Standard Unit Definition
Also see: Standard Unit By-laws; Insurance; About Condo memoranda on (a) the Standard Unit Definition generally and (b) the "bare bones" form of definition (i) from the condominium corporation's perspective and (ii) from the unit owner's perspective; "Insurance & The Condominium Act, 1998" (article)
Short Answer
A document that defines which components of a unit are to be treated as "standard" (meaning, insured by the condominium corporation and subject of the obligation to repair the unit after damage) or as "improvements" (meaning, insured by the unit owner and, subject to the declaration, solely the responsibility of the owner to insure, repair and maintain).
Definition
In regard to Standard and Leasehold Condominiums (including Phased Condominiums), the Condominium Act, 1998 (the "Act") requires that the condominium corporation insure each unit against major perils. However, the Act further provides that such obligation does not apply to any component of a unit defined as an "improvement" in a Standard Unit Definition for the unit in question.
Likewise, the Act states that the obligation to repair a unit after damage (by default, the obligation of the corporation under the Act, unless allocated in the declaration to the unit owner) is also restricted such that the obligation does not apply to any "improvement" as defined in a Standard Unit Definition for the unit in question.
It is important for each Standard, Phased and Leasehold Condominium to have a Standard Unit Definition in force.* Otherwise, where there is no Standard Unit Definition there are no "improvements" and all unit components are to be considered as “standard” and would therefore be the responsibility of the condominium corporation to insure. While this might be desirable in some cases, it is not desirable if it is merely accidental. In fact, where it is the case solely because no thought has been put to the issue, the risk arises that the condominium may be under-insured, while each owner may be either over- or under-insured, and some components of the unit might even be entirely uninsured. Each such condominium corporation's board of directors, manager and owners should thoughtfully turn their minds to what type of definition is appropriate for their condominium and ensure that a definition is duly in force.
*Vacant Land Condominiums and Common Elements Condominiums do not require a Standard Unit Definition.
A Standard Unit Definition comes into force in one of two ways.
Likewise, the Act states that the obligation to repair a unit after damage (by default, the obligation of the corporation under the Act, unless allocated in the declaration to the unit owner) is also restricted such that the obligation does not apply to any "improvement" as defined in a Standard Unit Definition for the unit in question.
It is important for each Standard, Phased and Leasehold Condominium to have a Standard Unit Definition in force.* Otherwise, where there is no Standard Unit Definition there are no "improvements" and all unit components are to be considered as “standard” and would therefore be the responsibility of the condominium corporation to insure. While this might be desirable in some cases, it is not desirable if it is merely accidental. In fact, where it is the case solely because no thought has been put to the issue, the risk arises that the condominium may be under-insured, while each owner may be either over- or under-insured, and some components of the unit might even be entirely uninsured. Each such condominium corporation's board of directors, manager and owners should thoughtfully turn their minds to what type of definition is appropriate for their condominium and ensure that a definition is duly in force.
*Vacant Land Condominiums and Common Elements Condominiums do not require a Standard Unit Definition.
A Standard Unit Definition comes into force in one of two ways.
- For Standard, Phased or Leasehold Condominiums brought into existence since May 5, 2001, the Act requires a declarant to deliver a schedule to the corporation setting out the Standard Unit Definition for each class of unit in the condominium, within 30 days of the Turnover Meeting (see subsection 43(5)(h) of the Act).
- Where no such definition exists, or where the board of directors of the corporation has determined the definition provided by the declarant is not appropriate or adequate, a new Standard Unit Definition may be enacted by by-law. See the Condopædia article on Standard Unit By-laws for further discussion about this.
Just to be clear: This probably doesn't mean what you think it means.
In the Act, neither of the terms “standard” or “improvement” have, in relation to the Standard Unit concept, their usual meanings. They are really just statutory "terms of art". In particular, it should be clearly understood that the term “standard unit” does not refer to the style or features of the unit as it was originally built, finished or furnished (i.e., the developer’s standard product). Rather, components of the unit may be defined as either “standard” or “improvements” regardless of whether they were included in the developer's original construction and design or were added or altered later on by a unit owner. For more detailed consideration of these concepts, see the About Condo memoranda referenced above and some of the comments below.
It should also be clarified that a Standard Unit Definition is not a definition, or re-definition, of unit boundaries. Unit boundaries are defined in the declaration and description of the condominium and cannot be altered by a Standard Unit Definition, whether or not enacted by by-law. The Standard Unit Definition deals only with those components of the condominium property that are already set out as being within the unit boundaries as described in the declaration and description.
In the Act, neither of the terms “standard” or “improvement” have, in relation to the Standard Unit concept, their usual meanings. They are really just statutory "terms of art". In particular, it should be clearly understood that the term “standard unit” does not refer to the style or features of the unit as it was originally built, finished or furnished (i.e., the developer’s standard product). Rather, components of the unit may be defined as either “standard” or “improvements” regardless of whether they were included in the developer's original construction and design or were added or altered later on by a unit owner. For more detailed consideration of these concepts, see the About Condo memoranda referenced above and some of the comments below.
It should also be clarified that a Standard Unit Definition is not a definition, or re-definition, of unit boundaries. Unit boundaries are defined in the declaration and description of the condominium and cannot be altered by a Standard Unit Definition, whether or not enacted by by-law. The Standard Unit Definition deals only with those components of the condominium property that are already set out as being within the unit boundaries as described in the declaration and description.
What you need to know…
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…as a Unit Owner
Each unit owner should be aware of the Standard Unit Definition in effect for his or her corporation and type of unit. In particular, an owner needs to know about this in order ensure that his or her unit owner's insurance policy is adequate to cover, and does not specifically exclude, those components of the unit defined as "improvements." If the condominium has a Standard Unit Definition, a copy of it should be provided by the owner to his or her insurance provider or agent to ensure adequate coverage is maintained. Owners also should be aware that any component of the unit defined as "standard" is subject to the obligation for repair after damage as defined in the Act and/or the declaration of the condominium. If the owner bears that obligation in respect of such components and fails to carry out the obligation in a timely manner, the condominium corporation can perform the repair and charge its costs for the same back to the owner as a common expense obligation. |
…as a Board Member or Manager
When reviewing or seeking to establish a new Standard Unit Definition, the board of directors, with the assistance of the property manager, if any, must consider two things. First, they should consider which components of the units it is appropriate and advisable for the condominium corporation to insure. This might or might not include all components. Often, corporations will seek to exclude from coverage (i.e., define as "improvements") those components of a unit that owners are most likely to upgrade or change (such as floor coverings, countertops, and certain plumbing features) as well as trim and other decorative fixtures. Conversely, corporations may seek to include as "standard" items that are structural or otherwise are required to ensure the unit, if substantially damanged, can be reconstructed to at least the basic shell with required utility feeds. Second, they should consider which components of the unit the corporation should ensure are subject of the obligation to repair after damage. If the condition of a unit component is relevant solely to the individual owner's enjoyment or use of the property, such a component might reasonably be defined as an "improvement," leaving the owner solely responsible for its repair (subject to any contrary provisions in the declaration of the corporation). However, any components that, if left in disrepair, could negatively impact the condition or safety of other units or the common elements, or that could diminish the appearance and/or value and enjoyment of the property for other owners, generally should be defined as "standard". It should be noted that unless there are other, enforceable terms in the declaration that change this, a condominium corporation lacks the ability to step into the place of the owner to effect repair after damage of any components of the unit that are defined as "improvements" under section 92 of the Act. Therefore, anything that it is important to keep in good repair should be defined as "standard". (See the About Condo memos referenced at the top of this page for more detailed discussino of these matters.) |
…as a Declarant
As noted above, since May 5, 2001, declarants of Standard, Phased and Leasehold Condominiums are required under the Act to deliver a schedule setting out the Standard Unit Definition for each class of unit in the condominium, within 30 days of the Turnover Meeting. See subsection 43(5)(h) of the Act. It should be noted, though, that a declarant is effectively required (or, at least, should be strongly advised) to have such a definition in place well before this, since the insurance and repair obligations of the condominium corporation and the unit owners come into effect immediately upon registration of the declaration and description creating the condominium. Thus, as unit owner, the declarant should ensure each unit is effective and adequately insured. In addition, the board of directors appointed by the declarant shortly after registration of the condominium is responsible to ensure that the condominium is adequately and appropriately insured, and an insurance certificate for the same will need to be included with the status certificates that are likely to be ordered by each purchaser's solicitor (if for no other reason, to satisfy the requirements of such purchasers' mortgagees). If the declarant fails to put in place a Standard Unit Definition at the time the condominium comes into existence, the default is that the entirety of each unit is to be treated as "standard" and will have to be insured as such by the condominium corporation. Therefore, unless the declarant has actually turned its mind to this issue earlier, it is possible that the condominium's insurance will cost more than projected in the declarant's first-year budget, or it is possible that inadequate coverage will be purchased. When preparing a Standard Unit Definition, the declarant should not simply restate the unit specifications and features listed in the declarant's marketing materials. A few problems can arise when a declarant seeks to do this.
One is that the developer’s list of standard features is often inadequate. It typically will not include mention of several basic components of the unit, such as walls and ceilings, which it is usually appropriate to refer to in the Standard Unit Definition. The other is that it sometimes includes too much: that is, that frequently such lists will refer to features appurtenant to the unit that are, in fact, common elements and not actually part of the unit at all. No part of the common elements can be the subject matter of a Standard Unit Definition. Also, typically, the declarant's marketing materials may describe a range of features and finishes, or even merely state that a range of options exists. Including such terms in a Standard Unit Definition lacks the specificity that is required for the definition to be useful. On account of these kinds of problem, the use of the declarant's list of specifications and features as the Standard Unit Definition usually renders the definition ineffective in regard to the purposes for which it is intended. |