New Condominium Act
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Condominium Owners Act, Bill 106
Introduced to parliament on May 27th, Protecting Condominium Owners Act, Bill 106, was designed to increase consumer protection for owners and buyers and to provide improvements to how condominiums are managed. If passed Bill 106 will be the first major overhaul the Condominium Act in over 16 years.
Over the next few months I look forward to examining the specifics of many parts of the act and its implications to our customers and condominiums across the province. In the meantime some of the more obvious changes being proposed include;
1) Establishment of a Condominium Authority to provide a timely and low cost dispute resolution process possibly financed through a monthly per unit fee payable by all condominium corporation.
2) Training for condominium directors
3) Compulsory licensing systems for condominium managers and management firms.
4) Increased communications to owners and improved disclosure to purchasers regarding condominium living, operations and increased costs after closing.
5) Increased communications and revised administrative processes for owner in the areas of financial reporting, meetings, quorums, proxies and votes.
The effects of these proposals may likely result in increased monthly common element fees to all unit holders across the province. However, if the new condominium regulations are effective in heightening communications, disclosures and disputes to owners and potential owners those condominiums that have historically been diligent in managing their corporation’s affairs should likely experience higher future property values than comparative “disrupted” condominiums.
Review of the Proposed Condo Act
As part of our review of the proposed changes to the Condominium Act, this post will focus on how Bill 106 would affect the calling and holding of condos annual general meetings (“AGMs”).
If the Bill is adopted as drafted, the province of Ontario would require condominium corporations to provide its owners with an advance notice of the AGM. This advance notice would have to be sent out 35 days before the AGM. The advance notice would be followed by the “regular” 15-day notice.
Presently, condominium corporations do not have to give such an advance notices. All they have to do is give the owners a 15-day notice before the AGM. Without an advance notice however some owners felt that they were not given an opportunity to put their name forward for election in time to have their name included in the AGM package and on the proxies. This, some felt, gave an unfair advantage to current board members as they could either put their name on the ballot or put the name of directors they supported. Bill 106 proposes to fix that (perceived) problem and to level the playing field.
The concept of the advance notice is not new. In fact, many corporations already provide their owners with such advance notices, allowing all owners the chance to put their names in the hat at the same time.
Bill 106 also proposes important changes to the level of quorum required at AGMs. The standard quorum required for an AGM to proceed will be fixed at 25% of the owners. However, in the event quorum has not been reached on the first two attempts at holding the AGM, quorum would then be reduced to 15% on the third and on any subsequent attempts. While this quorum seems low, keep in mind that, under the present legislation, 15% of the owners are already sufficient to requisition a meeting of the owners. This reduced quorum would allow for corporations to hold their AGM even though they are unable to achieve a 25% quorum.
Bill 106 would also allow for electronic or telephonic voting at owners meetings. Such voting could be made with the assistance of technological means such as telephone calls, emails, faxes, automated touch-tone systems or computer systems.
The introduction of this kind of technology will also facilitate the holding of board meetings, allowing them to proceed by way of teleconferences (even without a by-law, as is presently required under the existing act) provided that all directors consent.
Gowling Lafleur Henderson LLP – Rodrigue Escayola