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By Seth Jutzi 2015/09/07

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The Ontario Liberal Government recently introduced new legislation intended to overhaul the province’s outdated condominium laws.  With an estimated 1.3 million condo owners in Ontario and condos making up more than half of new homes being built, the condominium landscape has changed drastically since the Condominium Act came into force in 1998. Accordingly, condo owners and prospective purchasers in today’s market face problems not contemplated by existing condo laws. The new bill, known as the “Protecting Condominium Owners Act,” aims to enhance the protection of condo owners through increased oversight of condo boards and managers, regulations to reduce the occurrence of fraud, and also creates a new mechanism for alternative dispute resolution.

The proposed bill comes as a result of two years of governmental consultation and review, and focuses on protecting the financial interests of condo owners and purchasers by imposing stricter disclosure obligations on condo boards.  The legislation also seeks to enhance the accountability of condo boards to owners regarding ongoing operating costs. Increased disclosure requirements are also intended to promote financial transparency and alert prospective purchasers to unexpected costs that might arise post-closing.

For owners of existing condos, the mismanagement of condo corporation finances has become a frequent problem. There has been a steady rise in the number of court-appointed administrators taking control where condo boards have failed to maintain adequate reserve funds. This can result in condo owners incurring extra expenses for the replacement and repair of common elements, which is something that reserve funds are intended to cover. The new legislation will impose strict regulations on condo boards to ensure that reserve funds are kept at adequate levels and will set higher standards for the financial management of condo corporations. Furthermore, the legislation provides for the establishment of an independent licensing authority for condo managers, requiring minimum qualifications and mandatory training. These new provisions aim to regulate the growing industry of condo managers. The licensing system should also reduce the prevalence of fraud in the management of condo finances.

Perhaps the most salient feature of the new legislation is the creation of a new mechanism for dispute resolution. An independent administrative tribunal called the “Condo Authority” will be an arms-length, self-funded alternative to traditional litigation involving condo disputes. It will allow for quicker, lower-cost dispute resolution, making it easier for condo owners to settle complaints while avoiding lengthy and costly litigation. A charge of $1 per month per condo, collected as part of monthly condo fees, will be imposed to fund the Condo Authority. While some condo owners will be opposed to the new fee, it pales in comparison to the hefty costs usually associated with condo disputes.

Despite the need for reform, the new bill fails to address some important areas of concern for condo owners. For example, it neglects to provide a framework for relief in situations where purchasers are unhappy with substandard construction or condo developers do not deliver on their promises. The new provisions are instead centred on the prevention of condo mismanagement and fraud through enhanced regulation and oversight mechanisms. The proposed reforms are long-awaited, and upon successful implementation, should bolster the protection of condo owners. If passed, the Government expects that the new legislation will come into effect in 2016, with the Condo Authority to be up and running by 2017.

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Seth Jutzi is a lawyer in the corporate-commercial group at SorbaraLaw, bringing a collaborative approach to deconstructing legal and business issues in pursuit of innovative solutions for his clients.

Labour and Employment – Seth Jutzi

The Holiday Season may now have come and gone for another year, but did you make sure to track your overtime? Many employees likely did.

While holidays traditionally are a time for celebration and gathering with family and friends, increasingly they are becoming a time to catch up on work. The advent of mobile technology has transformed the world, and along with it the way we engage in work. Now, travelling to Aunt Tricia’s house in Hamilton or riding the chair lift at the ski hill are opportunities to check your smartphone or remotely log into your workplace desktop to catch up on email messages and the latest draft of an important document.

While mobile technology has allowed employers to increase workplace productivity, it has also kicked open the door to lawsuits brought by employees for unpaid overtime. Whether performed in the traditional workplace setting or on a smartphone outside regular office hours, employers have to keep in mind that these are workplace duties being performed for which employees can demand compensation.

In Ontario, overtime pay is governed by the Employment Standards Act, which states that employees shall receive overtime pay of at least one and one-half times the regular rate of pay for each hour worked in excess of 44 hours per week. The Act governs the vast majority of Ontario’s workforce, with a few exceptions for certain classes of workers like those in managerial roles or in certain professions like accounting and medicine.

Answering a few emails every evening and reviewing a set of documents on a Saturday morning can quickly push the average employee well beyond the 44-hour mark. All employers should be aware of this growing legal liability.

Several unpaid overtime cases are making their way through our legal systems. These cases include two high-profile class action lawsuits against the Canadian Imperial Bank of Commerce and the Bank of Nova Scotia. In the CIBC case, 3,000 employees are seeking $600 million in overtime pay, while in the case of Scotiabank, approximately 5,000 employees are claiming $350 million.

Employers who fail to address this issue run the risk of facing either civil litigation (i.e. a traditional lawsuit launched by the employee) or a complaint filed with the Ministry of Labour. If an employment standards officer finds that an employer owes wages to an employee, the officer may award the employee up to $10,000 in compensation.

Additionally, a corporation that is found to have contravened the Employment Standards Act can face a fine of up to $100,000 for a first offence. Fines for second and third offences can be as high as $250,000 and $500,000, respectively. In the case of an individual employer (i.e. a sole proprietorship), a contravention of the Act can lead to imprisonment for up to twelve months.

Employers should be mindful and ensure that there are clear and consistent policies regarding overtime and the use of mobile technology. Wherever such overtime is a likely component of an employee’s position, employers are well advised to address the issue directly in employment agreements.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: Seth Jutzi is a lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario.  Seth may be reached at (519) 741-8010 or <sjutzi@sorbaralaw.com>.

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