Democracy Requires Questions

Gerry Hyman has another article for the Toronto Star.  Let’s discuss some of the questions:

QUESTION:  A former board member intends to stand for election to the board at the next annual general meeting. She has shown herself to be confrontational and nitpick everyone and everything. Our excellent property manager has threatened to resign. Two excellent directors have threatened to step down if she is elected. If she is elected, can the board remove her?

ANSWER:  In most circumstances a board cannot remove a director elected by the unit owners.

A board may, however, pass a bylaw stating that compliance with certain stipulated standards of conduct is a qualification for a person continuing to serve as a director. The bylaw could state that a failure of a director to correct any non-compliance within a stipulated period of time following notice of the non-compliance from the board will enable a majority of the directors to pass a resolution removing the director from the board.

The bylaw should give the director the right to make representations to the board in opposition to the board’s intent to secure a vote for the director’s removal.

Well, first things first, any By-law requires approval of owners representing a majority of units in the condominium.  If the candidate gets elected, it sounds like it might be hard for the Board to get owner approval – especially if the owners figure out that the Board intends to use this to usurp their (the owners’) decisions.   Also, it is not good enough to say that the By-law ‘should’ give the director a chance to defend herself, but that the Board must give the director the right to a defense.  Anything else is akin to dictatorship.  Also, an independent third party should be making the decision.  The other Board members would not be impartial and potentially have an interest in making sure a director is found guilty in this type of situation. The forthcoming Condo Office could be empowered to be that independent third party.

I am a bit shocked that Mr. Hyman should even suggest that the Board should try to so deliberately disrespect the democratic rights of the owners to elect the directors they want to serve on the Board.  He seems to miss the obvious reason of why the Board seems so scared to have to take a second look at things.

However, this question demonstrates the need for a proper opposition in a condominium.  It sounds like the condominium needs someone to stand up and ask questions.  For example, if the property manager is ‘excellent’ then why should the manager be so scared of this potential director?  If he/she is doing an excellent job, then there is nothing to worry about!

If the Board really does not want this candidate elected, they should ask someone to run against her.  In a democracy, like Canada, this is how we handle things.  We hear what the different candidates have to say and vote for the one we think is best.  Of course, under the current Condominium Act, the Board has the advantage as the incumbent directors normally collects enough proxies to remain in office.  Although, as we will discuss below in this post, all candidates can collect proxies.  But the owners, not the Board, should be determining who gets elected to the Board.  If incumbent directors do not like this, then they need to  listen to what the owners have to say – and sometimes they need someone on the Board willing to ask the hard questions!

Another question posed was:

QUESTION:  I intend to seek election again as a director on our condo’s board. Am I entitled to campaign door-to-door, and collect proxy instruments naming me proxy for those owners who do not intend to attend the annual general meeting? There is no such prohibition in our declaration.

ANSWER:  In the absence of a declaration or rule restriction, there is presently nothing in the Condominium Act that prevents you from campaigning door-to-door and collecting proxies.

Of course a candidate is free to campaign.  Anything less than this is undemocratic.  And even with a restriction in the declaration or the rules, I’d ask the Board how they manage to collect proxies without canvassing the owners?  But as discussed above, candidates are free to collect proxies.

However, this question also demonstrates one of the issues I have with the Condominium Act.  The Act needs to restrict the number of proxies that the residents of a unit can collect.  Right now, there is currently no limit.  This is an issue for which the Board normally uses to their advantage.  However, it can also see any small group of people controlling a vote.  Not only is this not fair, it is undemocratic.  The people who take the time to make an informed decision, and to take the time to attend meetings, should be the ones ultimately making the decisions.

In order to fix how elections are held in condominiums, I recommend that condominiums hold an ‘All Candidates’ Meet and Greet’ prior to the annual general meeting.  This allows the owners an opportunity to talk to the candidates before the AGM.  Owners can come down and have coffee and cookies and talk with the candidates.  This also provides for a social evening for the owners.   Candidates should also be prepared to make a short speech and possibly answer questions at the AGM prior to the vote.  An informed ownership makes wise decisions!

Another question raised was:

QUESTION:  I am a director and have recently discovered that our property manager did not advise the board of owners’ complaints about noise caused by another director. The property manager states that he could not advise the board because of privacy laws. Is he correct?

ANSWER:  No. Informing the board of noise complaints by unit owners would certainly be an obligation of the manager under his management contract. I am unaware of any privacy laws that would prevent the manager from fulfilling his reasonable management responsibilities.

Of course the property manager is not doing his job by passing along the complaints to the Board.  The responsibility to make decisions rests with the Board, not the property manager.  This is totally unacceptable.  The Board should consider whether it is time to find a new property manager – this is one issue the Board knows of, but how many times has the property manager held back information like this before.

Lastly, I would like to discuss this question:

QUESTION:  Our common expense contributions have risen 8.5 per cent to cover new hallway carpeting and wallpaper, replaced on the advice of an engineer. Did the board have the authority to proceed without a vote of the owners?

ANSWER:  If the board, perhaps assisted by the advice of an engineer, determined that the carpeting and wallpaper had deteriorated to such an extent that replacement was necessary, it was obligated to proceed without advising the owners or seeking a vote.

On the other hand, if the replacement was not necessary but the board wished to upgrade or improve the hallways, it could not do so without complying with section 97 of the Condominium Act. Section 97 includes a requirement that the owners be advised that the board will hold an owners’ meeting to vote on the work upon receiving a requisition for such a vote from owners of at least 15 per cent of the units.

Again, this is where the Condominium Act needs to be fixed.  Prior to any reserve fund work like this, a meeting of owners must be held to discuss the work.  Currently, this is not a requirement.  As Mr. Hyman pointed out, we don’t know whether the work needs to be done or if it is just an upgrade.  Although, in a case like this, the Board should be required to provide two to three designs for the owners to vote on.  As this is cosmetic work, the owners should have a say in how their condominium will look – the Board would still be doing its job in maintaining the condominium and will be selecting who does the work, but the owners get some input.  And what’s wrong with that?  Nothing at all!  That’s democracy after all!

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