Dictionary

Have you ever wondered what do the technical terms, you see in notices or forums online when talking about Condominium Industry, mean? 

Here is a summary of some of the common terms used in a Condo environment.

• Information Certificates – There are three types of information certificates mandated by Section 26.3 of the Condominium the Act.
• Periodic information certificate (PIC) – Sent out twice per fiscal year to all owners (within 60 days of the end of the first quarter and 60 days of the end of the third quarter). Includes key information about the corporation’s board, finances, insurance, reserve fund, legal proceedings, and other matters.
• Information certificate update (ICU) – Sent to owners if there are certain key changes before the next scheduled PIC (like changes in the directors or officers of the condo corporation). To be distributed within 30 days of the change.
• New owner information certificate (NOIC) – Sent to new owners within 30 days after the new owner provides written notice stating their name and the unit that they own in the corporation. A NOIC covers the most recent PIC and any subsequent ICUs.
• Condominium Act – The Condominium Act regulates the creation, purchasing, living in, and governing of condominiums in Ontario. Recent changes to the Condominium Act increase protection for condo owners and residents.
• Condominium Authority of Ontario (CAO) – The CAOwas established to provide services and resources for condo owners, including:

• online information about condominium living to help owners and residents understand their rights and responsibilities
• mandatory education and training and certificate for condo directors
• an online database of information about condo corporations that can be accessed by the public, including information about condo boards of directors and contact information
• an condo guide containing the essential information about the roles and responsibilities of living in a condo. Developers are required to give a copy of the guide to all buyers at the time of sale
• creation of the Condominium Authority Tribunal (CAT)
• Declaration, bylaws and rules – In addition to the Condominium Act, 1998(the “Condo Act”), condominium corporations are governed by the declaration, by-laws, and rules.
• The Declaration is one of the two legal documents that create a condo corporation when registered with the Land Registry Office. The declaration is often considered the constitution of the condo corporation and contains many important provisions.
• The By-laws set out various key aspects of how the condo corporation will govern itself such as the number of directors on the board, board meeting procedures, and how the affairs of the condo corporation are generally conducted. The by-laws can be considered the administrative guide for the condo corporation.
• The Rules are designed to promote the safety of owners and prevent unreasonable interference to the use and enjoyment of the units as well as common elements. The condo rules will dictate what individuals on the condo corporation property can and cannot do.
• AGM (Annual General Meeting) – At the AGM, the board reports to owners on matters such as the financial health of the corporation. Attendees discuss other important aspects of condominium corporation management, any upcoming major repairs or renovations, as well as litigation involving the corporation. The AGM also gives owners the opportunity to discuss matters that are relevant to the business of the condominium corporation.
• Responsibility for Maintenance and Repairs – TheCondominium Act, sets out basic guidelines on maintenance and repair obligations:
• Under section 89 of the Condo Act, condo corporations are responsible for repairing damage to both the common elements and units.
• Under section 90 of the Condo Act, unit owners are responsible for maintaining their units (i.e. upkeep and repair after normal wear and tear) and condo corporations are responsible for maintaining the common elements (e.g. parking, gardens, hallways, elevators, amenities, etc.).
• Importantly, section 91 of the Condo Actallows the condo corporation’s declaration to alter the obligation to repair after damage and/or to maintain. This means that when determining who is responsible for maintenance or a repair, it is necessary to start by reviewing the condo corporation’s relevant documents, such as the declaration.
• The condo corporation’s declaration will contain key information, such as the proportion each unit contributes to the common expenses, the boundaries of the units and common elements, and an indication of the number and type of units. A declaration’s Schedule C will outline unit boundaries and can clarify what is considered part of the unit and what is part of the common elements. This distinction is crucial in establishing maintenance and repair responsibilities, especially in areas that are not so clear, such as damage behind walls (e.g. plumbing, electrical, etc.).
• Reserve Fund Study – The Condominium Act requires that all condominiums have a reserve fund.  A reserve fund is a special account with a financial institution such as a bank, loan and trust corporation or credit union. This account is separate from the condominium’s operating fund, and it is used to pay for major repairs and replacements to the condominium’s common elements.  A portion of the owner’s monthly common expenses fee is deposited into the reserve fund every month. The reserve fund is intended to ensure that the corporation has enough money to pay for future repairs.
• Notice of Future Funding (former Form 15) – This form is be used when the board of directors notifies owners that that a plan for future funding of the reserve fund has been proposed. The notice must be sent to the owners and the auditor within 15 days of the board proposing a plan for future funding.
• Status Certificate – The status certificate is a document, as per Section 76 of the Ontario Condo Act, that provides basic and essential information concerning the financial status of a unit and of the condo corporation. Its main focus is to inform a prospective owner of the fees, of any large increase that is going to come into effect, of any special assessment that is being contemplated by the board, and any arrears or lien that a particular suite might have.
• Board of Directors – Owners elect a board of directors to oversee the business affairs of the condominium corporation. As an owner, you are a member of the condominium corporation, so board activities affect your condominium experience every day. This is why it’s important that you vote for the directors or become a director yourself. Elections occur during the annual general meeting (AGM).
• Standard Unit Definition – Another consideration when determining responsibility for repairs after damage has occurred is what the Condo Act details about standard units and improvements. Section 89 of the Condo Act, states that the obligation to repair after damage does not include improvements made to units. Therefore, condo corporations are only responsible for repairing up to what is defined as the standard unit, and improvements made to a unit are each owners’ responsibility.