Condominium Act Requires More Protection

Gerry Hyman has another article for the Toronto Star.  One question raised in his article demonstrates why condominium owners in Ontario still need to insist on more protections in the Condominium Act.

The question raised is as follows:

QUESTION:  You often mention making a court application under Section 134 of the Condominium Act. Is it possible to make the application without legal assistance? What advice can you offer in doing so?

ANSWER:  I referred your question to Christopher Jaglowitz, a litigation lawyer with the condominium law firm Gardiner Miller Arnold. His response:

Unit owners should try to negotiate settlement, or seek a political result, using the democratic tools under the Condo Act rather than gamble their fortunes in litigation. The Superior Court process is complex, confusing, expensive and risky. Unrepresented owners typically don’t win their cases.

Even if you don’t need, or can’t afford, representation, you should get a lawyer’s opinion that your legal position is correct, and your evidence is proper and convincing, before starting any court application. If you lose the case, you could be ordered to pay the condo corporation’s legal costs, which could cost tens of thousands of dollars.

We expect that compliance cases will eventually be heard by the new Condominium Authority Tribunal, which is supposed to be a much quicker, simpler and cheaper process than court. The Tribunal started hearing cases about condo records in November 2017 and may expand to hear other types of cases over the coming years.

It is great to talk about a ‘negotiated settlement’ and ‘democratic tools’, but the Condominium Act, despite the recent changes that have taken effect as of November 1st, 2017, still gives the Board of Directors more power.  Let’s look at why this is:

1)  Meetings can still be rigged due to proxy use.  Proxies have not been limited or removed, and are still valid under the Condominium Act.  This means the Board, and their cronies, will solicit proxies from owners to remain in power.  Yes, an individual running for the Board can solicit proxies, but come on: if there are five members on the Board, each director need only collect 10 proxies each, and the Board already controls 55 votes at the meeting (their own five votes plus the 50 proxies they have already collected.)  The challenger needs to collect 50 proxies themselves, just to have a chance at getting elected!  How is this democratic?  And what do you think the directors are going to say as they are collecting those proxies: “Hey, Joe wants to get onto the Board, so vote for him!”  I think not!  They are going to tell people not to trust Joe – “He is out for himself.  He doesn’t care about you!” is more like it.  And by the time Joe gets to these people, the word is already out there – don’t vote for Joe!  How undemocratic!  How un-Canadian!

How do we fix this?  Easy, specify that no individual may hold more than two proxies.  Or if you have more than two proxies, the other proxies can only be used for quorum.  Mind you, if people know their vote will count at an owners’ meeting, you may find more people will show up!

2)  Hold the Board accountable.  Within reason, the owners – you know the people paying the bills – should have more say in how their condominium is run.  This means more meetings should be required – like a Budget Information Meeting around when the new Budget takes effect.  If the election is going to be contested (i.e. there are more candidates running for the Board then there are positions up for election), then the condominium should hold a ‘Meet and Greet’ for the candidates and the owners.  That way owners can meet the candidates who are running for election, talk over issues with them, etc. It helps to make owners more informed, which is a good thing.

Also, owners can, and should, be given a chance to vote on cosmetic work.  Not a vote to approve doing the work (that’s what the Board is there to do), but rather a vote on two – preferably three or four – options on how the work will look once completed.  Examples of this would be the redecorating of the hallways or the lobby.  The work will be done, but the owners get an input in how it will look.  Some Boards will do this, but there is no requirement to do so.

3)  Easier removal of directors.  Right now it takes a majority of all owners to vote in favour of removing a director.  You do not require that many votes to get elected, so why make it so hard, especially in condominiums over 100 units?  Change the requirement to a two-thirds majority of votes cast would make it easier to remove directors, and it would make it easier to reduce the number of proxies any individual could collect as it would mean that quorum, 25% of the owners, need only show up and the Board cannot rig the vote by getting enough people to stay home, or vote no, so that less than half of all the owners do not vote in favour of removal.

This would also be like a smoking gun – the Board would be far more willing, and receptive, to what the owners are saying if they know the owners could remove them at any time.

4)  Condominium Tribunal.  Perhaps the Tribunal needs to start handling all issues regarding condominiums, not just access to records.  Make it cheap and simple for owners to go to the Tribunal, and guess what maybe Boards would stop digging their heals into the ground every time an owner has an issue.  Boards would have to start working with the owners or get taken to the Tribunal.  Going to court can cost a lot of time and money – which Boards know, so they use it to their advantage to keep being from doing so.  This needs to be stopped, now!  Tenants in this province have more rights than a condominium owner!  That’s just not right.   Plus, as the response to the question states, the owner could end up paying a lot of money if the condominium wins – and Boards knowingly can use expensive lawyers, and use delay tactics to increase the bill, and then sock it to the owner.  Anything to keep the owners in check.

5)  Term limits.  Maybe its time to say ‘Three terms and your out’ with directors.  For directors doing the full three year terms allowed under the Condominium Act, three terms would mean nine years.  Guess what, after nine or 10 years maybe it’s time to let others serve on the Board.  Plus, if the Board is smart and uses Committees, these directors do not have to walk off into the sunset, but could serve on a Committee instead.  Then after three years they can run for the Board again.

6)  Change the minimum required number of directors.  Currently, the Condominium Act only requires three directors to serve on the Board of Directors, although the By-laws may stipulate a higher number.  Some condominiums, especially larger ones, will have a By-law calling for five directors.  However, the minimum number of directors for a condominium should be determined by the number of units – there should still be a requirement for at least three directors, but the number should be automatically set at a minimum of one director for every 20 units.  That means in a 100 unit condominium, the Board would be comprised of five members, but a condominium with 200 units would have 10 directors. Now, what if there are say 155 units – well that would mean eight directors:  155 divided by 20 comes out to 7.75 directors and there should be a requirement to round up the number, so eight directors.  More directors means a more diverse Board of Directors, and more opportunities to elect people that will work on behalf of the owners.

I have written about how to make condominiums democratic in the past, as well as many other suggestions in other posts on my site.  But, the Condominium Act could go a long way in helping owners and curtailing the powers of the Board.  There are Boards out there that do work in a proactive way to keep the owners up-to-date and to provide them with opportunities to be involved and have a say.  But there is no current requirement to do so, which allows a Board of Directors to run a condominium like a virtual dictatorship.  It’s time to end this and provide the owners with easy to use tools to hold their Boards in check.

Let’s make condominiums more open and transparent!

 

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