Condo Act Reform - #1 Consumer Protection: Dealing with the Developer
This is the second of three parts describing the suggestions for reform in the Condominium Act, 1998, related to greater consumer protection. The first dealt with greater disclosure obligations and status certificates. This post will address the suggestions related to the condominium's dealings with the developer, which include:
- A prohibition on a provision in the condominium's documents requiring the condominium to purchase or lease assets from the developer that would normally form part of the common elements (i.e. hallways, stairwells, guest suites, recreation areas, or mechanical rooms).
- An exception to item 1 above should be made for energy-efficient "green energy" equipment as long as it meets certain conditions and is properly disclosed to purchasers.
- A prohibition on developers deferring costs (to avoid a first-year budget deficit) for any "reasonably foreseeable operating cost or expense that would ordinarily arise in the first year of operation".
- A requirement that certain units (i.e. live-work or commercial/retail) have utility meters so that the other units are not forced to subsidize these units.
- If there are shared facilities with another condominium or entity, an agreement must exist that defines the distribution of costs between the parties
- The contribution toward the reserve fund should be the greater of the amount set out in the reserve fund study or an amount based on a formula to be determined.