Why Condominiums are Undemocratic

At the moment, condominiums in Ontario are not democratically run.  The current Condominium Act allows a Board of Directors a virtual dictatorship over the operation of a condominium.

You might be sitting there saying that this is not possible in a democratic country like Canada, but this is the case.  Let’s just look at how this is the case:

1)  The Condominium Act (‘The Act’) currently gives the Board of Directors (‘The Board’) overall power to run the condominium under Section 27(1).  This section clearly states: “A board of directors shall manage the affairs of the corporation.”  The owners have no right, other then trying to remove directors, to overturn a Board decision, although all the owners pay for any costs incurred.

2)  The Board has unlimited access to the list of owners.  This means that the Board knows the contact information for every owner and can contact them for their proxies prior to a meeting.  And there is no limit as to how many proxies an individual (or a group) may possess for a meeting, which means the Board will collect as many proxies as possible to make sure their Agenda is promoted at owners’ meetings, as well as making sure that their candidates (i.e. themselves or their ‘good buddies’) are elected/re-elected.

3)  There are no term limits in a Condominium.  That means some directors can, and do, continue to run for re-election for decades!

4)  While the Act allows the Board to set both the Fiscal Year (the 365 day period used for accounting purposes) and the AGM.  While the Act states that the AGM will take place “within six months of the end of each fiscal year of the corporation” (Section 45(1)), the Board is free to choose the date, time, and location of the meeting.  So there can use the demographics of the owners to their advantage.  For example, should a large number of owners have children, the Board may want to hold the AGM during the summer when the owners are most likely to be travelling with their children.  If a large number of owners are snowbirds, then January, February, or March, would be the best time to hold the meeting.  Anything to get more proxies, and less ‘in person’ attendance.

5)  Difficult to remove.  While a director can be removed from office, this is difficult.  It requires at least 15% of the owners to ‘requisition’ (petition) the Board to hold a meeting – or to add the issue to the next AGM – before removal can even be discussed.  Then Section 33(1) of the Act requires more than half of all the units, not a majority of votes cast.  With some strategic planning, the Board can make sure that less than half the units are represented at the meeting, or have enough proxies that there will never be enough votes to pass the motion to remove the director(s) from office.  And remember, because the threshold is the entire condominium, any unit not represented (either in person or by proxy) is essentially a no vote – a win for the Board.

6)  It is difficult to enforce rights, or to keep the Board accountable.  Owners can go through Mediation, Arbitration, and (if necessary) the Courts.  However, unless they are trained in the legal field, this can be daunting without a lawyer – which means that cost factors into this.  Owners may not have the money to afford to pay a lawyer to help them enforce the Act, Declaration, By-laws, and Rules.  The Board will use the Condominium’s lawyer, paid for by the owners, to defend themselves.  And if there are other costs incurred, the Board can make the individual owner pay under section

As you can see, the Board, not the owners, have virtual 100% control over the operation of the condominium.  This needs to change.  It it totally undemocratic.  In my next post, I will discuss how to make condominiums democratic.

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