Board of Directors and Board Responsibilities
The board of directors of a condo corporation that is turned over is an elected group of people that is responsible for governing the affairs of the condo corporation. The board of directors will ideally play a critical role in supporting a positive, healthy condo community and ensure that the condo corporation and its assets are well managed and maintained.
The board has certain responsibilities such as:
- Setting the condo corporation’s annual budget;
- Making most decisions about how the condo corporation will spend its money, including selecting contractors or service providers your condo corporation will work with;
- Hiring and overseeing the work of a condo manager (should your condo corporation decide to get a condo manager);
- Ensuring required maintenance and repairs are carried out;
- Hiring specialists, such as engineers, to conduct reserve fund studies;
- Proposing changes to the condo corporation’s rules and/or by-laws;
- Giving various notices to owners; and
- Making decisions related to the condo corporation’s finances.
A condo’s board is usually made up of owners in the condo corporation (but can include non-owners depending on the provisions of the condo corporation’s by-laws). Directors are elected by the owners and serve for defined terms. Directors must seek re-election when their term expires if they want to remain on the board.
Duties of Directors and Required Disclosures
Board directors are responsible under section 37 (1) of the Condo Act to exercise their power or carry out their duties for the condo corporation with a standard of care. This means directors have a duty under the Condo Act to:
- Act honestly and in good faith; and
- Exercise the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances.
A condo corporation may also have a code of ethics outlined in a by-law. A code of ethics will govern matters such as conflicts of interest, confidentiality, and standards of behaviour at board meetings.
Individuals looking to become directors (i.e. candidates) must meet disclosure requirements listed under section 11.6 of Ontario Regulation 48/01 as well as any such requirements listed in the by-laws of the condo corporation. To qualify as a candidate an individual must disclose, among other things:
- Whether the candidate (or their spouse, child or parent) is party to a legal proceeding in which the condo is also a party;
- Whether the candidate has, directly or indirectly, an interest in a contract or transaction that the condo corporation is a party to;
- If the candidate is a unit owner with common expense fees in arrears for 60 days or more; and
Whether the candidate has been convicted of an offence under the Condo Act or under the regulations within the preceding 10 years, a statement of that fact and a brief general description of the offence.
A director is immediately disqualified if they do not meet certain disclosure obligations. In addition, directors may be disqualified if they meet any of the criteria listed in section 29(2) of the Condo Act (e.g., they have the status of bankrupt).
Aside from the developer-appointed directors, and instances where an individual is appointed to the board by the existing directors, directors are elected by the owners at a meeting, such as a turn-over meeting, an annual general meeting, a requisitioned meeting, or a meeting called specifically for elections due to loss of quorum. Directors usually serve for three-year terms, but this period may be shorter, depending on a condo corporation’s by-laws. Once their term is over, they must seek re- election to continue to act as a board member.
Requirements for Being a Director
Before a candidate can become a director, there are a few requirements that must be met. The candidate must:
Be an individual;
Be at least 18 years old;
Not have a status of bankrupt;
Not have been found incapable of managing property;
Not have been found incapable by a court; and
Meet the required disclosure obligations, as mentioned above.
Once an individual becomes a director, they can be immediately disqualified from their position if, for example:
They are bankrupt;
They have been found incapable of managing property or found incapable by a court;
They have a certificate of lien registered against their unit that has not been discharged within 90 days;
They failed to complete the mandatory director training within six months; or
They failed to comply with mandatory disclosure obligations.
Note that different condo corporations may have additional requirements for directors. You may wish to check your condo corporation’s by-laws for more information.
Director Training Requirements
All directors appointed, elected, or re-elected on or after November 1, 2017 are required to complete the training program provided by the Condominium Authority of Ontario (CAO) within six months of their appointment, election, or re-election, and at least once every seven years. Director training is provided for free and is easily accessible online on the CAO website.
Directors who fail to complete the training within the six-month timeframe are immediately disqualified from their board and cease to be a director.
Although director training is mandatory for directors, director training is not just for condo directors. It is available to any individual and contains plenty of useful information regarding condo living and condo governance.
Meetings and Quorum
Condo meetings can be divided into two types: owners’ meetings and board meetings. The Condo Act requires that a minimum number of participants be present at meetings, which is called “quorum”. Without quorum, voting cannot take place, however discussion on relevant business is still permitted. Note that a corporation may also be able to make by-laws with respect to meetings, including with respect to quorum and voting. For owners’ meetings, owners can either attend in person or by proxy. For more information on proxies, see Voting by Proxy and Voting Method below.
Owners’ meetings are meetings in which all condo owners are invited to attend. The following are the most common types of owners’ meetings:
• Annual General Meetings (AGM) are annual meetings where the board has the chance to report to owners on matters such as the financial health of the condo corporation. The AGM also gives owners the opportunity to discuss matters that are relevant to the business of the condo corporation. The following items may be on the agenda at an AGM:
- Approval of the minutes of the previous AGM;
- Review of year-end audited financial reports;
- Selection of the condo corporation’s auditor for the next fiscal year;
- Report of the board of directors regarding matters like past performance;
- Major upcoming projects (e.g., repairs or renovations), potential by-law changes and ongoing issues; and
- o Election of directors.
The standard quorum for an AGM is the owners of 25% of the units. If the quorum is not reached on the first two attempts to hold the AGM, the quorum is reduced to 15% on the third and on any subsequent attempts unless the by-laws specify otherwise.
• Owner-Requisitioned Meetings are meetings that the board is required to call at the request of the owners of the condo corporation. All owners can attend. Some examples of why owner- requisitioned meetings may be called include:
- Voting on a proposed rule;
- Discussion of an emerging issue (e.g., the behaviour of owners, residents, or guests); or
- The removal and replacement of a director before the expiry of that director’s term.
Board Meetings are meetings attended by the condo board to manage the affairs of the condo corporation. The only people who are entitled to attend board meetings are the directors, however, condo boards may invite individuals to attend board meetings as guests. A condo’s board of directors can only conduct condo related business at a board meeting. Before any condo business can be conducted, the board must make sure there is a quorum of directors attending the board meeting. For board meetings, quorum is a majority of the total number of positions on the board. For example, if there are 3 positions on the board, quorum would be 2 board members in attendance at the board meeting.
Voting by Proxy and Voting Method
At owners’ meetings, votes may be held regarding condo business. Unless the Condo Act provides otherwise, at a meeting, votes may be cast by:
- A show of hands, personally or by proxy
- A recorded vote that is:
- Marked on a ballot cast personally or by a proxy;
- Marked on an instrument appointing a proxy; or
- Indicated by telephonic or electronic means if the by-laws so permit.
If you are an owner who cannot attend a meeting but still want to participate in decision-making, you can enable somebody who will attend the meeting to vote for you. This individual is called a proxy (who need not be an owner in your condo corporation). You can appoint a proxy by completing a legal document called a proxy form and giving the form to the proxy. You can create only one proxy per unit. If you co-own your unit, the proxy represents all owners of the unit.
A condo corporation must provide various notices to owners to make owners aware of upcoming owners meetings. There are a variety of notices required under the Condo Act, such as:
- Preliminary Notice of Meeting: The Preliminary Notice of Meeting must be delivered to owners at least 20 days before a Notice of Meeting. The Preliminary Notice will, among other things, let owners know that a Notice of Meeting will be sent, state the purpose of the meeting, and, if applicable, request that individuals interested in being candidates for director positions notify the board in writing.
- Notice of Meeting: The Notice of Meeting must be delivered to owners in writing at least 15 days prior to the day of the meeting. A Notice of Meeting of owners will include the date, time, and place of the meeting. It must also identify the business to be discussed, among other things. No vote can take place on an item, other than routine procedure, that was not disclosed in the Notice of the Meeting.
If an owner wishes to receive notices electronically, they must provide an Agreement to Receive Notices Electronically form, and the condo corporation must have a statement of this method of receiving notices in the record of owners and mortgagees (unless the Condo Act provides otherwise).
Information Certificates help ensure that condo owners receive important information about the state of the condo corporation throughout the year. Information certificates can be broken down into three types:
Periodic Information Certificate (PIC). Sent out twice per fiscal year to all owners (within 60 days of the end of the first quarter and 60 days of the end of the third quarter). Includes key information about the condo’s board, finances, insurance, reserve fund, legal proceedings, and other matters.
Information Certificate Update (ICU). Sent to owners if there are certain key changes before the next scheduled PIC (such as changes in the directors or officers of the condo corporation). To be distributed within 30 days of the change.
New Owner Information Certificate (NOIC). Sent to new owners within 30 days after the new owner provides written notice stating their name and the unit that they own in the condo corporation. A NOIC covers the most recent PIC and any subsequent ICUs.
Records Requirements and Process to Request or Examine Records
As a condo owner, you have the right to access certain records regarding how the condo corporation is managed. It is the condo board’s duty to ensure that adequate records are kept and that they are retained for the legally required amount of time. If an owner wants to access certain records, they must use a Request for Records form. In their request, they can specify whether they wish to review records or request copies of records and they can indicate whether they would like electronic or paper copies.
As an owner, you may have the right to access:
- Your condo corporation’s declaration, by-laws, and rules;
- The financial records of your condo corporation;
- The minute book containing the minutes of owners’ meetings and the minutes of boardmeetings;
- A copy of the returns or notices of change that the condo corporation has filed with the CAO;
- All lists, items, records, and other documents from your condo corporation’s turn-over meeting;
- A list of the names of the owners of each unit in the condo corporation and their address forservice;
- All reserve fund studies and all plans to fund the reserve fund;
- All agreements entered by or on behalf of the condo corporation;
- All instruments appointing a proxy or ballots for a meeting of owners that are submitted at themeeting; and
- Other records as specified under the Condo Act, including in its regulations, or your condocorporation’s by-laws.
- Introduction to Condominium Living
- Condominium Governance
- Condominium Corporation Governing Documents
- Condominium Finances
- Living in Units and Using Common Elements
- Condominium Management
- Raising Issues with your Condominium Board
- The Condominium Authority of Ontario
- Condominium Management Regulatory Authority of Ontario
- Compliance and Enforcement Mechanisms