Upcoming Legislative Changes Mean New Obligations for Condominium Developers

Written By Leonard Gangbar and Meg Williams

Beginning January 1, 2021, changes to the Condominium Act, 1998 will introduce new obligations for condominium developers. Following these changes, declarants must provide Ontario's Residential Condominium Buyers' Guide (the Condo Guide) to purchasers of pre-construction and newly built residential condominium units or proposed condominium purchases. The Condo Guide was developed by the Condominium Authority of Ontario in collaboration with the Ministry of Government and Consumer Services and was approved by the Minister. 

At this point, the Condo Guide states that it is only required to be provided to buyers of residential pre-construction and newly built condominium units or proposed condominium purchases. However, the Act, which requires this delivery, currently obliges the declarant to deliver the Condo Guide to every person who purchases a unit from the declarant, with no differentiation between residential, commercial, or retail units. Because of this inconsistency, to be safe, all declarants should deliver the Condo Guide to every purchaser of a unit or proposed unit to whom they also deliver a disclosure statement. Additionally, the Condo Guide does contain general information that may be of interest to purchasers or owners of non-residential condominiums. 

Notably, this requirement will apply to all unit sales occurring on or after January 1, 2021, regardless of whether the unit is part of an existing project that began prior to this date. This means that there will be no grandfathering of existing projects. In other words, the Condo Guide will be required to be delivered to purchasers for every agreement signed on or after January 1, 2021, on every condominium project, whether or not sales commenced before January 1, 2021. 

Another important point is that under the Act, purchasers have a 10-day cooling-off period in which they may rescind their agreement of purchase and sale. This 10-day cooling-off period begins on the later of the date on which the purchaser receives the agreement of purchase sale, disclosure documents, and the Condo Guide. 

Finally, there have been no regulations developed that specify the manner of delivering or receiving the Condo Guide. As such, developers may wish to use the same processes and manner in which they currently provide the disclosure statement to provide the Condo Guide, including electronically or in paper format. 

If you have any questions about these upcoming changes, contact a member of the Bennett Jones Commercial Real Estate group. 

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