Understanding Sections 97 and 98 of the Condominium Act: Why Condominium Alteration Agreements Matter

Protecting Owners, Preserving Property Values, and Ensuring Accountability

One of the most common questions condominium owners ask is, "Why do I need the Board's approval to make changes to my own unit?"

The answer lies within the unique nature of condominium ownership. Unlike a detached home, a condominium is a shared community where individual ownership rights coexist with collective ownership of common elements and building infrastructure. Changes made by one owner can have lasting impacts on neighbouring units, building systems, maintenance obligations, insurance coverage, and even future property values.

To address these concerns, Ontario's Condominium Act, 1998 contains provisions that govern alterations to units and common elements. Two of the most important sections are Section 98 and Section 97. While these provisions are frequently referenced by condominium boards, managers, and legal counsel, many owners are unfamiliar with their purpose and how they are applied in practice.

Understanding these sections helps explain why condominium corporations require renovation applications, alteration agreements, engineering reviews, and legal documentation before certain projects can proceed.

Why These Provisions Exist

At its core, the Condominium Act seeks to balance two competing interests:

1. An owner's right to enjoy and improve their property.

2. The corporation's obligation to protect the building and the collective interests of all owners.

   
   

Without safeguards, one owner's alteration could create maintenance problems, structural concerns, safety issues, or financial liabilities that eventually become the responsibility of the entire condominium community.

Sections 97 and 98 provide a framework that allows improvements to proceed while ensuring risks are properly assessed and responsibilities are clearly assigned.

Understanding Section 98 Agreements

Section 98 generally applies when an owner wishes to alter, add to, or improve part of the common elements for their exclusive benefit.

Common examples include:

• Installing hard surface flooring where approval is required

• Enlarging balconies or terraces

• Installing electric vehicle charging stations

• Adding exterior lighting

• Installing satellite dishes

• Modifying common element patios or landscaped areas

• Altering windows, doors, or exterior components

• Installing air conditioning equipment on common elements

• Modifying plumbing, electrical, or mechanical systems located within common elements

  
  

Although these improvements may primarily benefit a single owner, they often involve property that belongs to the condominium corporation.

Because future boards and managers may not be aware of these modifications years later, the Condominium Act requires responsibilities to be formally documented.

What Is a Section 98 Agreement?

A Section 98 Agreement is a legally binding agreement between the condominium corporation and the owner.

The agreement typically outlines:

• The approved alteration

• Construction requirements

• Maintenance obligations

• Repair responsibilities

• Insurance requirements

• Indemnification provisions

• Future replacement obligations

• Access rights for inspection and repair

• Responsibility for damage caused by the alteration

  
  

Most importantly, the agreement is typically registered on title to the unit.

This ensures that future purchasers inherit the obligations associated with the alteration. Without registration, a future owner could argue they were unaware of the modification and refuse responsibility for maintaining or repairing it.

In simple terms, the agreement ensures that the owner who benefits from the alteration—and future owners of the unit—remain responsible for it rather than shifting those costs onto the condominium community.

Understanding Section 97

While Section 98 focuses primarily on owner-specific alterations involving common elements, Section 97 addresses changes made to the common elements themselves by the condominium corporation.

Section 97 applies when the corporation proposes an addition, alteration, improvement, or substantial change to common elements.

Examples may include:

• Major landscaping projects

• New recreational amenities

• Building additions

• Significant parking modifications

• New security infrastructure

• Major architectural enhancements

• Redevelopment of underutilized common areas

  
  

The purpose of Section 97 is to ensure owners have a voice when substantial changes are proposed that could affect the appearance, function, or financial obligations of the community.

Depending on the nature and cost of the project, the Act may require notice to owners and, in some circumstances, owner approval through a vote.

The greater the impact on owners or the corporation's finances, the greater the level of owner involvement required before the project can proceed.

How Boards Determine Which Section Applies

One of the most common misconceptions is that every renovation automatically requires a Section 98 Agreement.

In reality, boards and management evaluate each proposal individually.

Questions typically considered include:

• Does the alteration involve common elements?

• Will building systems be affected?

• Does the change create ongoing maintenance obligations?

• Could future repairs become the corporation's responsibility?

• Does the modification alter the appearance of the building?

• Could the alteration impact neighbouring units?

• Is registration on title necessary to protect future owners and the corporation?

  
  

Simple cosmetic renovations within a unit may require only management approval and compliance with renovation guidelines.

More significant projects involving common elements or shared infrastructure often require a Section 98 Agreement.

Large-scale projects initiated by the corporation itself may trigger Section 97 considerations.

The Role of the Board of Directors

Boards are not tasked with preventing reasonable improvements. Their responsibility is to ensure alterations are completed safely, properly documented, and consistent with the condominium's governing documents.

When reviewing an alteration request, directors must consider:

• Building safety

• Long-term maintenance implications

• Insurance exposure

• Engineering requirements

• Legal obligations

• Fairness to other owners

• Future operational impacts

  
  

The Board's duty is not to determine whether they personally like a project. Rather, they must determine whether the proposal is appropriate for the condominium and whether adequate protections are in place.

The Role of Property Management

Property managers serve as administrators and advisors throughout the process.

Management typically:

• Reviews renovation applications

• Confirms compliance with governing documents

• Obtains supporting documentation

• Coordinates engineering reviews where necessary

• Obtains legal opinions when appropriate

• Facilitates Board review and approval

• Coordinates preparation of Section 98 Agreements

• Tracks registration on title

• Maintains corporate records relating to alterations

  
  

An experienced management team helps ensure alterations are processed consistently, efficiently, and in accordance with the Condominium Act.

Why These Requirements Ultimately Benefit Owners

Although renovation approvals and legal agreements can sometimes feel cumbersome, they exist for a good reason.

Without proper oversight, modifications could create structural concerns, water penetration issues, electrical hazards, maintenance disputes, insurance complications, and unexpected costs that affect the entire condominium community.

Sections 97 and 98 help ensure improvements are properly reviewed, responsibilities are clearly assigned, and future owners understand the obligations associated with previous alterations.

In many ways, these provisions protect both the individual owner making the improvement and the condominium corporation as a whole.

The Bottom Line

Condominium ownership differs from owning a detached home because every owner's decisions can affect a shared community and a shared asset.

Sections 97 and 98 of Ontario's Condominium Act, 1998 provide the legal framework that allows improvements to proceed while protecting the corporation, neighbouring owners, and future purchasers.

Through proper review, documentation, and registration where required, condominium boards and management companies can ensure alterations are completed responsibly and that the costs and obligations associated with those alterations remain where they belong.

Far from being unnecessary bureaucracy, these provisions are an important tool for preserving property values, protecting owners, and maintaining the long-term integrity of the condominium community.