The sensational stories in the news over the past few years, about condominium corporations left with depleted reserve funds as a result of fraud by condo managers, has now piqued the government’s and public’s interest in the regulation of the property management industry. It is clear that companies and individuals providing condominium management services with little or no experience in the area should not be permitted to provide those services, and only those with specialized knowledge, expertise and training should do so.
It is hard to believe that there are presently no minimum requirements or regulations governing condo managers; this move toward regulation is long overdue.
The Stage Two Solutions Report on the Condominium Act Review recommends that condo managers must be licensed. With the implementation of those recommendations, manager licensing will soon become part of the Province of Ontario’s regulatory process and with it, there will be a formal designation of condominium managers as professionals.
The basic premise of the recommendations is that condominium managers will have to obtain and maintain a license if the manager performs services for compensation. (This applies to condominium corporations that are governed by the Condominium Act and, unfortunately, not cooperatives or co-ownerships.) Managers must obtain a license through a two stage program.
The stage one program requires that the manager fulfill the following requirements before being able to work as a condo manager and obtain a stage one license:
1. 18 years of age or older;
2. High school graduate or equivalent;
3. not be an undischarged bankrupt;
4. pay a required fee;
5. meet minimum requirements for insurance;
6. agree to a police check for a criminal record; and
7. pass a test on the Condominium Act.
In addition to fulfilling stage 1, the second stage program requires the following:
1. Completion of designated courses;
2. Minimum of two years’ experience as a manager;
3. Compliance with the code of ethics and professionalism;
4. Ongoing continuing education requirements; and
5. Final exam.
These requirements must be completed within 4 years of the stage one license.
The Report recommends that a new, government-delegated, administrative authority (that will form part of the proposed Condo Office) will be responsible for overseeing the implementation of the licensing regime. It has not been determined whether those Licensing Office individuals responsible for manager licensing will be drawn from within the management industry, similar to many professional-regulated boards. Funds for the operation of this licensing office will come from fees charged to manager-licensees, fines and penalties, and a monthly fee levied on unit owners.
The requirement for a license does not apply to the support staff and administrative personnel of management companies. Directors or others who perform services for self-managed condominiums will also be exempt from the licensing requirement, unless they are compensated for those services.
As a concession to experienced managers, those who have performed condo management for a period of 10 years or more will be exempt from the stage two requirements, with the exception that they must still pass the stage two examination and still meet the stage one criteria.
All licensed managers will have to fulfill a continuing education requirement (which has yet to be determined), which will be established by the Licensing Office. The required educational courses will likely be offered by both private and not-for-profit organizations by certified trainers established through the Licensing Office. Failure by managers to meet the educational requirements could mean the loss of their license.
A key recommendation is the introduction of a code of ethics established by the Licensing Office for condo managers to abide by. What has not been clearly set out is how far the powers of the Licensing Office will extend and whether the Licensing Office will have the ability to suspend or revoke a license for unprofessional conduct by a condo manager.
Other important aspects of the recommendations are that the management companies be certified and that they will be required to provide a fidelity bond covering loss of funds, as well as errors and omissions insurance and professional liability insurance.
Given the number of condominium corporations in Ontario and the amount of funds handled by condo managers, the introduction of this new licensing regime is the proper response to ensure professionalism and provide consumer protection to condominium communities and the industry as a whole.
