Ontario Condo Law Blog : Toronto Condominium Lawyer & Attorney : Gardiner Miller Arnold Law Firm : Ontario, Ottawa, Hamilton, Kitchener

Anyone involved with condominiums or condo-related associations likely attends a healthy number of meetings of various sorts. With each meeting comes a set of minutes to memorialize what transpired and was accomplished at the meeting. The minutes are customarily approved at a subsequent meeting.

At a recent meeting of one of my committees, I made a motion to approve the minutes of an earlier meeting.  A fellow committee member then asked whether it was proper for me to make that motion given that I was not present at that earlier meeting.

For the answer, we turn to the Frequently Asked Questions section at Parliamentary Procedure Online, which is the companion website to Robert's Rules Online.  FAQ #30 provides:

Q:  Can a member vote on or second a motion to approve the minutes of a meeting that he did not attend?

A:  Yes, absolutely! There is no requirement in Robert's Rules of Order that a member have first-hand knowledge of something before voting on minutes or other motions. In fact, a motion need not be made regarding the approval of the minutes. The chair says, "Are there any corrections to the minutes?" Members may offer corrections, and when there are no further corrections forthcoming, the chair says, "If there are no further corrections to the minutes, they stand approved as corrected... the next item of business is..." or if no corrections are offered, "If there are no corrections to the minutes, they stand approved as read... the next item of business is..." Note that there is no second involved in this process. For more information, refer to RONR (10th ed.), pp. 343-344.
 

Of course, this answer assumes that Robert's Rules are the accepted rules of the organization and there are no statutory or by-law provisions that apply or take precedence.

While it is not necessary to have attended the meeting at issue or even to have read the minutes before approving them, it certainly makes good sense to check that the draft minutes appear to be in order before approving them.

A hat tip to my observant friend and fellow committee member, John Damaren of Malvern Condominium Property Management, for posing the question and calling me out on my absenteeism!

Got any other questions about meeting procedures?  Send them in and we'll try our best to give a good answer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

While it is routine for money to flow from condominium corporations to their managers for payment of regular management fees, there are few valid reasons for other such transfers. It is, for instance, completely improper for a management firm to “borrow” its clients’ funds to finance its own operations or to “lend” funds to its other condo clients.

A recent Ontario Superior Court decision highlights precisely such a scenario and brings several important lessons for condominium directors.

In 2005, York Region Condominium Corporation No. 890 (better known as Pacific Mall in Markham) brought a lawsuit for damages against its property manager, RPS Resource Property Services Ltd. (“RPS”) and William Garland (“Garland”) who was RPS’s principal, for breach of fiduciary duty, breach of trust, conspiracy, fraud and breach of their obligations under the Condominium Act, 1998.

The condo also named Royal Bank of Canada (“RBC”) and sought damages for breach of contract, negligence and conversion.

The trial took place over several days in June 2010 and the ruling was released this month. The full decision is now reported here. We will reproduce some of the highlights here, but time-starved readers can skip to the bottom to see the important lessons.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Here is this months’ instalment of condo-related goodies from around the blogosphere.

Top 10 Issues for 2010 and Beyond…. – Here’s a list of issues that associations are going to face this year and in the near term, courtesy of the Community Association Considerations blog.

ROC Presidents Must Vote at Board Meetings – Florida law blogger Scott Gordon helps shatter the misconception that association presidents can’t vote and explains how Robert’s Rules of Order is often misinterpreted.

Elections in HOAs and Condos - Can the Board Endorse Candidates? – California condo law guru Beth Grimm tackles this issue head-on. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The following guest post is by Athena Mailloux, a fraud examiner at ZAP Consulting Limited. Athena shares some practical solutions to help condo directors keep their new years’ resolution to be vigilant against fraud.

*****

Whether you are a large business corporation or a sole proprietorship you can never be too cautious when it comes to protecting against fraud. Condominium corporations have no less of a responsibility in protecting against fraud than a publicly traded company. In fact, condo corporations are often relatively small, close-knit communities that may lack stringent internal controls and thus be more susceptible to fraud.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

A February 2009 decision of the Alberta Court of Queen’s Bench should be added to the list of notable condo cases for 2009. Check out Dykun v. Cravenbrook Condominium Corporation No. 032 1893.

After changing managers on December 1, 2007, the condominium’s board discovered that the previous manager had improperly withdrawn money from the reserve fund to pay operating expenses, leaving the corporation on the brink of insolvency.

Two months later, the board announced that it was levying a special assessment to raise the money necessary for the corporation to continue operating and to replenish the reserve fund.

• Email This
• Print
• Comments (4)
• Trackbacks
• Share Link

With autumn now underway, Annual General Meeting (“AGM”) season is upon us.  I'm often asked to chair my condominium clients’ AGMs and I look forward to meeting face-to-face with the boards, owners and managers I've worked with during the year, mostly by phone, email or letter.  

More than that, I especially enjoy being part of a meeting where members of a condominium with difficulties band together to overcome those problems and move forward as a more united community.  Those experiences are among the most personally rewarding in my line of work.

Aside from the social call, it's often useful for condos to ask their lawyer to be chair of the AGM because many directors are not comfortable with public speaking or may not know how to navigate the procedural pitfalls that may arise.   Further, having an objective person at the helm can diffuse much of the tension that typically arises and gives greater sense of confidence and fair play to everyone present, particularly if there is a hotly contested election or vote on an issue. 

Not everyone feels that way, however, and if this year is like every other year, I will probably be asked the following question at one or more of the meetings where I'm the chairperson:

“You’re the condo corporation’s lawyer and you’re paid from our common expenses, so don’t you act for us owners?”

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

Q: What percentage of unit owners is required to approve a modification of the maintenance and repair obligations contained in a condominium declaration?

A: 90%, as required by section 107(2)(d) of the Condominium Act, 1998.

Q: If two different proxy holders show up at an annual general meeting and they each hold a proxy from the same unit owner but the proxies were signed on different dates, which proxy is valid?

A: The most recent proxy is the valid one, often because most forms of proxy contain the words: “I (We) revoke all proxies previously given.”

Q: Is it correct that no board member can sit more than 2 - 3 year terms? What happens next? Do they take a year off and run again the following year?

A: The Condominium Act, 1998 contains no restrictions as to the number of terms a director can serve. Some corporations’ by-laws may contain term limits, in which case the by-law may specify any additional restrictions or procedures. Term limits are not a very good idea because it is often hard to find volunteers willing to spend the time and effort to serve on the Board.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

In December 2008, the Supreme Court of Canada released written reasons for its ruling in the landmark case of BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII).  This important case discusses directors' duties and the application of the oppression remedy in business corporation law. Because these business law concepts are applicable to condominium law, the Court’s decision in the BCE case contains important lessons for condominium directors.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Daniel Zimberoff at the Northwest Condo & HOA Law Blog makes the excellent suggestion that condo boards should set up discrete email accounts for key officers.   These accounts (example: ycc123treasurer@yahoo/gmail/rogers.ca) would pass from person to person that assumes the role.  

He gives a number of compelling reasons that merit your attention.    I would just add one more: 

#8 -- Most free email accounts provide plenty of storage space and offer search capability, allowing users to sort, store and retrieve important documents.   Directors can work remotely and have constant easy access to records and documents without the need to refer to a paper file.  

A further comment:   The concept of using discrete email accounts for the condo's officers makes tremendous sense, but its practicality and success depend on the goodwill of the officers using the accounts and the good sense of those that subsequently inherit the accounts.   Officers using the accounts must agree to surrender the email account at the end of their tenure.   The incoming officers must ensure that the email account is secure by changing the password and by disabling any mail-forwarding features set up by the previous account holder.    Such issues could probably be dealt with by simple amendment to the board's policies.

• Email This
• Print
• Comments
• Trackbacks
• Share Link