On December 7, 2020, the Auditor General of Ontario (the “AUDG”) released her 2020 Annual Report comprised of value-for-money audits of the provinces programs and services, one of which focused on “Condominium Oversight in Ontario.” Although the audit report included some accurate observations about the condominium industry, there were some criticisms and recommendations that may be misguided due to feedback received from a small vocal minority of dissatisfied unit owners.

More Managers are Needed, and Management Fees Must be Increased

One of the criticisms levelled in the report is that unit owners should be entitled to information about their condo, not just the records of their condo under Section 55 of the Condominium Act (the “Act”). The AUDG appears to have arrived at this conclusion based on an anecdotal unit owner who wanted to see “lists of permanent, temporary and contract employees employed by the condo corporation” and another who wanted to see the “support for the condo board’s approval of a contract renewal.” Both of these unit owners were denied their requests by the Condominium Authority Tribunal (the “CAT”).

In the 1st case, the CAT ruled that the list of employees did not exist. The owner was seeking a list of all employees working on the premises, but it is rare for a condo to have a list of every single service provider’s potential personnel that would be sent on-site.

In the 2nd case, the CAT ruled that the discussion emails between board members regarding a gas contract were not part of the condominium’s formal records. Indeed, board members must be free to have frank discussions amongst themselves about the condo’s governance. The Supreme Court of Canada has explicitly affirmed that democratic governance works best when the elected officials responsible for decision-making are free to express themselves around the table unreservedly.

Practically speaking, if the AUDG wants owners to be entitled to non-record information, in addition to the PICs and ICUs already circulated by the condo, then many condos will likely need to hire a full-time assistant manager or site administrator to answer all of the information queries that owners will be making. If this happens, the fees paid by the condo to the property management firm must be split between the condominium manager and the extra assistant manager or a site administrator hired to handle all of the information requests by owners.

If the provincial government insists on making records and non-records information available to owners, then the ‘race-to-the-bottom’ in management fees must stop. Condos need to pay higher management fees. Furthermore, downloading more work to managers won’t help attract managers to a field already experiencing acute shortages.

Managers Fall on the Sword of Their Board’s Decisions

The AUDG 2020 Annual Report was critical of the Condominium Management Regulatory Authority of Ontario (the “CMRAO”) for closing owner complaints about managers too early without addressing the underlying grievance that the owner had. However, the reason why so many CMRAO complaints about managers are closed “without the underlying issues related to, for example, leaks, floods and other significant repair issues being resolved in a timely manner” is likely because the manager acts under the authority of the condo board and is constrained by whatever the board decides to do, or not do.

Unfortunately, managers are often blamed for board decisions. Not only is the manager tasked with receiving the unit owner’s complaint in the first place, but the manager is also the messenger who must bear the bad news of the board’s decision to the complainant. Since unit owners are unable to take their board members to the CAT or to some sort of “condo police,” the unit owner resorts to filing a complaint about the manager with the CMRAO.

Going Forward Into 2021

While the report does highlight some interesting aspects of the evergrowing condominium industry in Ontario, it appears to miss the fact that the pool of condominium managers is shrinking and significantly outpaced by the rapid growth of new condominiums. As of July 31, 2020, there were 11,354 registered condominiums in Ontario but only 3,369 licensed condo managers, which equates to 3.4 condos for every manager. Many condominium managers are responsible for more than four condominiums at a time, and they are not regional or district managers.

Increasing workloads of managers due to legislative changes (both implemented and yet-to-come), depressed manager salaries, increasing owner complaints filed with the CMRAO, and the demographic “greying-out” of managers, is not conducive to bringing managers into the field. As a result, there is an acute shortage of qualified managers in Ontario that needs to be addressed.

If the Ontario government wishes to implement some of the AUDG’s 2020 recommendations impacting managers, then it must also step up efforts to make condominium management more attractive to job seekers and recent graduates. Simultaneously, condominium corporations must recognize that in this “sellers’ market,” and they will have to pay higher management fees to keep and retain a good manager. Condos must also be more proactive in helping protect their management personnel from harassment by owners and residents by implementing and enforcing workplace harassment policies.

While criticism is necessary to drive positive change, castigating managers based on the self-selected responses received by the AUDG must be balanced against the very real-world effects that such “official” criticism has.

A person who is thinking about becoming a condominium manager might read the AUDG report and, considering the dismal average salary of managers, reasonably decide not to enter the job market at all. Developers will keep building condominiums, but there will not be enough management personnel to staff them. Wealthy condominiums will be able to pay higher management fees to keep the good managers, and poorer condominiums will be left in the dust.

Unfortunately, a disgruntled unit owner may read the AUDG report and shove it in the face of their on-site manager as proof that everything must be the manager’s fault or may cite the 2020 report to other dissatisfied owners to rile up the group’s collective anger against management.

Ultimately, condominium managers and the industry may soon reach a breaking point. Managers are already exposed to the many perils of being the frontline “face” of communication between dissatisfied owners and volunteer board members. These perils have only been exacerbated by the COVID-19 pandemic still ravaging throughout the province, which has infected condominium residents and management personnel alike.

Hopefully, in 2021, both the Ontario government and the condominium client base will recognize that more must be done to support this service industry. 

Victor Yee is a condominium lawyer and litigator at Elia Associates. Victor has successfully represented clients at all levels of court in Ontario, in various tribunals throughout the province (including the CAT), and in private mediations and arbitrations. He can be reached at vyee@elia.org.
elia.org
 

Back to Latest Issue