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What is the difference between a declaration, a by-law and a rule?

Region: Ontario Answer # 0428

 

Declaration and description

A condominium must be registered in order to come within the jurisdiction of the Condominium Act. In order to do so, it must register a declaration and description. The declaration and description can only be changed if over 80% of the owners agree to this change.

A declaration sets out various matters of condo ownership and should contain:

  • the common interests of each particular unit,
  • a list of the exclusive use common elements for particular condo units,
  • a list of the common elements, as well as
  • a statement of the shared common expenses for the common elements.

The schedules to the declaration must include, among other things:

  • a legal description of the land,
  • the boundaries of each condo unit,
  • any specifics regarding unit boundaries, as well as
  • the consent of those holding mortgages on the property at the time the declaration is registered.

A description is the survey plans and architectural plans of the building along with an architect’s certificate.

 

What is a disclosure statement?

A disclosure statement is a document compiled by a developer that tells purchasers important information about the newly built condos. It provides information about the future or existing condo property, and about the corporation, such as:

  • the corporation’s first-year budget,
  • the proposed or actual declaration, and
  • the by-laws and rules

Proposed changes

Currently, each condo declaration (and disclosure statement) can be different. Under proposed Condominium Act amendments expected to come into force by 2019, a declaration would follow a standard format and content that cannot be altered by developers. Standard content in a declaration would include unit boundaries, maintenance and repair obligations, and insurance requirements. A standardized disclosure statement summary would replace the current table of contents. These changes are intended to make the documents easier for the buyer to understand.

By-laws and rules

Matters that may be the subject of by-laws are specified in the Condominium Act. By-laws are passed by the board of directors. They are important for the administration of the condominium corporation and the management of the condominium building. For example, by-laws may restrict the use of common use elements by non-residents. There are also matters that are beyond the scope of the board, which if included in by-laws, may be challenged, even in court.

Rules are passed by a resolution of the Board and must comply with the Act, the declaration and the by-laws. A rule must be ‘reasonable’ and must be for the safety and security of unit owners and the corporation’s assets. In this regard, a rule may be instituted to prevent some interference with the use of the common element, or to ensure the continued enjoyment of the common elements. A Board may create or repeal a rule, however, if there has been an amendment to a rule, or a rule has been repealed, a board cannot pass a rule with the same purpose, within two years. Additional information can be obtained from the Government of Ontario, and from the Condominium Authority of Ontario (CAO).

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