When Alvin Rosenberg was asked to comment on the proposed Condominium Act before it came into existence in 1967, little did he know the act would so dramatically affect the Ontario housing market over the next four decades.
“I thought it would be a useful tool in real estate … I never dreamed it would become as predominant as it has,” says Rosenberg, then a lawyer who later became a Supreme Court judge.
Rosenberg is the author of Condominium in Canada, a legal text which was the first on the subject in this country, and the founder/president of the Canadian Condominium Institute.
One of the big advantages for builders, says Rosenberg, was being able to make more money by selling the units individually as private homes, rather than selling the project as a whole. And previously, while people could own semis and row houses as freehold homes, sales of units as private homes in multi-storey buildings had not been allowed.
While there had been a form of shared multi-unit ownership – the housing co-operative – Rosenberg says condominiums offered an advantage in that each resident had his or her own mortgage.
In a co-operative, one large mortgage is collectively shared by all residents, so if some fail to make their payments, the other residents have to make up the difference or the entire project can go into default and individual units can’t be protected.
“And the Condo Act really opened up a lot of possibilities because it expanded the potential of developments because it was so flexible,” says Rosenberg.
For instance, it has permitted residences to be built over retail stores or built over subway stations and for cottage country and ski hill condos, not to mention later variations such as common element, leasehold and vacant land condominiums.
“I think the quality of condominiums has really improved over the years, too,” says Rosenberg, who now works as a mediator and arbitrator with ADR Chambers, an alternate dispute resolution group. “It may be partly because there used to be a lot of lawsuits. Builders soon learned they had to develop a better quality product.”
He says one of the most significant changes to the Condo Act since its implementation is the requirement that condominiums maintain adequate reserve funds to cover maintenance and repairs.