Directors, managers and condo lawyers will spend at least the next year struggling through intricate implications arising with respect to the major amendments to the Condominium Act, 1998 (“the Act”) and its many new regulatory provisions flowing from the Protecting Condominium Owners Act, 2015. Managers have the obligation to refrain from rendering professional advice beyond their expertise. Provide advance notice and allow lawyers more time to respond. Budget for increased legal fees to enable your lawyer to properly analyze and respond to the new amendments to the Act, revised Ontario Regulation 48/01 and future regulations as may apply to your condo’s circumstances.
For instance, in addition to the increased number of various legal opinions your Corporation may request, consider asking for our list of 30 Condominium Document Packages. We can also customize any of the following projects to suit your condo:
1. Preliminary Notice of Meeting – Managers must now forward a Preliminary Notice of Meeting to all owners preferably 20 days before issuing the AGM notice package of documents. The AGM notice package must subsequently be forwarded to owners no sooner than 16 days after issuance of the Preliminary Notice of Meeting and mailed at least 15 days before the date of the meeting. In other words, start meeting preparations well before 35 days before the meeting date. The Preliminary Notice is a prescribed form [s. 12.2 of O.Reg. 48/01] which informs owners of the business to be conducted at the upcoming meeting. The Preliminary Notice must indicate that owners can suggest material to be added to the notice of meeting package; the board must only add such information if requisitioned by 15% or more of the owners who have signed a “Submission to Include Material in the Notice of Meeting” prescribed form.
If it is an election meeting, the Preliminary Notice must state the number of directors, the number of vacancies, the terms for replacement directors and any position to be filled by the owners of non-leased units [s. 29 (1) of the Act and s. 11.6 of O.Reg. 48/01]. A Director’s Disclosure Statement should be added to the Preliminary Notice, to allow a candidate’s name to be published as a notice candidate in the AGM package, if received on time.
2. Director’s Disclosure Statement – Now, each director candidate will need to sign a form of Director’s Disclosure Statement if the person wishes their name to be published as a notice candidate. A subsequent candidate must provide the same disclosure, orally or in writing, as late as the election meeting [s. 28, 45.1 & 51 of the Act and s. 11.6 (1) of O.Reg. 48/01]. Consider explaining and handing out Director’s Disclosure Statements to potential new candidates at the beginning of an election meeting to attempt to circumvent the time spent for the Chair to cross-examine, by oral disclosure questions and answers, any candidate who has not provided a signed written Statement.
The Director’s Disclosure Statement will disclose whether the candidate is an owner and/or an occupant, whether the unit’s common expenses have been in arrears for more than 60 days and whether the candidate has a material interest in a contract or transaction involving the Corporation, the declarant or an affiliated company, director or officer. The director must also disclose any legal proceedings involving the Corporation, the director and any occupant of the unit or family members as parties. The candidate must disclose any convictions for offences under the Act or its regulations during the past 10 years. The Director’s Disclosure Statement can spell out other criteria referred to in the Corporation’s new by-laws – such as required qualifications to become a director and required compliance with the Director’s Code of Ethics. Such disclosure is also required when revised circumstances arise during the period the person remains as a director. Any such disclosure does not in of itself disqualify the director, although a by-law disqualification provision or a requisition for removal of a director may accomplish that result.
3. New AGM Requirements – Your condo’s standard AGM package will need to be tweaked in several respects. Certain materials will have to be added to the prescribed form of Notice of Meeting set out in s. 12.8 of O.Reg. 48/01. Work with the Corporation’s lawyer to upgrade your AGM package of documents in the context of the new criteria set out in the amended Act and Regulations. Electronic notice can be given to owners who have provided the prescribed form to the Corporation, subject to the criteria set out in the board’s resolution. Other meeting and voting requirements will need to be adjusted. The manager should coordinate with the Chair and lawyer well in advance of the Preliminary Notice date.
The Chair of your AGM will also need to use a substantially-revised script for the meeting and explain new criteria applicable to directors’ qualifications, disclosure by directors, their new educational requirements and election of the special director to be separately-elected by the owners of non-leased units. Ask your condo lawyer to chair your next AGM to stick-handle through the new requirements.
4. Directors’ Training — Directors elected on or after November 1 must complete the prescribed 3.5-hour online training course within 6 months of their initial or next election or appointment as a director and each 7 years thereafter. There is no test for the multiple-choice questions; answers can be rectified until correct. Once completed, the director must provide evidence of completing the training, failing which the person ceases to be a director. Any expense for the training must be reimbursed by the Corporation within 30 days after receipt of the director’s invoice.