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

Region: Ontario Answer Number: 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 also be obtained from the Government of Ontario, and from the Condominium Authority of Ontario (CAO).

If you are buying a home and want to know how much of a mortgage you qualify for, use the Scotiabank mortgage calculator .

 




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