Condominium Could Amend the By-laws

Gerry Hyman as another article for the Toronto Star.  Let’s discuss a couple of questions that were brought up:

QUESTION:  Our board recently discovered that owners have been electing five directors when the bylaws allowed for three. A lawyer’s letter has been received advising that the two directors elected at the last annual general meeting were not actually elected due to the three-director limit. Is that correct? Do we have a legally constituted board?

ANSWER:  The Condominium Act requires the owners to elect the board “in accordance with this act and the bylaws.” The two additional directors were not elected in accordance with the bylaws and their election was not valid.

If the corporation has three directors previously validly elected, the three-director board is legally constituted.

I agree with the response, with one correction:  most By-laws for corporations will allow for the staggering of director positions.  As such, with only three directors, one director would be elected each year.  If there were five directors then two directors would be elected in each of two years, with one single director position in the third year.  That’s what sounds like what occurs in this condominium as only two directors were elected.  As such, I would not necessarily believe that both directors are disqualified as one of the directors who were elected at a previous annual meeting would be disqualified (during the year when two directors were elected.)

However, to fix the issue, it would be wise to amend the By-laws to allow for  five directors, with one or two directors being elected to a three year term at each annual meeting.

Another question raised was:

QUESTION:  Our corporation has a beautiful common-element tennis court. The board has refused to put up the wind screens which were placed in storage over the winter, apparently in order to save the cost of installing them. What can we do?

ANSWER:  The wind screens are part of the tennis court and the reinstalling them for the tennis season is maintenance of the court — that is the obligation of the corporation.

An owner may make an application to court pursuant to section 134 of the Condominium Act requesting an order that the corporation carry out its common element maintenance obligations. The court may also be asked for an order that the corporation reimburse the owner-applicant for the owner’s legal costs for the application.

A warning to the board of the intention to make the court application may produce the desired result.

Of course, this is where the soon to be implemented Condo Office will be a great help.  An owner should not have to go to great expense in order to force the Board to do something it is supposed to be doing.  And in this condominium, the Board is most likely aware of this and knows that it can get away with it.  Even if threatened to have this issue taken to court, until an owner actually goes to the time and expense of filing an application with the courts, the Board knows it can simply refuse to do anything.

With the Condo Office, and if it is implemented correctly, an owner in this case should be easily able file a complaint with the Condo Office and then the Condo Office can simply direct the Board to take appropriate action.

A final question that I wish to discuss is this:

QUESTION:  A petition signed by more that 15 per cent of the owners at our condominium called for an owners’ meeting to discuss an issue of concern. The president responded by stating: “You are not getting your meeting.” Owners are gathering signatures on a further petition to remove directors but we are afraid that the same response will be received. What can we do if that happens?

ANSWER:  The Condominium Act requires the board to call and hold the requested owners’ meeting within 35 days of receipt of the requisition. If the board doesn’t do so, one of those who requested the meeting may call for it to be held within 45 days.

Should the board attempt to block the calling of the meeting by a requisitionist — perhaps by refusing to make available an owners’ list to facilitate the giving of notice — the requisitionist could make a court application for a compliance order.

Of course, technically this was a requisition, not a petition. But, the President is wrong to do this.  The Board should have done the following:

  1. Send the requisition to the condo’s lawyer to ensure the requirements of the Condominium Act (basically indicating what is to be discussed/voted upon at the meeting, and that 15% of the owners actually signed the document.)
  2. If valid (most likely) then the Board should call a special Board meeting in order to set a date for a special meeting.
  3. Hold a Special Meetings of owners to deal with the issue.

Of course, at this stage, the issue is now the vote to remove the directors.  This will take a majority vote of all the owners (i.e. more than half the owners, 51 owners in a 100 unit condominium, or 76 owners in a 150 unit condominium.)  This is one area that could have been fixed with the recent changes to the Condominium Act – directors do not require a majority of owners to elect them, and can be elected by acclamation (in other words elected without a vote because no one ran against them.)  The requirement for removal of directors should be reduced to a vote of 2/3 majority of votes cast.  And no individual should ever, in under any situation, be allowed to hold more than two proxies.  The problem with the current situation is that anyone who does not vote is effectively voting to allow the Board members remain in their position, and the Board will use proxies to help gather no votes, in order to have sufficient ‘support’ to remain in office.  Not exactly, democratic, especially if the owners who are actually interested in the condominium’s operations are not the ones making the final decision!

But, just like with the previous question, why should an owner have to potentially go to court to get the Owners’ List in order to call a meeting?  The Condo Office should be able to handle this.  Also, under the current rules, the owner going to court could receive $500 from the corporation if the court agrees with the owner’s application (which is likely in this case.)  However, why should the owners (by virtue of the only people providing the corporation with money) pay for a potential mistake by the Board?  The $500 ‘fine’ should be charged back to the directors who voted to refuse to provide the Owners’ List (any director who supported the release of the documents would be exempt from the ‘fine.)  That would stop directors from voting against handing out records that owners are entitled to see or receive a copy of simply because they (the Board) knows that owners are unlikely to go to court and that any ‘fine’ is not applied against them directly.

If directors were made personally responsible for their decisions; through easier rules for the removal of directors, cost effective ways for owners to enforce their rights, and potential fines against directors who make poor decisions – one would find that directors would be more likely to listen to the owners in their condominium, the people they both represent and work for!

Advertisements
This entry was posted in Condominiums and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s