What did you get yourself into? Top ten tips for new directors

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I’m often asked to give advice to new directors, especially first time directors. It is a difficult question to answer because the advice depends on a number of factors, such as the experience level of the director, whether or not the condominium has a manager, and the age of the condominium. In hopes of reducing the anxiety of a few new directors, here are my top ten suggestions to newly elected directors:

1. Review the condominium documents – it is important for directors to review the declaration, by-laws and rules shortly after being elected. You are not expected to be an expert, but you need to have a basic understanding of the key provisions, such as repair and maintenance obligations, restrictions on the use of units, and shared facilities. Familiarity with the documents will make for more efficient board meetings and more informed decisions.

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Court rules (again) that condo can’t avoid mandatory arbitration

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There have been several cases in the last year or two that have been stayed (halted) because one of the parties ignored an obligation to arbitrate a dispute. Another decision was released this week. Given the number of cases as of late, it seems that a review of the basic principles might be useful. The most recent case includes a great review so we will summarize it here. Continue reading

Owner’s Challenge to Special Assessment

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A unit owner recently brought an application to the court for an order declaring a notice of sale issued by a condominium under a lien null and void. The owner was also the condominium’s declarant. The declarant did not turn over the condominium to the owners when required by the Act or contribute to the common expenses for the units it still owned. Sound familiar?

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AGM: Apathy, Gossip and Mutiny

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The AGM is often the most important meeting of the year for a condominium. The AGM provides the owners with valuable information about the condominium’s affairs with presentations from the auditor, board, management, and other professionals. It also gives owners an opportunity to voice their concerns or ask general questions about issues that might be important to them, like upcoming repair projects, parking, or landscaping. Finally, the AGM allows owners to be involved in important decisions, such as electing directors or passing a new by-law.

Most AGMs go off without a hitch and everyone goes home happy and informed. Some, however, are long and arduous battles that leave people more confused than when they started. The battles are often caused by apathy, gossip or mutiny. Continue reading

Are emails between directors a record of the condominium? The CAT says…

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Can owners request copies of emails between directors? Can the condominium refuse a record request because the owner’s reason for requesting the records is apparently unrelated to their ownership interests? Must the owner prove their reason is related to their ownership interest, or is the onus on the condominium to prove the reason is unrelated to the owner’s interests? These are only a few of the questions recently answered by the Condominium Authority Tribunal (CAT).

Kai Sin Yeung v. Metropolitan Toronto Condominium Coporation No. 1136 

An owner requested emails related to the renewal of a gas contract referenced in board meeting minutes. The owner wanted a penalty and costs of the hearing. The condominium claimed that the emails do not exist, but even if they existed the owner would not be entitled to them. Continue reading

Condos in Trouble

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We’ve all heard the horror stories of condominiums with no money in their reserve accounts and significant repair projects that need to be completed. Work orders may have been issued by the municipality because the buildings are falling apart and becoming a danger to the occupants. At best, there are allegations of mismanagement by previous boards. At worst, there are allegations of fraud and theft. Many of the owners have defaulted in their contributions toward the common expenses and the condominium is unable to pay its contractors, which results in lawsuits due to unpaid bills. The local real estate agents know of the issues and the market values of the units plummet.

When the board attempts to fix some of these problems, such as levying special assessments, they often receive a requisition to remove them. The new board quickly changes managers, rescinds the special assessment, and lowers monthly fees. A requisition is received to remove the new board shortly after they are elected. Factions form and every issue creates further division among the owners. The problems are ignored or pushed aside while the groups fight for control.

So, what can be done in these terrible situations? The Act contains a few options to help condominiums get out of trouble. Continue reading

Condo Stats – Toronto & Area

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Earlier this year I posted updated statistics for the Grand River and Golden Horseshoe areas. Today, I’m focusing on Toronto and surrounding areas, including York, Peel and Durham.

As of August 8, 2017, Toronto had 2602 condominium corporations. Today, that number has grown to 2714. The last one registered is a 12 floor building with 642 units (about 180 of which appear to be parking or storage units).

As of August 8, 2017, York had 1240 condominium corporations. Today, that number is 1406! The last condominium registered has 372 units.

Peel had 1021 condominium corporations on August 8, 2017. As of today, Peel has 1054 condominium corporations. The last one registered is a mammoth with 975 units over 5 floors (in several buildings).

Finally, as of August 8, 2017, Durham had 285 condominium corporations. While it has the fewest condominium corporations, Durham continues to have impressive growth. It now has 308 condominium corporations. The last registered has 224 units.

As said in previous posts,  the total number is not the number of active condominiums. Some condominiums have been terminated or amalgamated so the “real” numbers are less than those above. I understand the CAO is working on obtaining a list of the “real” number so hopefully it will be able to start releasing statistics to the public soon.

That’s it for now.  Share this post and let me know what area you want statistics for next!

Voting: All condo units are not created equal

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As discussed in a post earlier this week, there has been some confusion as of late over the phrase “units in a corporation”. Does that mean all units? Only voting units? Owner-occupied units? Residential units? Fortunately, there is a section of the regulations that interprets the phrase. Continue reading

The Controversiality of the Voting Threshold: Borrowing By-laws

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Earlier this week, we blogged about the considerations and processes involved when a condominium determines there is a need for borrowing from a lender, inclusive of the requirement for a borrowing by-law. In this post, we discuss a recent case related to the passage of borrowing by-laws, which has created some controversy within the condominium industry.

LaFramboise v. York Condominium Corp. No. 365, 2019 CarswellOnt 680, dealt with a motion brought by an appointed administrator on behalf of a condominium corporation, seeking direction from the court as to whether a borrowing by-law had been passed at an owners’ meeting. Although there was little information provided on the particular circumstances that led to this application, it appears that some unit owners may have questioned the validity of a borrowing by-law that was passed at an owners’ meeting, resulting in the motion for direction to be filed by the condominium corporation’s administrator.

Based upon an interpretation of sections 50 and 53 of the Condominium Act, 1998 (“Act”), the Court appears to suggest that so long as a majority of all unit owners within a condominium are present at an owners’ meeting called to consider a borrowing by-law, a borrowing by-law can be successfully passed with the support of a majority of all unit owners present at the meeting rather than a majority of all units within the corporation.

Respectfully, the conclusions drawn from the interpretation of the Act in this case are contrary to the Act; specifically, section 56(10) of the Act.

56(10) of the Act unambiguously states that a by-law is not effective until:

“(a) the owners of a majority of the units in the corporation, or such other number of owners that is prescribed, vote in favour of confirming it, with or without amendment…”

Unless a lower voting threshold is prescribed in the regulations, section 56(10) of the Act makes it clear that a majority of the units in the corporation must vote in favour of a proposed by-law in order for it to pass, rather than the majority of units present at the meeting.

An often overlooked section of the regulations provides additional support for our position. Section 1.1(1) states that a reference to the portion of units in a corporation in the Act or regulations shall be interpreted as a reference to a portion of: a) owner-occupied units; b) units that are not s.49(3) units (i.e. parking, storage, facilities or mechanical installations); or c) all units in the corporation if all units are s.49(3) units and clause (a) does not apply. Subsection (2) specifically states that subsection 1.1(1) applies to section 56(10)(a) of the Act. Accordingly, subsection 56(10) requires a majority of units in the corporation that are not s.49(3) units unless all of the units are those type of units.

As noted above, the regulations do outline various by-laws that can be passed by a majority of the units present at a meeting rather than a majority of all units in a corporation; however, you will note that a borrowing by-law is not one of the prescribed by-laws that may be passed with the support of a majority of units present at a meeting [see section 14(2) of O. Reg. 48/01].

Below you will find a chart prepared by our firm which summarizes the by-laws that can be passed by a majority of units present at a meeting, pursuant to the regulations:

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Based upon the clear language in section 56(10) of the Act and the regulations, we cannot agree that a by-law can be passed with the support of a majority of those units present at an owners’ meeting called for that purpose (unless the regulations specifically permit for a lower voting threshold). Rather, in order for a by-law to pass, a majority of all units within the corporation must vote in favour of it.

Accordingly, despite the existence of this case, it would be prudent for condominium corporations to continue to receive the support of a majority of all units within the corporation when attempting to pass a by-law, unless the regulations clearly prescribe a lower voting threshold for that type of by-law.