Ontario Condo Laws: The Condominium Act Explained Simply

Living in a condo means living under several layers of rules. New owners are often unsure whether a problem is covered by the law, the declaration, the by-laws or the rules.

This article gives a plain overview of how those layers fit together in Ontario, how each is changed, and a few examples of what the Condominium Act, 1998 covers.

The four layers

Ontario condos are governed in this order: the Condo Act, then the declaration, then the by-laws, then the rules. If they conflict, the Act takes priority.

• The Condominium Act, 1998 sets the rules for condo corporations, including how a reserve fund may be used.
• The declaration is the corporation's foundational document, and your percentage share of common expenses is set there.
• By-laws are passed by the board and then voted on at an owners' meeting, and approved by-laws are registered in the Land Registry Office.
• Rules deal with day-to-day use and may promote safety, security and welfare, or prevent unreasonable interference with the use and enjoyment of units and common areas.

How each one is changed

What the Act covers in practice

The Act sets many rules that apply no matter what your declaration says. Some examples:

• Reserve funds may be used only for major repair and replacement of the common elements and assets, with regular studies.
• A corporation automatically has a lien against a unit when an owner defaults on common expenses.
• A corporation must carry insurance and never let it lapse.
• Buyers of new condos from a builder have a 10-day cooling-off period.

Reserve funds are a good example. Owners pay into the fund through their monthly common expense fees, and the board decides how much goes to it. A new corporation must complete a Class 1 reserve fund study within the first year after the declaration and description are registered. After that, updated studies are required at least every three years, alternating between Class 2 and Class 3. The board must review each study within 120 days of receiving it and propose a plan for future funding.

Special assessments also come from the Act. A condo board can levy a special assessment through common expense fees without owner approval, for reasons such as unforeseen expenses, a major repair that exceeds its budget or litigation costs. Your share uses the same percentage as your common expense share, and owners must pay it. An unpaid special assessment gives the corporation a lien against the unit, covering the unpaid amount, interest and reasonable legal costs and expenses. There is an exception: in a court decision the Condominium Authority of Ontario describes, a buyer was exempt from their share because the status certificate had not clearly disclosed that assessments might be levied.

Liens have their own steps. A lien for unpaid fees expires three months after the default unless the corporation registers a Certificate of Lien in the Land Registry Office, and if it expires the corporation loses its priority over other parties with an interest in the unit. Before registering, the corporation gives the owner a Notice of Lien, and if the arrears are not paid within 10 days it can register the certificate. An owner can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge it.

For new condos, a purchase agreement with a builder is not binding until the buyer has received both the disclosure statement and Ontario's Residential Condominium Buyers' Guide. A buyer may also rescind after a material change in the information in the disclosure statement, which is a separate right from the initial cooling-off period.

Other matters, such as the definition of a standard unit, deductible by-laws and owner insurance requirements, differ from one corporation to the next depending on its declaration and by-laws.

Which one governs your problem

Start with the Act, since if the documents conflict, the Act takes priority. Then check the declaration, by-laws and rules in that order. Some examples:

• Insurance: the Act requires the corporation to carry coverage, while the declaration, by-laws or rules may require owners to carry insurance, which then becomes mandatory for that building.
• Repairs after damage: the corporation repairs the standard unit as defined in its governing documents, and owners repair everything outside that definition. If an owner, tenant or resident caused the damage, the corporation can charge the owner the lesser of the repair cost or its insurance deductible, and some by-laws make owners pay the deductible in more situations.
• Disputes over liens: those tied to issues within the Condominium Authority Tribunal's jurisdiction, such as nuisance, parking, storage or pets, can be disputed there, while others, such as repairs, go to the Superior Court of Justice.

Some changes to condo law have been announced but are not yet in force, so check what applies today before relying on a summary.

What to do next

• Get a full copy of the declaration, by-laws and rules.
• Identify which document deals with your issue, then check the Act if they seem to conflict.
• Note how any change you want would have to be made and who must approve it.
• Keep written records of requests and replies from the board or manager.
• Speak with a lawyer if the documents are unclear or in conflict.

Frequently asked questions