Fixing Quorum (2 of 2)
In our first blog entry on quorum, we dealt with the changes proposed in Bill 106 relating to how quorum is counted. In this entry, we address how Bill 106 proposes to change the criteria for entitlement for an owner to be counted toward quorum.
What is Quorum?
“Quorum” means the number of members of a group or organization required to be present at a meeting in order to conduct business legally.
Qualifying for Quorum under the Current Law
An owner’s attendance at a meeting is not sufficient on its own to allow that owner to count toward quorum for the meeting. Currently, the Condominium Act, 1998 (the “Act”) imposes three conditions that must be met for an owner to count toward quorum:
The owner must be present at the meeting, either in person or represented by proxy;
the owner must be entitled to vote at the meeting; and
the owner must have been entitled to notice of the meeting.
Present in Person or by Proxy
Entitled to Vote at the Meeting
Entitlement to vote is also dependent on entitlement to receive notice of the meeting, which is also the third qualification for counting toward quorum.
Entitled to Notice of Meeting
Proposed Changes under Bill 106
Bill 106 proposes to modify the conditions for an owner to count toward quorum. In fact, it establishes two sets of conditions: One for a meeting of owners called prior to turnover pursuant to subsection 42(6) of the Act, and the other for all other meetings of owners.
Meeting held pursuant to subsection 42(6)
· Entitlement to Notice of Meeting
Instead of providing both a name and address for service for the corporation’s section 47(2) record in order to be entitled to receive notice of a meeting, Bill 106 proposes that the owner will only need to have provided his/her/its name and unit number to the corporation for the purpose of including it in a new record to be maintained under the proposed new section 46.1. The section 47(2) record is to be completely eliminated.
Also eliminated is the necessity for the owner’s name (and unit number) to actually appear in the record: The owner need merely have given such information in writing to the corporation, and he/she/it will be entitled to notice of the meeting regardless of whether such information has actually been transferred into the record. Nevertheless, the owner must still have submitted this information at least 20 days prior to the date of the meeting.
· Entitlement to Vote at the Meeting
Entitlement to vote at a meeting is altered under Bill 106 by removing the current requirement that an owner be entitled to receive notice of the meeting, and replacing it with a requirement that the owner has submitted his/her/its name and unit number to the corporation for the purpose of including it in the record of unit owners to be kept under the proposed new section 46.1.
Since such criteria is almost identical to the requirements that need to be satisfied in order to be entitled to notice of the meeting, this change appears, at first glance, to be insubstantial. What is significant, however, is that entitlement to vote does not require the owner to have submitted his/her/its information to the corporation at least 20 days prior to the meeting. In fact, Bill 106 imposes no time restriction in this regard, so, presumably, as long as the owner has provided the information in writing to the corporation at least prior to the time of the meeting – or perhaps even just prior to the time of the vote– he/she/it should be entitled to vote at the meeting.
Bill 106 also preserves the requirement under the current legislation that an owner will not be entitled to vote if he/she/it is 30 days or more in arrears of common expense contributions.
Concluding Commentary: An Odd Difference
It appears unusual, though perhaps just a case of error or oversight, that the criteria to qualify for quorum are made different under Bill 106 for the meeting held prior to turnover pursuant to subsection 42(6) than for all other owners meetings.
By removing the requirement generally that an owner be entitled to notice of the meeting both to count toward quorum and to vote at the meeting, Bill 106 makes it that a unit owner who purchased a unit fewer than 20 days before the meeting date and has submitted his/her/its name and unit number for the purposes of the new section 46.1 record, will be able to participate almost immediately in the decision-making of the corporation by attending, counting toward quorum and voting at the meeting, even if he/she/it received no prior notice of it.
However, the same privilege does not exist for such new owners in respect of the meeting held prior to turnover pursuant to subsection 42(6). In the case of that meeting, owners must have submitted their names and unit numbers to the corporation at least 20 days prior to the date of the meeting in order to qualify to receive notice of, and count toward quorum at, the meeting.
Given that a meeting under subsection 42(6) will usually take place early in the life of the condominium, and certainly while a majority of units remain unsold, this distinction raises the risk that such meeting might not obtain quorum. This might easily occur if the declarant fails to be present at the meeting and there are insufficient other owners to qualify for or achieve quorum, or if such owners, for lack of a notice, do not even know to attend. As a result, although the owners would have been entitled to vote at the meeting, they cannot since no business can be conducted if quorum is not achieved.
Again, it is unclear to us whether the government intended this distinction or if it was just an oversight, but in our view it is not a good thing and we see no basis for it. A meeting held pursuant to subsection 42(6) is one for which it makes the most sense to remove the requirement that the owners must meet the conditions for entitlement to notice of the meeting. Instead, this requirement could (and likely will) limit the number of owners who attend and can participate effectively at the meeting.