The NEW PROCESS for Owners’ Meetings

meetingThe first phase of amendments to the Condominium Act, 1998, came into force on November 1, 2017. While the first phase included amendments to a variety of areas, there were a few areas with significant changes. One of the most significant changes will be to the way we call and hold owners’ meetings.

While much has been written about the new AGM process, it is important to note that the changes to the Act apply to all owners’ meetings (i.e. AGMs, requisition meetings, special meetings) in most circumstances.  The transitional provisions are not entirely clear so if you intend to call and/or hold a meeting of owners between November 1st, 2017 and December 10th, 2017, you should speak with a lawyer to see which provisions apply to your meeting.  Continue reading

Draft Reg#2 – Part 3

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The draft regulations also address issues like notices of meeting, voting, quorum, board meetings by electronic means, and voting thresholds for by-laws.

Notices of Meetings

The regulations set out the detail for the preliminary notice that must be sent to owners before an owners’ meeting. It details the type of information about candidates for director positions, candidates for auditors, and other material that owners want to be included (so long as 15% of the owners request it and it is not contrary to the Act or regulations). The preliminary notice will be a standardized form.

One thorny issue will continue to be requisition meetings. Since the amendments to the requisition process will not be included in the first phase of amendments, but the changes to the notice of meeting sections will be, it means that the board only has 5 days to send a preliminary notice of meeting after it receives the requisition. For example, if the requisition is received on January 10, the preliminary notice must be sent by January 14, the notice of meeting by January 29, and the meeting held on February 13. There would be no margin for error in sending out the notices or the meeting would be held beyond the period required by the Act (35 days from the receipt of the requisition).

It is intended that the regulations would come into force on July 1, 2017, but they would only apply to meetings held 40 days or more after the regulations come into force and for those where notice has not been sent.

Voting & Quorum

As you may know, quorum for meetings will be changed by the amendments to the Act. Quorum for owners meetings will be satisfied by: 1) 25% of the owners represented at the first and second attempts to hold the meeting; or 2) 15% of owners at subsequent attempts.

The regulations also require every condominium to have a standard provision in its by-law that no person voting by ballot, proxy, or electronic means, would be required to identify his name or the unit in which the vote is cast. There will be mandatory proxy forms for owners’ meetings instead of the optional forms used now.

In addition, there will be a lower threshold for voting for certain by-laws (i.e. to change the content for information certificates and notices, to add extra disclosure obligations for directors). Instead of a majority of all owners, the threshold would be lower: a majority of votes cast at the meeting.

These changes should be in force on July 1, 2017, but it would only apply to meetings held 40 days or more after the new quorum and voting sections of the Act come into force.

Reg#2 Released for Comment

feedbackAs you probably know by now, the government intends to release draft regulations to go along with the amendments to the Act. The purpose of releasing the draft regulations is to allow for public comment. The first draft regulation, which was released in December, addressed the mandatory licensing of managers.For the first draft regulation, the deadline for comments has passed.

The second draft regulation, which was released this week, is aimed at common condominium issues: communications from condominiums to owners and mortgagees; mandatory disclosures and training for directors; meetings and voting; and record retention and access to records. The government posted the full draft regulation and a reader-friendly version on its website. The deadline for public comments for the second draft regulation is March 30th, 2017. In the next few posts, I’ll describe some of the key features of the second draft regulation.

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Declarant ousts board using majority ownership.

The Superior Court of Justice recently heard what appears to be the first reported decision under section 152(6) of the Condominium Act, 1998. Section 152(6) permits a declarant of a phased condominium to request a meeting of owners so it may elect a new board where it owns a majority of the units as a result of the registration of amendments to the declaration and description creating a phase.

In Middlesex Standard Condominium Corporation No. 643 v. Prosperity Homes Limited [2014] ONSC 1193 the declarant brought a motion for an order requiring the condominium to call a meeting of owners so it could elect a new board. The condominium refused the declarant’s request arguing that the declarant was out of time to make the request as he became the majority owner over 2 years prior and was aware of his right to request the meeting since the beginning. The condominium also claimed it was further oppressive conduct as the declarant admitted that it wanted the meeting so it could elect a new board that would discontinue another action (where the condominium claimed damages from the declarant for construction deficiencies in the amount of $750,000.00). The court found that it was not further oppressive conduct or otherwise limited at law and ordered the condominium to call the meeting. Continue reading

Challenges by owners to the chair, proxies, and voting

Davis v. Peel Condominium Corporation No. 22 [2013] O.J. No. 2594 is a recent decision of the Superior Court of Justice about owners’ meetings, especially voting rights and the role of the chair. It was an application by an owner alleging the chair of the meeting improperly allowed 12 proxies to be used to remove the board of directors. Without the 12 votes, the requisition to remove the directors would have failed.

The Court dismissed the application. Continue reading