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Condo Builders Beware

By: Anna Esposito (Mississauga Business Times – February 2011)

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Condo Owner Must Publish Notice of Intentions

The Open for Business Act, 2010, received royal assent on October 25, 2010.

The aim of this Act is to create a more competitive business climate in the province of Ontario by amending or repealing more than 40 pieces of legislation, including the Construction Lien Act (CLA).

A number of new obligations were created which, when they come into force, will have an impact on condominium construction, and therefore builders and construction trades.

Some of the CLA amendments, including an expanded definition of the concept of “improvement,” came into force on October 25, 2010.

The changes have been already been enacted, but some have not been proclaimed into force yet, but they will be. So, stay tuned.

Duty to publish notice of condo registration, by condo owner.

A brand new section was added to the CLA that applies to land that is intended to be registered as a condominium corporation in accordance with the Condominium Act, 1998.

An owner must now publish notice of his or her intention to register the condominium, in a construction trade newspaper, at least five and not more than 15 days before the condominium is submitted for approval under the Condominium Act.

This is a new obligation imposed upon owners of condominium projects.

The publication is intended to give notice to all suppliers of services or materials to the project that the land will soon be registered as a condominium. This gives an unpaid trade the opportunity to decide whether to register a lien before the lands and premises are divided into separate condominium units and title is transferred to various homebuyers.

Under the Act, a person has a lien upon the interest of the owner in the premises improved. However, the definition of owner specifically excludes a ‘home buyer,’ which includes a typical purchaser of a condominium unit.

This new notice must be in a prescribed form and must include:

(a) the owner’s name and address for service;

(b) a concise overview of the land described in the description, including reference to the lot and plan number and the parcel number or numbers of the land; and

(c) if, to the best of the owner’s knowledge, information and belief, a contractor supplied services or materials to an improvement in respect of the land during the 90-day period preceding the day on which the description is to be submitted for approval under subsection 9 (3) of the Condominium Act, 1998, the contractor’s name, address and, if known, address for service.

Failure to comply with this obligation may have serious consequences.

An owner who fails to publish this new notice will be liable to any person entitled to a lien who suffers damages as a result.

As of January 6, 2011, there has been no proclamation of the Lieutenant Governor naming the date when this change will come into force.

The best thing about P.V. is that they use the right lawyer for the right service, both in terms of type of service and size of file.
Vince Siciliano, BDO Canada Limited