Proactive Inspections: Enhanced Protection for Ontario’s Condominium Consumers
When the CMRAO was first established, as part of its consumer protection mandate inspections of condominium managers and provider businesses were conducted in response to complaints alleging that a licensee had violated the Condominium Management Services Act, 2015 (CMSA) and its regulations.
In the Auditor General of Ontario’s Value-for-Money Audit Report in 2020, it was recommended that the CMRAO conduct proactive inspections to monitor and assess whether managers and provider businesses were complying with key statutory requirements. In response, the CMRAO initiated a risk-based inspections program in fiscal year 2022–23, in which licensees were selected based on a number of factors, such as observed trends, geography, and previous complaints. It is possible that the selection process will evolve over time.
Proactive inspections help the CMRAO review a licensee’s business practice and ensure compliance with the governing legislation, as well as recommend changes and enhancements, as appropriate. The purpose of proactive inspections is to enhance the delivery of condominium management services in Ontario in the interest of consumer protection, and although the CMRAO’s Registrar reserves the right to take regulatory action, these inspections are not intended to be punitive or disciplinary.
In 2022–23, the CMRAO initiated its pilot project in which the scope included inspections of 12 condominium management provider businesses across Ontario (ranging in size from small to large) and focused on four key areas:
- Records management practices
- Administration of owners’ meetings and elections, and the use of proxy forms
- Conflicts of interest policies and disclosure to client boards of directors
- Requirement to hold a written contract with clients
These inspections provided the CMRAO with valuable insight into the providers’ operations, training, records management, and processes. After an inspection was complete, the CMRAO provided recommendations to each provider to help them ensure their operations were aligned and compliant with legislative requirements. The Report on the CMRAO’s Inspections Pilot Program outlines the scope and key findings.
In 2023–24, the CMRAO is expanding the program to include new inspections focused on providers’ processes for supervising Limited Licensees and adhering to the parameters of the licence, and will begin consultations on how to conduct inspections of providers’ financial management practices. Licensees who are chosen for an inspection receive a notice that summarizes the process, expectations, and timelines. The CMRAO continues to develop informative guides and detailed checklists to give licensees an overview of the process and help them prepare.
Inspections programs such as this are common in regulated professions. The CMRAO conducts inspections to ensure that condominium managers and provider businesses are licensed and in compliance with the CMSA and its regulations. By strengthening and promoting professional standards, the CMRAO provides Ontario’s consumers with confidence that their assets are protected and well-managed.