Can Your Condo Opt-Out of the Act?

I have heard of situations where a condominium wants to avoid a requirement of the Act for one reason or another. Often the desire is to avoid the costs associated with the requirement. Other times the desire appears to be to reduce the number of administrative tasks. Whatever the reason, Section 176 of the Condominium Act, 1998, clearly states that the Act "applies despite any agreement to the contrary". This means you cannot contract out of the Act. Notwithstanding Section 176 of the Act, there are parts of the Act that a condominium can override by making changes to its declaration, by-laws or rules. There are also parts of the Act that a condominium can opt-out of if certain requirements are met.  Changes to the Declaration, By-laws and Rules There are several requirements in the Act that can be altered by creating or amending the declaration, by-laws or rules. In most cases, the governing documents add requirements above the requirements in the Act. In some rare cases, the governing documents will replace the requirements in the Act. For example, the declaration often changes the maintenance and repair obligations described in Sections 89 and 90. Section 91 states that a declaration can alter the obligations described in the Act in the following ways:

•  owners may be responsible for repairing their units after damage;
• owners may be responsible for maintaining a part of the common elements;
• owners may be responsible for maintaining and repairing after damage the exclusive use common elements; and
• condominium may be responsible for maintaining the units or any part of them.

Amendments to the Act (that are not yet in force) will expand the list above. Audit The Act requires all condominiums to appoint an auditor and have an audit performed every fiscal year, unless:

• a turn-over meeting has been held under Section 43 of the Act,
• the condominium has fewer than 25 units, and
• as of the date of the meeting, all of the owners consent in writing to dispense with the audit requirement until the next annual general meeting.

Notwithstanding that some condominiums may be able to dispense with the audit requirement each year if owners agree, it is rarely recommended because the audit serves an important function: the audit provides an independent review of the finances of the condominium. Information Certificates The Act and regulations require condominiums to distribute information certificates (Periodic Information Certificate, Information Certificate Update, and New Owner Information Certificate) to the owners to provide them with certain information about the condominium.  The regulations permit condominiums to opt-out of the information certificate requirements if:

• a turn-over meeting has been held under Section 43 of the Act,
• for phased condominiums only: a new board has been elected under Subsection 152(6) of the Act and a turn-over meeting has been held, and
• the owners of at least 80% of the units consent in writing to dispense with the requirement until the next fiscal year.

For many condominiums it will be more onerous to collect the consent of owners than send the information certificates, but it may be a good option for smaller condominiums where regular communications are already sent to the owners. Record Requests The 2017 amendments to the Act created a new mandatory process for record requests by owners. Some condominiums believe the process is cumbersome and would like to use their previous methods (i.e. receive an email request, reply by email, and attach the records requested). The Act requires the process to be used, unless the condominium and owner agree to change some of the process. In this case, the condominium and owner must sign a "Waiver by Requester of Records" form to alter the process. The form is available on the CAO's website under "Resources". In some cases, it may be easier to use the process in the Act than fill out the form. The above list is not exhaustive. For more information, feel free to reach out to one of our lawyers.