PIC ) continued... Directors involved in legal action, that have a judgment against the corporation, or are in arrears 60 days or more Number of leased units Judgments and their financial implications Insurance deductible and owner s exposure Statement indicating any failure to obtain insurance Standard Unit By-law Number, if applicable 26
27 Periodic Information Certificates ( PIC ) continued... Copy of any directors disclosure statement (re: litigation, offence conviction, conflict of interest) Budget and any amendments, state whether Surplus or Deficit Reserve fund balance, remaining contributions, anticipated expenditures, and any projected increase in fund contribution If Corporation failed to pay annual fee to CAO Any compliance order by Registrar against corporation 27
28 Information Certificate Update ( ICU ) Sent in prescribed form within 30 days of: Changes to the address for service of the Corporation or manager Changes of manager and directors Changes to insurance coverage or deductible Insurance policy termination Sent within 5 days of: Loss of board quorum state number of vacancies, request to owners for those intending to be candidates to notify corporation in writing 28
29 Information Certificate Update ( ICU ) Corporations can pass by-law to require that a PIC or ICU be sent on a more frequent basis. One or more copies of the most recent PIC and any ICU to be made available for inspection at the AGM 29
30 New Owner Information Certificate ( NOIC ) Must be in the prescribed form Sent to new owners that notify corporation of their ownership within 30 days Must contain the most recent PIC and ICU 30
31 Exceptions to Information Certificates Corporations are not obligated to send out these three information certificates for any fiscal year if: A turnover meeting has already been held; and Each year the owners of at least 80 per cent of the units (includes parking units) consent in writing not to receive information certificates 31
32 Service of Information Certificates Two service options: Serve by the usual means available under Section 47 of the Act ie. personal delivery, mailing, fax or (if owner consents), delivery at unit or mail box (unless owner specifies otherwise); or Post the Certificate on corporation s website and send a notice of posting (in prescribed form) to each owner by the usual means but the owner must be advised that he can request a paper copy and the posting must be available for 30 days 32
33 PRELIMINARY NOTICE OF MEETING 33
34 Preliminary Notice Send out a preliminary notice to owners in advance of a notice of owners meeting, in prescribed form, at least 20 days before sending the meeting notice Not required if the owners meeting is called only to fill in vacancy on the board Contains information about upcoming meeting, such as the purpose and projected date of the meeting, the deadline for submitting candidacy and disclosure information, description of information or material to be included in the notice of meeting, advice that owners may submit material to be included in the notice of owners meeting (but corporation is not obligated to include such material unless the owners of at least 15% of units request its inclusion) 34
35 DIRECTOR AND OFFICER DISCLOSURE 35
36 What does the Act say? The Act provides that no individual can be a condominium director if he or she has not complied with the prescribed disclosure obligations The Act also provides that a director is subject to ongoing disclosure requirements and the failure to meet the prescribed disclosure requirements (or any additional disclosure requirements established by bylaw) would immediately disqualify the person from being a director 36
37 What do the regulations say? Candidates must provide disclosure: (1) when they submit their candidacy (in the Notice of Meeting package or at a meeting) or (2) before appointment, if appointed by the directors Disclosure must be submitted in writing (with signature), or orally at the meeting for those candidates nominated at the owners meeting Disclosure must include: whether they are 60 days or more in arrears of their common expenses contributions Whether they are an owner or occupier of a unit in the corporation whether they have been convicted of an offence under the Act or Regulations in the past 10 years (Note: does not apply to all offences) whether they (or their immediate family or any tenant) is involved in legal proceedings with the corporation whether they are a party to or have a material interest in a contract or transaction with the corporation or the developer 37
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