The Condominium Corporation

 

NOTE: All references to Section numbers refer to sections in The Condominium Act (SM 2011, c. 30, Sch. A).

What is the mandate of the condominium corporation?
It has the authority to manage the property and common assets on behalf of the unit owners (in keeping with The Condominium Act).

      Section 85(1)

What is the duty (responsibility) of the condominium corporation?
Its duty is to control, manage and oversee the corporation’s common elements and common assets.

      Section 85(2)

Can the condominium corporation enter into agreements?
Yes. It can enter into any agreement in order to carry out its mandate or fulfil a duty. Examples of agreements include:

• a property management agreement
• a commercial lease for parts of the common elements (ex: a convenience store)
• an agreement to provide goods (products) and services to the condominium corporation (ex; slip-proof mats in the foyer, lawn maintenance, snow clearing)

      Section 85(3), 87

The condominium corporation has the power to buy, sell, mortgage or otherwise deal with real property (ex: land, buildings) and with personal property (ex: vehicles, tools, supplies). However, it can do so only to carry out the corporation’s mandate or to fulfil a duty. Certain dealings with real property can be done only with the written consent of unit owners.

      Section 88(1), 88(2)

What controls are there on the way the condominium corporation is governed (run)?
The board must govern the condominium corporation as required by The Condominium Act and regulations, and the condominium corporation’s declaration and by-laws.

      Section 86

 

Board of Directors

What is the board of directors?
It is a group of elected unit owners responsible for exercising the powers, and carrying out the duties, of the condominium corporation. Duties include setting and collecting contributions from unit owners for common expenses, hiring contractors, paying the corporation’s bills and managing the reserve fund.

      Section 94(1)

Who serves on the board of directors?
Unit owners are elected to serve on the board. The first board of directors is elected at the turn-over meeting held after the declarant (see Declarant and Declarant’s Board for more information) has sold a majority of the units.

For more information on general meetings, see below.

      Section 94(1), 95

Who can be elected as a director?
Unless the condominium corporation’s by-laws say otherwise:

• A director must own a unit personally or, if a unit is owned by a corporation, he or she must be a representative of that corporation.
• If more than one person owns a unit, only one of them may be a director at any time (unless the by-laws say that every unit owner is a director).
• If a corporation owns one or more units, only one representative of the corporation may be a director at any time.

      Section 96 and 97

What are the duties of the board’s directors and officers when handling corporation business?
Each director and officer (ex. chairperson, secretary, treasurer) must:

• act honestly, in good faith and in the best interests of the corporation
• display the care and skill that a reasonable person would display in similar circumstances.

NOTE: Directors and officers must notify the board, in writing, about any conflicts of interest they may have.

      Section 94(2), 105(1), 106 to 107

What is a quorum?
A quorum is the minimum number of people who must be at a meeting to conduct business. A quorum of the board of directors is a majority of the directors. When deciding if there is a quorum, vacant director positions are included in the total number of directors.

      Section 100, 102(1)

How are vacant positions on the board filled?
If there is a vacancy, the remaining board members (as long as they make up a quorum) may appoint any qualified person to be a director. This person will fill that position until the next general meeting, when the unit owners must elect a director to fill the vacancy.

The board may also vote to reduce the number of directors. However, the number of directors can’t be fewer than what is required by the declaration or by-laws.

      Section 102(2), 102(3)

If a vacancy on the board means there can no longer be a quorum, the remaining board members must call a general meeting of unit owners to fill all vacant positions. This general meeting must be called within 30 days after the quorum is lost.

      Section 102(5)

Need more information?
For more information on condominium corporations and boards of directors, see:

• Part 6 of The Condominium Act

 

General Meetings

When does the board of the condominium corporation need to hold an annual general meeting (AGM)?
The board must hold an annual general meeting within six months after the end of each fiscal (financial) year. The meeting may be cancelled only if all unit owners who can vote:

• waive (in writing) the requirement to hold the meeting
• consent (in writing) to any resolutions that elect new directors or deal with any other business.

      Section 110

What happens at an annual general meeting?
The unit owners elect new directors to the board. Unit owners may vote only if they are at the meeting, or have chosen a proxy (a person to represent them at the meeting). Directors are elected to the board for one-year terms (unless the by-laws say otherwise).

      Section 111

The unit owners must also appoint an auditor at each AGM, including the first one. The auditor must be:

• a certified general accountant
• a certified management accountant
• a chartered accountant

The auditor will report to the unit owners on the corporation’s annual financial statements.

Note: If a condominium corporation has fewer than 10 units, it does not have to appoint an auditor – as long as all unit owners agree, in writing, to do without an audit until the next AGM.  

      Section 73, 156, Condominium Regulation Section 33(1)

The following people may not be appointed as the auditor:

• a director, officer or employee of the condominium corporation (or the spouse, common-law partner, son, or daughter of a director or officer, or the son/daughter of the spouse or common-law partner)
• a manager under a property management agreement with the condominium corporation
• partner, employer or employee of a director, officer or employee of the condominium corporation
• a unit owner, or the occupant of a unit, in the condominium property
• a person with a direct or indirect interest in any agreement or transaction that the condominium corporation is a party to.

      Section 156(2), 158
      Condominium Regulation Section 33(2)

At the annual general meeting (AGM), unit owners have the right to raise any matter for discussion, if the matter is relevant to the business of the condominium corporation. However, only routine matters may be voted on, unless the matter was included in the notice for the meeting.

      Section 112, 124(1)

The board of the condominium corporation must review whether the corporation has enough insurance coverage and then report on the coverage at each AGM.

      Section 195

At least once a year at a general meeting of unit owners, such as the AGM, the board must report to the unit owners on the amount in the reserve fund and review the most recent reserve fund study or update.

      Section 144(3)

Can special general meetings be called?
Yes. The board may call a special general meeting at any time to deal with any business, such as passing a resolution.

A unit owner may request a special general meeting by giving the board a written request that has been signed by unit owners who own at least 25 per cent of the units. The written request must include:

• enough detail about the purpose of the meeting so unit owners can decide whether to attend or appoint a proxy
• if the purpose of the meeting is to remove a director - the name of the director and reason for the removal

      Section 113(1), 114(1), 114(3)

When a board receives a written request for a special general meeting, it must either:

• call and hold the meeting within 35 days, or
• put the matter on the agenda for the next annual general meeting (if the unit owners who signed the request agree)

      Section 115(1)

If the board receives a written request, but does not call a special general meeting, the unit owner who signed the request for the meeting may call one. In this case, the special general meeting is to be held within 45 days after the day the unit owner called it.

      Section 115(2)

The unit owner who called the special general meeting may ask the condominium corporation to pay for any reasonable meeting costs.

      Section 115(3)

What kind of notice must be given for a general meeting?
Unit owners must receive notice of each general meeting. The notice must:

• be in writing
• show the date, time and place for the meeting
• give details of the matters to be dealt with at the meeting
• include a copy of any proposed change to the declaration, by-laws, rules or agreements that will be discussed at the meeting
• include a copy of a unit owner’s request for a special general meeting (if that is why the meeting is being held)

      Section 116(1)

How much notice must unit owners receive for a general meeting?
If the written consent of the unit owners will be required, notice must be given at least 30 days before the meeting date. If written consent is not required, the condominium corporation’s by-laws may allow for a shorter notice period.

      Section 116(2), 116(3)

What types of matters require written consent of unit owners at a general meeting?
Examples include proposals to:

• amend (change) the condominium corporation’s declaration or plan (Section 24(1))
• acquire, encumber (ex. place a mortgage) or dispose of real property (Section 88(2))
• use surplus (excess) reserve fund money for another purpose (Section 143(4))
• make a major change to the common elements, a common asset or a service or amenity that the condominium corporation provides to unit owners (Section 176(1))

Notice of the meeting must be given, within the required time, to:

• all unit owners who have given the condominium corporation their names and addresses for receiving notices and other documents
• all unit mortgagees who are entitled to exercise the right of the unit owner to vote, or give or withhold consent, and have given their names and addresses for receiving notices and other documents

      Section 116(4)

Can the condominium corporation decide not to hold a general meeting?
Yes. If all unit owners agree, in writing, before the date an annual general meeting is required, the meeting does not have to be held. However, the unit owners must agree in writing to any resolutions that:

• elect a new board  by acclamation (without a ballot, when the election is uncontested)
• deal with any other business

      Section 110(2)

If all unit owners entitled to vote waive the requirement to hold a special general meeting, and give their written consent to any resolution proposed, the meeting may be cancelled.

      Section 113(2)

Does a unit owner need to attend a general meeting in person?
Not necessarily. A unit owner may attend a general meeting by teleconference or video-conference, if allowed by the condominium corporation’s by-laws. In this case, the unit owner is considered to be present at the general meeting.

      Section 119(1), 119(2)

Or, a unit owner may appoint a proxy to act on his or her behalf. A proxy can do anything at a meeting that the unit owner can do (ex: vote, propose and second motions, participate in discussions), unless the proxy document says otherwise.

The condominium corporation’s by-laws may require the appointment of a proxy to be in writing. The appointment may be specific (for a meeting or resolution), or general (for all meetings and votes) and may be cancelled by the unit owner at any time.

      Section 128(1) to (4)

A unit owner may also appoint a person to provide written consent on their behalf, but only for a specific matter. The appointment must be in writing and the condominium corporation’s by-laws may require that the person sign the appointment. The unit owner may cancel the appointment at any time.

      Section 129(1) to (3)

However, a unit owner – unless the owner is the declarant or owner-developer - may not appoint one of the following as a proxy, or to provide consent on the unit owner’s behalf:

• an employee or agent of the condominium corporation
• a declarant, employee or agent of the declarant, or a person who doesn’t deal with the declarant at arm’s length
• an owner-developer, employee or agent of the owner-developer, or a person who does not deal with the owner-developer at arm's length
• a person who provides management services to the condominium corporation under a property management agreement, or that person's employee or agent.

Note:  Any action taken or consent given, by such a person is void.

      Section 128(5), 129(4)

What is a quorum for a general meeting?
When dealing with business at a general meeting of unit owners, a certain percentage of unit owners must be present. This is called a quorum.

The act requires unit owners who hold at least 33 per cent of the voting rights to be present – either in person or by proxy – at the meeting. The condominium corporation’s declaration may require a higher percentage.

However, if the condominium corporation has fewer than four units or four unit owners, the quorum requirement is that unit owners who hold at least 66 per cent of the voting rights (or higher, if required by the declaration) must be present at the meeting, either in person or by proxy.

      Section 117(1)

If a quorum is not present within 30 minutes after the meeting’s scheduled start time, the board may reschedule the meeting. The condominium corporation must try to notify the unit owners entitled to vote, mortgagees entitled to vote, and proxies present at the meeting, of the date, time and place of the rescheduled meeting.

If a quorum is not present at the rescheduled meeting within 30 minutes after the meeting’s scheduled start time, the unit owners (or their proxies), who are entitled to vote and who are present, make up a quorum.

      Section 118

 

Voting and giving and withholding consent

To be valid, a vote must take place at a general meeting of unit owners that has been properly called and where a quorum is present.

Except for routine matters or procedure, only matters that have been clearly outlined in the meeting notice may be voted on at a general meeting. (This does not apply if all unit owners, or unit mortgagees who are entitled to vote, are present in person or by proxy and agree to take a vote on another matter.) 

      Section 123 and 124(1)

What voting rights do unit mortgagees have?
Some mortgages include terms that give the unit mortgagee (the institution or person holding the mortgage) the right to vote, or give or withhold consent, as if they were the unit owner. This right may be exercised only if the unit mortgagee has given the condominium corporation written notice of the mortgage and the address for giving notices and other documents to the unit mortgagee. Otherwise, the unit owner may exercise this right instead, if he or she is entitled to do so.

      Section 126

What voting rights do unit owners have?
The declaration of the condominium corporation outlines the voting rights of unit owners. The declaration may grant more voting rights to some unit owners than others.

A unit owner entitled to vote may vote in person or by proxy at a general meeting. A unit owner may also authorize a person to give consent on the unit owner’s behalf. 

The condominium corporation’s by-laws may prevent unit owners from exercising their voting rights, or from providing consent, if their contributions for common expenses, or to the reserve fund, are at least 30 days behind.

If this is the case, a unit owner is not counted among those required to vote or consent. The unit owner’s right to vote or consent is reinstated if the outstanding amounts, and any associated costs, are paid before the meeting begins, or the period for providing consents has expired.

      Sections 120, 125, 127, 129(1), and 167(1)(y)

Need more information?
For more information on the condominium corporation in general, see:

• Part 6 of The Condominium Act

 

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