Common Errors with the Amendments: Part 3

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We posted previously about some common errors and misconceptions that we have run into since the Act was amended last year. We are still encountering issues regularly. Given the complexity of the regulations is it any wonder we are still encountering mistakes and misconceptions? Here are some of the most common issues we have encountered so far:
Myth: If a candidate makes a disclosure prior to her election or appointment she is automatically disqualified. For instance, if a candidates checks off the box that says “I am not an owner” the candidate cannot be on the board.

Truth: We hear this one quite often, even from other lawyers and managers with many years of experience.
The Act and regulations require candidates to make certain disclosures, but a candidate is not disqualified simply because she answered “yes” to one of the disclosure requirements. The disclosure requirements are described in sections 11.6 and 11.10 of O.Reg. 48/01.  Note: section 11.10 of O.Reg. 48/01 describes when the disclosure must be made (i.e. within 30 days of the election or appointment or when the director became aware of the situation).
There is an exception. Where the item being disclosed also relates to a qualification or disqualification according to the by-laws or to the Act a person may not be eligible to be elected or may be disqualified once elected. For instance, the Act disqualifies directors immediately if a lien has been registered against their unit and the owner does not discharge the lien within 90 days (see section 29(2)(d) of the Act). The director would be disqualified because of the arrears, not because they disclosed the arrears to owners. The same is true of requirements in a by-law. For instance, some by-laws prohibit non-owners from being on the board or prohibit owners from being a party to legal actions involving the condominium. Those candidates would also be disqualified (or not qualified depending on the language in the by-law) from the board. Again, the act of disclosure is not the reason for the disqualification. The person is disqualified because of the provisions of the by-law.
Common Error: Forgetting to put copies of the Act and regulations with the prescribed forms when required.
Example: The notice of meeting form includes the following note:
disc
Despite this note, I find that most notice of meeting packages that I review do not include copies of section 29(1) of the Act and s.11.6 of O.Reg. 48/01.  Copies of these sections can be found on CanLii or the Ontario government website:
Myth: Quorum for meetings is still 33 1/3% if an old by-law requires it.
Truth: The previous version of the Act included the following section:
quorum previous 50
This meant that by-laws created after May 5, 2001 could increase quorum to 33 1/3%.  Quorum was otherwise 25%. This section has been removed and replaced with:
amend 50
My interpretation of this new subsection (in combination with subsections 50(1) and (1.1)) is that the 33 1/3% requirement is no longer enforceable. If a condominium wants to increase quorum for third and subsequent attempts for certain meetings it can do so by passing a by-law after subsection 50(1.2) came into force (i.e. November 1, 2017). As a result, quorum for meetings of the owners is 25% in most cases, except for:
  1. first meeting after creation to elect directors prior to turn-over (s.42(6)) in which case quorum is owners of 25% of units not owned by the declarant; and
  2. third or subsequent attempts to hold turn-over meetings (s.43), annual general meetings (s.45(2)), or any owners meeting to elect a director or appoint an auditor (prescribed purposes in O.Reg 48/01), in which case quorum is 15% [unless a by-law has increased it to 25% in certain circumstances, which is unlikely].
Reminder – to count toward quorum an owner must be entitled to vote at the meeting (i.e. not in arrears for 30 days or more at the time of the meeting) and must be present in person or by proxy.
Rodrigue Escayola wrote an interesting post about another common misconception – avoiding the director training by appointing the person every six months after being disqualified for not completing the director training. You can read it here – http://condoadviser.ca/2018/11/loophole-around-mandatory-condo-director-training/condo-law-blog-Ontario For the record, we support his interpretation. Complete the training!
Stay tuned for more common misconceptions, errors and myths. If you have any that you would like to share with our other readers please let us know!