becomes more complex (1 of 2)
Bill 106 sets out new proposed provisions relating to requisitioned meetings. As currently written, the provisions of the Condominium Act, 1998 (the "Act") relating to requisitioned meetings are reasonably straight-forward and easy to follow. Conversely, unlike most of the changes to the Act that are proposed by the Bill, some of its changes in this regard might actually increase costs and complexity for some unit owners.
Given the length of this topic, it will be dealt with in two parts. This first part deals with the issue of qualifications and restrictions. The second part will deal with the issue of responding to requisitions.
The current situation
- own at least 15% of the units in a corporation,
- are listed in the corporation’s section 47(2) record,
- are entitled to vote (i.e., are entitled to notice of a meeting and are not 30 days or more in arrears of common expense contributions), and
- submit a written requisition (meeting the criteria for form and content that are set out in the Act) to the president or secretary of the board of directors of the corporation, or at the corporation’s address for service,
are entitled to require the corporation to hold an owners’ meeting relating to whatever subject matter is set out in the written requisition.
For more details on the current rules relating to requisitioned meetings, see our About Condo memo on this topic here.
Although somewhat different in the details, Bill 106 does not make many changes with respect to the qualifications for owners who wish to requisition meetings.
1. They still need only own 15% of the units; [See Note1]
2. they must have satisfied the requirements to be listed in the corporation’s record kept pursuant to the new section 46.1 of the Act, which replaces the current section 47(2) record (we will discuss this change in a future blog entry); and
3. they must not be 30 days or more in arrears of contributions to the common expenses.
 Or, 15% of just the “non-leased voting units” if the purpose of the requested meeting is to be the election or removal of the director occupying the non-leased voting unit position on the board (we will address this position, which replaces the current “owner-occupied” position, in a future blog entry). This is a new and appropriate change.
So far, so good, as all this is more or less the same as the status quo; more interesting are some of the changes being made to provisions regarding the purposes for which requisitions can be made.
New subject-matter restrictions
Once Bill 106 comes into force, it will restrict the right to requisition meetings to just the following matters:
1. An information meeting at which no vote will take place;
2. The removal or election of one or more directors; and/or
3. Any other purpose permitted by the Act or regulations.
Although the scope of purposes under #3 seems potentially broad, it is not (at least not yet). Unless and until regulations are made that add to them, there are only three additional circumstances proposed under Bill 106 for which owners would be permitted to requisition meetings (other than the above-referenced information meetings and meetings to elect or remove directors): to vote upon a proposed new rule under section 58 of the Act; to vote upon a proposed modification to the common elements, assets, or services of the corporation under section 97 of the Act; and to vote in respect of a notice of termination of the condominium due to substantial damage under section 123 of the Act.
In fairness, even though this appears to be a restrictive list the fact is that even under the current law, although owners are not expressly limited in the reasons for which they can requisition meetings, such meetings might not be effective as anything other than information meetings. The simple reason for this is that a requisitioned meeting cannot deal effectively with any matter that is within the exclusive jurisdiction of the board of directors of the corporation. For example, owners cannot at this time requisition a meeting to require a board to terminate a contract with a property manager, fire an employee, or enact a particular by-law or declaration amendment. However, what owners can do today (and that the proposed new restrictions appear to prohibit) is to at least require that a “straw vote” or poll be held at a meeting so that the views and desires of the owners can be observed and recorded. Under Bill 106, it appears that this right will be taken away (unless the regulations will provide otherwise).
It is also notable that the Bill prohibits anyone other than the owners of non-leased voting units from requisitioning a meeting to elect or remove the “no-leased voting unit” director. As indicated in the footnote referenced above, we will discuss this board position in more detail in another blog. In the context of this entry, however, we note that the result of this prohibition is that even if owners of other units object to the conduct of the director holding that position, they will not be entitled to requisition a meeting to consider his or her removal. While it is obvious that only the owners of non-leased voting units would have authority to remove such a director from his or her place, it is potentially problematic that other owners are disentitled from requisitioning a meeting about this to help make those owners aware of their concerns.
* * *
As mentioned above, in the next part of this entry we discuss what happens when the board says “no” to a requisition, which is where things really start to get complicated.