Quorum
Short Answer
The minimum number of persons who must be present at a meeting to transact business.
Definition
Note that under the proposed Protecting Condominium Owners Act, 2015, if such Act comes into force, there will be changes to the quorum requirements for condominium meetings. Please see the Bill 106 Blog entry "Fixing Quorum" (here) for more information about those proposed changes. A future entry will also speak to the proposed changes relating to being counted toward quorum.
The concept of 'quorum' has two applications under the Condominium Act, 1998 (the "Act"):
Pursuant to the Act a condominium board of directors cannot have fewer than 3 members or such greater minimum number as the by-laws of the corporation may require. Note that the number of directors constituting the board is to be a fixed number, rather than (as is applicable for some other types of organization) a 'range' (such as, "from three to seven").
A quorum of the board is a majority of the members of the board. This means that if the number of directors as required by the by-laws of the corporation is seven, then the majority or quorum is four; if the number of directors is five, the majority or quorum is three; if the number is three (either by by-law or by default under the Act), the majority or quorum is two.
The Act should not be interpreted to mean that a quorum is a majority of the directors at the time or in office. If this were the correct interpretation, then it would not be possible to lose quorum on the board. See the Condopædia article, Quorum, Loss of (on Board), for what happens when this occurs.
The Act provides that the default quorum for a meeting of owners is the number of owners who own 25% of the units and permits this number to be altered by by-law to the number of owners who own 33.3% of the units.
The exception to the foregoing arises in the case of the meeting to be called by the declarant's appointed board of directors under subsection 42(6) of the Act by the later of (a) 90 days after the declarant sells the first unit and (b) 30 days after the declarant has sold 20% of the units, if the conditions for Turn-over do not yet exist, at which the unit owners are entitled to elect two directors to the board. The quorum for such election is the owners of 25% of the units not owned by the declarant.
Note that in each case the number is not "25% of the owners" or "33.3% of the owners". The percentage is a percentage of units. Therefore, for example, if there is a 100-unit condominium, in which one owner owns 20 units, another owns 15 units, and the balance of the units are owned by individuals (i.e., there are 65 other owners), the two owners who own 20 units and 15 units respectively could constitute quorum for a meeting of owners (post-Turnover) even if none of the other owners bothered to appear. Currently, only Standard Condominium Corporations can amalgamate. A Phased Condominium can amalgamate only after all phases have been completed or no sooner than 10 years after the initial registration.
- First, in regard to a board of directors, quorum is a majority of the board.
Pursuant to the Act a condominium board of directors cannot have fewer than 3 members or such greater minimum number as the by-laws of the corporation may require. Note that the number of directors constituting the board is to be a fixed number, rather than (as is applicable for some other types of organization) a 'range' (such as, "from three to seven").
A quorum of the board is a majority of the members of the board. This means that if the number of directors as required by the by-laws of the corporation is seven, then the majority or quorum is four; if the number of directors is five, the majority or quorum is three; if the number is three (either by by-law or by default under the Act), the majority or quorum is two.
The Act should not be interpreted to mean that a quorum is a majority of the directors at the time or in office. If this were the correct interpretation, then it would not be possible to lose quorum on the board. See the Condopædia article, Quorum, Loss of (on Board), for what happens when this occurs.
- Second, in regard to owners' meetings (with one exception), quorum is the owners of 25% or 33.3% of the units.
The Act provides that the default quorum for a meeting of owners is the number of owners who own 25% of the units and permits this number to be altered by by-law to the number of owners who own 33.3% of the units.
The exception to the foregoing arises in the case of the meeting to be called by the declarant's appointed board of directors under subsection 42(6) of the Act by the later of (a) 90 days after the declarant sells the first unit and (b) 30 days after the declarant has sold 20% of the units, if the conditions for Turn-over do not yet exist, at which the unit owners are entitled to elect two directors to the board. The quorum for such election is the owners of 25% of the units not owned by the declarant.
Note that in each case the number is not "25% of the owners" or "33.3% of the owners". The percentage is a percentage of units. Therefore, for example, if there is a 100-unit condominium, in which one owner owns 20 units, another owns 15 units, and the balance of the units are owned by individuals (i.e., there are 65 other owners), the two owners who own 20 units and 15 units respectively could constitute quorum for a meeting of owners (post-Turnover) even if none of the other owners bothered to appear. Currently, only Standard Condominium Corporations can amalgamate. A Phased Condominium can amalgamate only after all phases have been completed or no sooner than 10 years after the initial registration.
What you need to know…
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…as a Unit Owner
It is important for unit owners to attend their meetings, either in person or by proxy. It is important purely from the point of view of participation, but it is also important from the perspective of achieving quorum. If an insufficient number of owners attends a meeting, the business of the meeting cannot be carried out. This can cause significant problems for the operation and well-being of the condominium. Attendance at a meeting is not the sole criteria for achieving quorum. Unit owners must also qualify for quorum. To be eligible to count toward quorum, an owner must: 1. have been entitled to notice of meeting; 2. be entitled to vote at the meeting; and 3. attend the meeting in person or by proxy. A unit owner's entitlement to vote is primarily dependent on two factors: (1) arrears of common expenses; and (2) entitlement to receive notice of a meeting. If a unit owner is in arrears of common expenses for 30 days or more at the time of a meeting, the owner is not entitled to vote at the meeting. Therefore, the owner cannot count toward quorum. An owner is only entitled to receive such notice if he or she was listed in the section 47(2) record of the condominium at least 20 days prior to the date of the meeting. If the owner has not provided the condominium corporation with his, her or its name and address for service for the purpose of the same being entered in the section 47(2) record of the corporation at least 20 days prior to the date of the meeting, the owner is not entitled to notice of the meeting and therefore is not entitled to vote or count toward quorum at the meeting. Another factor that might affect entitlement to vote is whether an owner bears sufficient voting authority for the unit. The Act states that where there are multiple owners of a single unit, only a majority of them may validly exercise the right to vote. Where they are evenly divided, “the vote shall not be counted” (see section 51(3) of the Act). Therefore, if there are three owners of a unit, and only one of them is present at the meeting, it is arguable that owner should not be counted in determining quorum since the owner is not (alone) entitled to vote on behalf of the unit. The same is true if there are only two owners of a unit since one of them alone cannot constitute a majority (again, see section 51(3) of the Act). Therefore, if there are two owners of a unit and only one can attend the owners' meeting, the other should provide his or her co-owner with a proxy to ensure there is no question as to the entitlement of the attending owner to vote on behalf of the unit and count toward quorum. For a discussion of proxies, see the Condopædia article on Proxies, and the About Condo memorandum "A Bit About Proxies". |
…as a Board Member
A director with a conflict of interest as defined in section 40 of the Act is, with certain exceptions, not entitled to attend board meetings during the discussion of the relevant issue, to count toward quorum or vote on it. For details as to the exceptions, see the Condopædia article on Conflicts of Interest. All other disqualifications affecting quorum actually impact the board member's complete status as a director. That is, a person who no longer qualifies automatically ceases to be a director, so obviously could not count toward quorum. Any board meeting lacking quorum is ineffective. No decisions of the corporation can be made outside of a meeting possessing proper quorum. |
…as a Manager
Managers are often tasked with duties relevant to ensuring there will be a quorum of members at meetings of the corporation. As the foregoing sections indicate, this means, amongst other things, managers need to ensure that the section 47(2) record of the condominium is completed and maintained, and must keep an accurate record of unit owners' payment of common expenses to be able to determine whether owners are qualified to receive notice of the meeting, vote, and therefore count toward quorum. |
…as a Declarant
Within 10 days of the creation of a condominium corporation, the declarant must appoint a board of directors. Although this board is not required to hold meetings, the declarant should not allow its appointed board to lose quorum. Resolutions of this board may be passed in writing only if all members of the board sign the resolution. Therefore, if one of these directors resigns, the declarant should forthwith appoint a replacement to ensure there are always 3 directors, or a minimum of 2 (a quorum) if necessary, serving on the board. The Act provides that by the later of (a) 90 days after the declarant sells the first unit and (b) 30 days after the declarant has sold 20% of the units, and if the conditions for Turn-over do not yet exist, the unit owners shall be entitled to elect two directors to the board. The Act states that such directors are entitled to be on the board despite the fact that this makes the board greater in number than the declaration* allows but does not provide specific guidance on whether this necessarily increases the quorum requirements for the board. It would require legislative or judicial intervention to determine the answer with certainty. *The fact is that generally the number of directors constituting the board is not set out in the declaration, but only in the by-laws of the corporation. This is an example of the kind of inconsistency that sometimes appears in the Act, presumably due to the fact that its various parts were written by committees that did not adequately consult while drafting the Act. |