In December, 2016, the Ontario government provided draft regulations under the Condominium Management Services Act, 2015 (hereafter, the “CMSA”). These are the regulations that deal with the licensing of condominium property managers. Although not final, we can expect that, in principle at least, these are the regulations that will be enacted. So, in the interest of continuing to prepare better for what is to come, in this entry and two that follow we provide you with our set of comprehensive highlights.
PART 1: Types of License
The CMSA regulations provide for four types of license. Three of these - the “Limited License”, a “General License” and a “Transitional General License” – apply to individual property managers, and the fourth is the license for a “condominium management provider” (or, management company). They also provided for a “deemed” Limited License and a “deemed” Transitional General License, just, of course, to make things a little complex. (How else will they keep lawyers employed?)
Not all requirements for each type of individual license are identical, but it is worth noting that every property manager who is a licensee must be marginally adult (over 18 years old) and not have a long criminal history (there must be a clear criminal record check dated no further back than 6 months prior to the time of application). Other requirements pertaining to such things as education and work experience vary and might even be waived to some extent or another based on factors the Registrar appointed under the CMSA can consider; but, in general, the objective appears to be to license only managers who demonstrate basic maturity, trust-worthiness, knowledge and capability to manage condominium properties in accordance with the law, or who are directly supervised by such people in order to make sure that they do.
When the relevant provisions of the CMSA come into force, each current property manager will either be deemed to hold a Limited License, or will be deemed to hold a Transitional General License. Both will have up to 150 days (subject to discretion by the Registrar) to apply for, respectively, an actual Limited License, Transitional General License or General License. Failure to apply within the permitted time period results in the deemed license lapsing, terminating the right of that individual to provide condominium management services.
The distinction between whether a manager has a deemed Limited License or a deemed Transitional General License, comes down to experience. A minimum two years’ experience is required to hold a deemed Transitional General License.
As that statement implies, a Limited License is basically for managers with little-to-no experience, which is quantified as having less than 2 years’ experience. Currently, a Limited License holder (including a deemed licensee) has no educational requirements to qualify for a license (though the regulations allows for some to be imposed), but must work under someone holding a General License or Transitional General License. They require such licensee’s express approval for some acts (such as entering contracts and handling operating funds), and there are certain things (such as handling the Reserve Fund or issuing status certificates) that simply cannot be done by a Limited Licensee.
Limited License holders have five years in which to progress to a General License, or the Limited License may not be renewed (subject to limited discretion on the part of the Registrar).
The General Licensee has the same more-or-less unlimited power as a current condominium manager is expected to wield, subject, of course, to the terms of the management agreement and the instructions of the condominium’s board of directors.
The primary differences between the requirements for a General License and a Limited License are based on education and experience. A General Licensee must, at the time of application, have had at least two years’ certified experience, which includes some specific tasks such as planning and conducting meetings of condominium boards and owners, preparing condominium budgets, interpreting condominium financial statements, and overseeing condominium management and repairs. The General Licensee must also have satisfied the educational requirements imposed by the Registrar, or their equivalent (as approved by the Registrar in accordance with the regulations).
In general, the educational requirements for a General Licensee are those required to become an RCM. In fact, an RCM in good standing with ACMO, or a manager who has completed certain courses offered by ACMO, and who held a deemed Transitional General License at the time the CMSA comes into force, is deemed automatically to have the educational (and most other) requirements for licensing.
The Transitional General License is an interesting compromise between the two other types of license. It appears basically to be available for people who will meet the requirements for a deemed Transitional General License when the CMSA comes into force, but who do not meet the educational requirements necessary to obtain a General License proper. Subject to the discretion of the Registrar, a manager can only renew a Transitional General License for up to 3 years before it expires, so this more or less limits the time the manager should take to meet the educational requirements for a General License.
The fourth and final type of license is that which is issued to a “condominium management provider,” which is a corporation, partnership, association, other organization, or a sole proprietor, that provides condominium management services. Every such provider is deemed to hold a condominium management provider license provided it was providing such services to at least one client as of the day prior to the day that the CMSA comes into force. The organization or entity must apply for a license proper within 150 days of that time, or else the deemed license will expire (subject to the discretion of the Registrar).
Each condominium management provider license holder must have a designated “principal condominium manager”. Unusually, the regulations provide that this requirement does not apply while the entity holds only a deemed condominium management provider license. It is not clear why this provision is needed, since the regulations could also just as easily have provided that the principal condominium manager, during the time that the deemed condominium management provider license is in place, could also be a deemed licensee.
Note that one of the interesting twists in this set up is that a property manager who is a sole proprietor will need to obtain two licenses: one for him- or herself and the other for his or her ‘company’. No exemption appears to be provided for this; though one would think it only fair if the sole proprietor manager receives some sort of a break on fees, at least. We did not see this provided for in the regulations, but nothing should stop the Registrar from putting such a break in place.