Condo Reform #4 – Governance: Records and Meetings

Condominium communities are small democracies with their own set of unique challenges. Like many democracies, the board of directors is often criticized by the owners for the decisions made, or not made, but are rarely praised for their hard work. Given the wide range of values, interests, and characteristics of condominium inhabitants, it not surprising that governance issues account for a large proportion of the disputes that arise in condominiums.

Given the importance of proper governance to the financial health and stability of condominiums, the working group made several recommendations to improve the governance of condominiums. The recommendations were in five key areas:

  1. Access to Records & Information
  2. Meetings
  3. Directors and Officers
  4. Fines
  5. Owners’ & Directors’ Rights & Responsibilities.

This post will summarize the first two areas; the remaining three will be summarized in a later post.

Access to Records & Information

The group suggested that the Act should be amended to:

  1. set clear requirements for record retention, such as a minimum length of time for retention and the retention of records in electronic format;
  2. provide easy access to records by standardizing the process, prescribing forms, and requiring certain records to be provided free of charge; and,
  3. protect privacy and promote the proper use of records.

Meetings

The group also made recommendations to improve owners’ meetings in seven key areas:

  1. standardizing proxies forms to prevent abuse;
  2. permitting a condominium to continue with a third owners’ meeting without quorum if two previous meetings could not proceed because there was not quorum;
  3. refining the requisition process to create a standard form and to require the board to accept or refuse it within 10 days;
  4. lowering the threshold for passing by-laws;
  5. increasing communication between the board and owners by requiring certain information to be provided quarterly;
  6. mandating a directors’ call notice be sent at least 35 days before an owners’ meeting and a call for agenda items from owners; and,
  7. promoting the use of technology for board meetings.

The recommendations, if implemented, should alleviate many of the concerns of owners regarding adequate access to records and the conduct of owners’ meetings. In my opinion, the recommendations that could make the most significant impact on the industry are standardizing the record request process and proxy forms, refining the requisition process, and lowering the threshold for quorum and the passage of by-laws. It appears that the standardization of processes is a common theme within the recommendations. If done properly, it could improve certainty, reduce conflict, and decrease costs.

It will be interesting to see how many of the recommendations made in the report make it into the draft legislation. I understand the draft legislation may be ready for reveal in the Spring or Summer of 2014.

Up next week #4 – Governance: Directors & Officers, Fines and Rights and Responsibilities.