Condominium Must Hold Annual Meeting

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

QUESTION:  Two of our three board members own six units in our 13-unit condominium and have a proxy from another owner. But the board does not adhere to the Condominium Act and refuses to call the annual owners’ meeting. A vote to remove the directors would obviously fail. Is there anything we can do?

ANSWER: The Condominium Act permits an owner to apply to the Ontario Court for an order appointing an administrator if 120 days have passed since the turn-over meeting.

The court may make the order if it is of the opinion that it would be just or convenient having regard to the scheme and intent of the Act, and also is in the best interest of the owners. The court will state what powers and duties of the board will be transferred to the administrator.

This is why I object to the Government refusing to get involved in enforcing the Condominium Act.  With an update to the Act becoming law in the near future, let’s hope the newly formed Condo Office will have some teeth to deal with this.  Currently, Section 45, subsection 2 of the Condominium Act requires an Annual General Meeting has to take place within six months of the end of the Fiscal year.  However, currently if a Board chooses to not hold the meeting, there is almost nothing an owner can do about it.  If the Government wanted to it could require the Condo Office to handle the issue.  If the Board refuses to hold the Annual General Meeting within six months of the end of the Fiscal year, or holds it late, an owner could apply to have the Condo Office deal with the issue.  The Office could then hand out fines against the Board members for refusing to hold the meeting.

Another question raised was:

QUESTION:  A majority of our directors believe they should be subject to a code of ethics. But not all of them agree. How can we establish a code of ethics without the agreement of all of the directors?

ANSWER:  The Condominium Act permits the board to pass a bylaw setting out qualifications for directors. A bylaw stipulating that a specified code of ethics is a qualification for board membership may be passed by a majority vote of a quorum of the board.

The bylaw must be confirmed by a vote of owners of a majority of the units, and may state that substantial or continued breaches of the code will permit the board to disqualify a director. The bylaw should give an accused director the right to present arguments against disqualification to satisfy the requirements for natural justice.

Under no circumstance should the directors be judging whether or not a fellow director or officer has committed a breach of the Code of Ethics.  This is totally ripe for abuse.  If a director decides to continually question what the majority of the directors want to do, then all the majority of directors have to do is decide that the Board members is breaking the Code of Ethics.  How easy!

Do not get me wrong, I totally agree with having a Code of Ethics, but if it is going to be properly implemented, then an independent Committee needs to be established to deal with any alleged breaches.  And of course, the soon to be opened Condo Office could also be of assistance, if only as a recourse to appeal any removal from office of a director or officer.

About Edward Brain

I am a long time condo activist and have a background in Business Administration.
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