6 Rules Registered Property Management Companies Must Follow to Remain Compliant with the Ontario Condo Act

Before recent changes to the Ontario Condominium Act, there were no legal requirements governing the conduct of property management companies in Ontario. But incidents of fraud and mismanagement against property owners were a growing concern over the decades, and with the explosive growth of new condominium developments in the province – with 61,337 units under construction in the suburban and downtown Toronto alone –  the consensus was that the lack of legal oversight had to end.

Today, condominium property managers are now required to comply with strict licensing and conduct requirements established under the Condominium Management Services Act with oversight undertaken by the Condominium Management Regulatory Authority of Ontario (CMRAO).

CMRAO ensures management teams comply with these regulations through a complaints process as well as a Code of Ethics for handling complaints. Finally, the CMRAO maintains a list of proposed actions against property managers who fail to remain compliant with these regulations.

So how should condo residential property managers ensure that they remain compliant with all of these new requirements? While there are multiple silos of regulations to pay attention to, following the following list will make sure that you don’t jeopardize your status.

How Property Management Services Professionals Can Ensure They Remain Compliant With Ontario Condo Legislation

The following compliance standards fall under the obligations and requirements section of the Condominium Management Services Act. Condo property managers providing residential condo real estate professional services in the province must ensure that these rules are followed to maintain compliance.

1. Word Contracts Carefully

The Act requires a written contract for property management services be entered into with clients. This agreement must outline the services to be provided, and the property manager is prohibited from providing any services not specified in the contract.

So during the process of entering into a business arrangement with a new client, it’s essential that property management firms are careful to specify the exact services to be offered in exchange for payment. Otherwise, you’ll quickly find yourself the subject of a complaint before the CMRAO.

2. Avoid Conflicts of Interest

Avoiding conflicts of interest isn’t just a best practice: it’s another legislated mandate. Property managers have two key areas where they have to be particularly careful to avoid a conflict: during the contract negotiation process, and during board meetings where they have a personal interest.

During the contract negotiation process, property managers are required by the legislation to disclose any material interest they may have in the contract. If this provision isn’t followed, you can find yourself liable for professional misconduct penalties as well as legal problems.

Second, in the interests of transparency, the licensee must be careful to avoid conflicts related to condo board meetings. Specifically:

  1) The property manager must not be present at any condo board meeting where their services contract is being discussed.

  2) The property manager or anyone acting on their behalf must not solicit or influence in any way the appointment of a proxy for a meeting which directly involves the property manager or directly relates to the removal or election of directors of the client.

While this is mostly common sense, property managers have to ensure that they follow all rules of transparency at all times to avoid compliance issues.


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3. Provide Proper Supervision of Employees Holding Limited Licences

As a registered property management company, in addition to having a valid Condominium Management Provider Licence, you are required to ensure that your employees follow and maintain their licensing requirements. For more experienced professionals with a higher licensing category, this usually means that they simply have to ensure they carry these documents at all times.

However, when it comes to employees holding a Limited License, you have an obligation to make sure they are properly supervised during the course of their duties. Since these individuals can’t provide property management services on their own, the responsibility to make sure the following conditions are followed will fall upon the company:

  • The limited licensee must be supervised by someone holding a General Licence or a Transitional General Licence
  • They can’t enter into any contract or agreement, manage/disburse more than $500 in client or reserve funds without the approval of a Supervising Licensee
  • They can’t sign status certificates

4. Follow Required Record Keeping Practices

The Act has strict rules regarding how records must be kept and stored. Documentation about the following activities must be kept by property management companies for at least six years:

  • Service and/or employment or engagement contracts with condo corporations
  • Supervision records for employees holding limited licenses
  • Client activity records
  • Documentation of required disclosures to clients
  • Employment records for condo property managers
  • Delegations to a condo manager to hold or collect money on behalf of a condo corporation
  • Any other records as required by the Act

5. Ensure Your Information is Current

All registered property management companies have an obligation to ensure that their profiles that are on file with the CMRAO are kept current and up to date. If any relevant information does change, ensure that you notify the Registrar of the changes within five days.

As well, each director or officer of a property management corporation must provide information pertaining to good character and financial responsibility. Any documented instances of bankruptcies, unpaid judgements, employment terminations, license sanctions, investigations, or charges have to be reported.

6. Ensure Accurate Disclosure

Lastly, it goes without saying that all of your professional activities must be conducted in good faith. Always ensure that all information and disclosures are made with complete accuracy and veracity.

The Act specifically prohibits the falsification of information by licensees that are related to the provision of condo management services. In addition, no property manager or company may knowingly counsel anyone else to contravene the Act. Failing to comply with this point may result in severe penalties in addition to potential loss of authority to provide property management services.

ICC Property Management is the award-winning property-management company of choice for condo owners throughout the Greater Toronto Area. Our licensed and certified management team has extensive experience with all aspects of condo management in Ontario, and they’re ready to help you get the most out of your property. Request a free management proposal and get started today!

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