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Ontario New Home Warranties Plan Act

ONTARIO REGULATION 522/17

RESIDENTIAL CONDOMINIUM CONVERSION PROJECTS — GENERAL

Consolidation Period: From January 1, 2018 to the e-Laws currency date.

No amendments.

This is the English version of a bilingual regulation.

CONTENTS

1.

Definitions and interpretation

2.

Property assessment report

3.

Capital replacement plan

4.

Pre-existing elements fund study

5.

Confirmation of registration and enrolment

6.

Standard form trust agreement

7.

Pre-existing elements fund

8.

Certificates for release of money from pre-existing elements fund

9.

Use of money received from pre-existing elements fund

10.

Transition

 

Definitions and interpretation

1. (1) In this Regulation,

“45-year major repair schedule” means a schedule that sets out, in reasonable detail and in a form acceptable to the Registrar,

(a) the major repairs to the common elements in a proposed residential condominium conversion project and to the assets, if any, of the condominium corporation in relation to the project that are expected to occur within a period of 45 years after the project registration date,

(b) the expected timing of each major repair described in clause (a), and

(c) the estimated cost of doing each major repair described in clause (a); (“budget des réparations majeures sur 45 ans”)

“common elements” has the same meaning as in subsection 1 (1) of the Condominium Act, 1998; (“parties communes”)

“condominium corporation” means a corporation as defined in subsection 1 (1) of the Condominium Act, 1998; (“association condominiale”)

“expected major repairs” means the major repairs that are expected to occur during the initial period; (“réparations majeures  prévues”)

“expected major repair schedule” means a schedule that sets out, in reasonable detail and in a form acceptable to the Registrar,

(a) the expected major repairs to the units and common elements in a residential condominium conversion project and to the assets, if any, of the condominium corporation in relation to the project,

(b) the expected timing of each expected major repair described in clause (a), and

(c) the estimated cost of doing each expected major repair described in clause (a); (“budget des réparations majeures prévues”)

“initial period” means the initial period determined in accordance with subsection 17.1 (2) of the Act; (“période initiale”)

“major repairs” means any repair or replacement to the pre-existing elements,

(a) that is not ordinary maintenance,

(b) for which the cost exceeds $2,000, and

(c) that is expected to occur after the project registration date because the remaining service life of the pre-existing elements, in the case of a repair to them, or a subsequent service life of them, in the case of a replacement of them, has come to an end; (“réparations majeures”)

“project registration date” means, in relation to a residential condominium conversion project,

(a) the date that the declaration and description of the condominium corporation in relation to the project are registered in accordance with section 2 of the Condominium Act, 1998, if the project is not a phase, or

(b) the date that the amendment to both the declaration and description that creates the phase is registered in accordance with section 146 of the Condominium Act, 1998, if the project is a phase; (“date d’enregistrement du projet”)

“remaining service life” means, in relation to pre-existing elements, the time period between their current age and the time when major repairs to them are next expected to become necessary; (“durée de vie restante”)

“service life” means, in relation to pre-existing elements,

(a) the length of time, as accepted in the industry, between full replacements of one or more of the pre-existing elements, and

(b) the length of time until a major repair that includes less than full replacement is typically needed to one or more of the pre-existing elements; (“durée de vie”)

“standard trust agreement” means the form of trust agreement for a pre-existing elements fund that is described in section 6; (“convention de fiducie type”)

“trustee” means a corporation registered under the Loan and Trust Corporations Act, a person who is entitled to practise law in Ontario as a solicitor or a partnership of such persons, where the Registrar has approved the corporation, person or persons to act as a trustee for the purposes of this Regulation; (“fiduciaire”)

“unit” has the same meaning as in subsection 1 (1) of the Condominium Act, 1998. (“partie privative”)

(2) For the purpose of clause (a) of the definition of capital replacement plan in subsection 17.1 (1) of the Act, the prescribed repair is the major repairs as defined in subsection (1) of this section.

(3) For the purpose of subclause (c) (ii) of the definition of pre-existing elements in subsection 17.1 (1) of the Act, the prescribed use is the use as a single household dwelling, boarding house, dormitory, group home, hotel, retirement home, rooming house, correctional institution, medical institution or place of worship or religious institution, such as a church, mosque, synagogue or temple.

(4) For the purposes of subsections 17.1 (3) and (4) of the Act, the prescribed work consists of any exploratory testing or demolition in relation to the residential condominium conversion project or proposed residential condominium conversion project.

(5) For the purpose of paragraph 2 of subsection 17.3 (2) of the Act, the prescribed criteria are the requirements described in paragraphs 1, 3 and 4 of that subsection.

Property assessment report

2. (1) A property assessment report shall be in writing and shall be prepared by a person,

(a) who,

(i) holds a certificate of authorization within the meaning of the Professional Engineers Act,

(ii) holds a certificate of practice within the meaning of the Architects Act, or

(iii) has the qualifications for making the report that are satisfactory to the Registrar on a reasonable basis; and

(b) who holds errors and omissions insurance or other proper insurance that is satisfactory to the Registrar on a reasonable basis.

(2) For the purpose of clause (c) of the definition of property assessment report in subsection 17.1 (1) of the Act, a property assessment report shall contain,

(a) a general description of the property or proposed property that is a residential condominium conversion project;

(b) a general description of which elements of the property or proposed property will be removed as part of a residential condominium conversion project and which elements will be retained as part of the project;

(c) a general description of the additions, alterations or extensions that are proposed to be made to the property or proposed property that is a residential condominium conversion project before the project registration date or, if applicable, a statement that there are no such additions, alterations or extensions;

(d) for the purpose of demonstrating compliance with subsection (1), a copy of the certificate of authorization within the meaning of the Professional Engineers Act, a copy of the certificate of practice within the meaning of the Architects Act or other written attestation that attests to the qualifications of the person who prepared the report and that is in the form satisfactory to the Registrar on a reasonable basis, as the case may be;

(e) information about the person who prepared the report and persons who provided observations, test results and opinions to that person, where the information is sufficient to establish that,

(i) all of those persons were acting at arm’s length from the vendor in relation to the residential condominium conversion project and the person from whom the vendor acquired title to the property or proposed property that is the project, and

(ii) none of those persons have a financial interest in the residential condominium conversion project; and

(f) the information that is relevant to the report and that the Registrar reasonably requires be included.

(3) The Registrar shall ensure that the Corporation sets out a description of the information described in clause (2) (f) in a written information circular or other document that is posted on the Corporation’s website.

(4) The vendor in relation to a residential condominium conversion project shall submit a property assessment report for the project to the Registrar at least 90 days before the commencement date of the project.

(5) The Registrar shall assess the adequacy of the property assessment report based on its quality and completeness and whether it complies with the requirements of subsections (1) and (2).

Capital replacement plan

3. (1) A capital replacement plan shall be in writing and shall be prepared by a person,

(a) who,

(i) holds a certificate of authorization within the meaning of the Professional Engineers Act,

(ii) holds a certificate of practice within the meaning of the Architects Act, or

(iii) has the qualifications for making the plan that are satisfactory to the Registrar on a reasonable basis; and

(b) who holds errors and omissions insurance or other proper insurance that is satisfactory to the Registrar on a reasonable basis.

(2) For the purpose of subclause (a) (iii) of the definition of capital replacement plan in subsection 17.1 (1) of the Act, a capital replacement plan in relation to a residential condominium conversion project shall contain,

(a) a description and details of the pre-existing elements of the project;

(b) a description of the findings of testing that the Registrar has required of the pre-existing elements of the project and optional testing done of the pre-existing elements or, if applicable, a statement that the Registrar required no such testing;

(c) a description of the condition of the pre-existing elements of the project;

(d) an identification of key risks for the project, including the challenges of mixing new and existing physical elements and systems in the project or, if applicable, a statement that there are no such risks;

(e) a description of the repairs, modifications or replacements to the pre-existing elements of the project that the vendor will undertake before the project registration date or, if applicable, a statement that there are no such repairs, modifications or replacements;

(f) the impact of heritage status or attributes as recognized by applicable law, if any, on the project or, if applicable, a statement that there is no such impact;

(g) a preliminary confirmation that the project, including the pre-existing elements, is structurally adequate or will be structurally adequate before any units will be occupied;

(h) the 45-year major repair schedule for the project;

(i) the expected major repair schedule for the project, if any;

(j) for the purpose of demonstrating compliance with subsection (1), a copy of the certificate of authorization within the meaning of the Professional Engineers Act, a copy of the certificate of practice within the meaning of the Architects Act or other written attestation that attests to the qualifications of the person who prepared the plan and that is in the form satisfactory to the Registrar on a reasonable basis, as the case may be;

(k) information about the person who prepared the plan and persons who provided observations, test results and opinions to that person, where the information is sufficient to establish that,

(i) all of those persons were acting at arm’s length from the vendor in relation to the residential condominium conversion project and the person from the vendor acquired title to the property or proposed property that is the project, and

(ii) none of those persons have a financial interest in the residential condominium conversion project; and

(l) the information that is relevant to the plan and that the Registrar reasonably requires be included.

(3) The Registrar shall ensure that the Corporation sets out a description of the information described in clause (2) (l) in a written information circular or other document that is posted on the Corporation’s website.

(4) The vendor in relation to a residential condominium conversion project shall submit a capital replacement plan for the project to the Registrar at least 90 days before the commencement date of the project.

(5) The Registrar shall assess the adequacy of the capital replacement plan based on its quality and completeness and whether it complies with the requirements of subsections (1) and (2).

Pre-existing elements fund study

4. (1) A pre-existing elements fund study shall be a report in writing and shall be prepared by a person,

(a) who,

(i) holds a certificate of authorization within the meaning of the Professional Engineers Act,

(ii) holds a certificate of practice within the meaning of the Architects Act, or

(iii) has the qualifications for making the study that are satisfactory to the Registrar on a reasonable basis; and

(b) who holds errors and omissions insurance or other proper insurance that is satisfactory to the Registrar on a reasonable basis.

(2) For the purpose of clause (b) of the definition of pre-existing elements fund study in subsection 17.1 (1) of the Act, a pre-existing elements fund study in relation to a residential condominium conversion project shall contain,

(a) a plain language overview of the project;

(b) a list of the pre-existing elements of the project and a description of their history;

(c) a description of the repairs, modifications or replacements to the pre-existing elements of the project that the vendor will undertake before the project registration date or, if applicable, a statement that there are no such repairs, modifications or replacements;

(d) the 45-year major repair schedule for the project;

(e) the expected major repair schedule for the project, if any;

(f) for the purpose of demonstrating compliance with subsection (1), a copy of the certificate of authorization within the meaning of the Professional Engineers Act, a copy of the certificate of practice within the meaning of the Architects Act or other written attestation that attests to the qualifications of the person who prepared the study and that is in the form satisfactory to the Registrar on a reasonable basis, as the case may be;

(g) information about the person who prepared the study and persons who provided observations, test results and opinions to that person, where the information is sufficient to establish that,

(i) all of those persons were acting at arm’s length from the vendor in relation to the residential condominium conversion project and the person from the vendor acquired title to the property or proposed property that is the project, and

(ii) none of those persons have a financial interest in the residential condominium conversion project; and

(h) the information that is relevant to the study and that the Registrar reasonably requires be included.

(3) The Registrar shall ensure that the Corporation sets out a description of the information described in clause (2) (h) in a written information circular or other document that is posted on the Corporation’s website.

(4) The vendor in relation to a residential condominium conversion project shall submit a pre-existing elements fund study for the project to the Registrar at least 90 days before the commencement date of the project.

(5) The Registrar shall assess the adequacy of the pre-existing elements study based on its quality and completeness and whether it complies with the requirements of subsections (1) and (2).

(6) The vendor in relation to a residential condominium conversion project shall submit,

(a) an update of the pre-existing elements fund study to the Registrar on or before the first anniversary of the date that the first unit in the project is enrolled in the Plan and on or before every anniversary of that date of enrolment until the project registration date; and

(b) a final update of the study to the Registrar no earlier than 90 days and no later than 60 days before the project registration date.

(7) Subject to subsection (8), an update shall consist of,

(a) if applicable, written confirmation certified by a senior officer or principal of the vendor that there have been no changes to the residential condominium conversion project that affect the pre-existing elements fund study since the later of,

(i) the time that the vendor submitted the study to the Registrar, and

(ii) the time that the vendor last submitted an update to the Registrar under this subsection; or

(b) a brief description of the changes, if there have been changes to the residential condominium conversion project that affect the pre-existing elements fund study since the later of the times described in clause (a), including, in the case of changes to the estimated costs set out in the 45-year major repair schedule or the expected major repair schedule,

(i) details of any increase or decrease in the estimated costs set out in the 45-year major repair schedule or the expected major repair schedule,

(ii) a description of how and why the changes came about, and

(iii) a revised expected major repair schedule and a revised 45-year major repair schedule for the project if and to the extent they are affected by the changes.

(8) If an update is the final update that the vendor is required to submit to the Registrar under subsection (6), the update shall contain, in addition to the material that subsection (7) requires, a brief description of all changes made to the residential condominium conversion project that affect the pre-existing elements fund study and made since the vendor submitted the study under subsection (4) and a consolidated revised expected major repair schedule for the project.

(9) The Registrar shall use reasonable efforts to review an update within 30 days of receiving it under subsection (6).

(10) If any update or updates collectively submitted under subsection (6) indicate that the amount of the pre-existing elements fund should in the aggregate be increased by 25 per cent or more, the vendor shall, within 30 days of receiving a written request from the Registrar, increase the amount of the pre-existing elements fund by the amount specified in the update or the updates collectively, as applicable.

(11) Despite subsection (10), if the final update indicates that the amount of the pre-existing elements fund should be increased by an amount that is different from the amount required by that subsection, having regard to updates previously submitted under subsection (6) and additional amounts, if any, previously added to the fund, the vendor shall, within 30 days of receiving a written request from the Registrar, increase the amount of the pre-existing elements fund by the amount specified in the update.

(12) If the final update indicates that the amount of the pre-existing elements fund should be reduced, the vendor may, by sending a written notice and certificate to that effect to the trustee, authorize that the pre-existing elements fund be reduced by the applicable amount, which the trustee shall pay to the vendor out of the fund.

Confirmation of registration and enrolment

5. (1) The Registrar shall prepare and post on the Corporation’s website a form of confirmation for the purposes of section 17.4 of the Act.

(2) The form of confirmation may include other details relevant to the residential condominium conversion project that the Registrar determines are reasonably necessary or desirable.

Standard form trust agreement

6. The Registrar shall prepare the standard form trust agreement and post a copy of it on the Corporation’s website.

Pre-existing elements fund

7. (1) The vendor in relation to a residential condominium conversion project shall establish and maintain the pre-existing elements fund for the project in the manner specified in this section.

(2) The vendor shall arrange for the creation of a trust escrow account with a trustee in accordance with a trust agreement that follows the form of the standard trust agreement.

(3) The vendor shall pay the cost of establishing and maintaining the trust escrow account and shall fund it from the vendor’s own resources with an amount equal to the aggregate estimated costs of major repairs as set out in the expected major repair schedule for the residential condominium conversion project.

(4) The vendor shall do the funding required by subsection (3) by,

(a) the date that the first unit in the residential condominium conversion project is enrolled in the Plan; or

(b) in the case of a residential condominium conversion project that has multiple phases, for which the Registrar requires a certain amount under subsection (3) in respect of a phase, the date that the first unit in that phase is enrolled in the Plan.

(5) The trust escrow account shall constitute the pre-existing elements fund for the residential condominium conversion project.

(6) If the expected major repair schedule for a residential condominium conversion project shows that any units in the project have expected major repairs and if the vendor in relation to the project proposes to transfer title to such a unit to the first purchaser in good faith who has agreed to pay fair market value for the unit, the vendor shall,

(a) provide written notice of the proposed transfer to the trustee as soon as reasonably possible and, in any event, no later than five days before making the transfer; and

(b) provide the trustee with written confirmation of the transfer within five days after making the transfer.

Certificates for release of money from pre-existing elements fund

8. (1) The Registrar shall specify the form of all certificates that a person is required to provide to the trustee under this regulation and under Ontario Regulation 520/17 (Residential Condominium Conversion Projects — Initial Period and Holding Pre-Existing Elements Fund) made under the Act when applying for the release of money from the pre-existing elements fund.

(2) The Registrar shall post a copy of the certificates described in subsection (1) on the Corporation’s website.

Use of money received from pre-existing elements fund

9. (1) For the purposes of subsection 3 (2) of Ontario Regulation 520/17 (Residential Condominium Conversion Projects — Initial Period and Holding Pre-Existing Elements Fund) made under the Act, the persons described in subsections (2), (3), (5) and (7) of this section are permitted to receive money from the pre-existing elements fund of a residential condominium conversion project.

(2) If the first purchaser in good faith of a unit in a residential condominium conversion project has agreed to pay fair market value for the unit, the vendor of the unit is permitted to receive money from the pre-existing elements fund of the project before the project registration date if,

(a) the money is the portion of the fund in relation to the unit;

(b) the money is paid to the vendor after the vendor has made expected major repairs, as described in the expected major repair schedule for the project; and

(c) the vendor provides to the trustee a sworn statement of a senior officer of the vendor attached to a certificate of the vendor that, with respect to the expected major repairs described in clause (b),

(i) identifies the repairs and confirms that they have been made,

(ii) specifies the cost of the repairs, and

(iii) attaches invoices for the cost of the repairs and provides proof of payment of the invoices.

(3) The vendor in relation to a residential condominium conversion project is permitted to receive money from the pre-existing elements fund of the project before the project registration date if the vendor provides the documentation described in subsection (4) to the trustee and if,

(a) the money is the portion of the fund in relation to common elements in the project and the money is paid to the vendor after the vendor has made expected major repairs to the common elements, as those repairs are described in the expected major repair schedule for the project; or

(b) the money is the portion of the fund in relation to the assets, if any, of the condominium corporation in relation to the project and the money is paid to the vendor after the vendor has made expected major repairs to those assets, as those repairs are described in the expected major repair schedule for the project.

(4) The documentation that subsection (3) requires consists of a sworn statement of a senior officer of the vendor attached to a certificate of the vendor that, with respect to the expected major repairs described in clause (3) (a) or (b),

(a) identifies the repairs and confirms that they have been made;

(b) specifies the cost of the repairs; and

(c) attaches invoices for the cost of the repairs and provides proof of payment of the invoices.

(5) The condominium corporation in relation to a residential condominium conversion project is permitted to receive money from the pre-existing elements fund of the project on or after the project registration date if the corporation provides the documentation described in subsection (6) to the trustee and if,

(a) the money is the portion of the fund in relation to common elements in the project and the money is paid to the corporation after the corporation has made expected major repairs to the common elements, as those repairs are described in the expected major repair schedule for the project; or

(b) the money is the portion of the fund in relation to the assets, if any, of the corporation and the money is paid to the corporation after the corporation has made expected major repairs to those assets, as those repairs are described in the expected major repair schedule for the project.

(6) The documentation that subsection (5) requires consists of a sworn statement of a senior officer of the condominium corporation attached to a certificate of the corporation that, with respect to the expected major repairs described in clause (5) (a) or (b),

(a) identifies the repairs and confirms that they have been made;

(b) specifies the cost of the repairs; and

(c) attaches invoices for the cost of the repairs and provides proof of payment of the invoices.

(7) The owner of a unit in a residential condominium conversion project who has received a transfer of title to the unit is permitted to receive money from the pre-existing elements fund of the project if,

(a) the money is the portion of the fund in relation to the unit and the money is paid to the owner after the owner has made expected major repairs to the unit, as those repairs are described in the expected major repair schedule for the project; and

(b) the owner provides to the trustee a sworn statement of the owner attached to a certificate of the owner that, with respect to the expected major repairs described in clause (a),

(i) identifies the repairs and confirms that they have been made,

(ii) specifies the cost of the repairs, and

(iii) attaches invoices for the cost of the repairs and provides proof of payment of the invoices.

(8)  Any money that a condominium corporation in relation to a residential condominium conversion project or the owner of a unit in the project receives or is permitted to receive from the pre-existing elements fund under this section shall be considered a benefit to the recipient or the recipient’s successor, if applicable, under subsection 14 (6) of the Act if the recipient or the recipient’s successor, if applicable, makes a claim under the Act for a breach of a warranty in relation to any of the pre-existing elements of the project.

(9) No action or other proceeding for damages or other relief shall be instituted against the Corporation, any of its employees or representatives or the trustee for an act done in good faith in the execution of or intended execution of their duties or powers under this section or for any alleged neglect or default in the execution in good faith of those duties or powers. 

Transition

10. This Regulation applies to a residential condominium conversion project only if the first purchase agreement entered into at arm’s length for a unit in the project is entered into on or after the day this section comes into force.

11. Omitted (provides for coming into force of provisions of this Regulation).

 

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