A third by-law package

In a different set of by-law updates—that was sold to a Mississauga condo—I saw the similar provisions as above but with a couple of new articles designed to give more power to the directors and to make it even more expensive for any owner who crosses the board.

6.03 Qualifications
 a) (v)
To qualify as a director of the Corporation, one must:
not have resigned or been removed from the board and two (2) years have not passed from the date that said director's term would have expired.
If someone quits the board or is kicked off the board, they cannot run to go back on the board for the rest of their term PLUS for a further two years.

So if a director sees that the majority of the board is doing something that goes against the best interests of the owners, they have to quit to be able to tell the owners and then they cannot return to the board for the rest of their term and for a further two more years.

Do you think that Rob Ford would agree to this kind of BS? How about  any elected political leader?

Wait: there is more!

(iv) resigns orally at a meeting of directors, or resigns in writing, in which case such resignation shall be irrevocable; or,
It then goes on about the Directors' Code of Ethics.

So if a director, who the rest of the board doesn't like, gets really upset at what the majority or the manager is doing and says "I quit", even if it was said when he or she was momentarily very upset, too bad they are gone and cannot run to be a director for the rest of their term plus for two more elections after that.

Doesn't apply to everyone
This is the best part. Since these by-laws only apply if a majority of directors pass a motion to enforce them, one or two directors cannot enforce these by-laws.
Therefore the directors that make up the majority on the board don't have to worry about any of this garbage.

However, if the majority find a minority director to be a pain, the majority waits for him or her to make an error. Then the majority of the board wraps itself up in cloaks of morality and indignation and kicks the director off the board.

6.16 Protection of Directors and Officers
This very long Article goes on for quite some time stating that the directors and officers cannot be held personally responsible for what they do while in office and wraps up with:
or for any loss occasioned by an error of judgment or oversight on his/her  office or in relation thereto, unless the same shall happen through or in connection with his/her own dishonest or fraudulent act or acts.

The Condominium Act says that the individual board members can be held responsible if they do not "exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances."

The Act
37.  (1)  Every director and every officer of a corporation in exercising the powers and discharging the duties of office shall,

(a) act honestly and in good faith; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 1998, c. 19, s. 37 (1).

It appears to me that this by-law may remove the directors need to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

This appears to say that the directors, and the officers (who are not elected by the owners and may not even be known to the owners), are not held personally responsible for anything they do in office unless they are convicted in civil or criminal court of dishonesty or fraud.

This is amazing.

7.09 b) Unsanctioned Committees
No other committee, association or group that purports to be, or may be construed by others to be, officially sanctioned by the Corporation by name, or otherwise, or is used as a means to disseminate misleading information as determined by the board in its full and unfettered discretion, shall be permitted. This includes any medium used in this regard including, but not limited to, news letters, emails and web sites. The owner or operator of such committees or associations, as the case may be, shall take all corrective steps, as may be requested and deemed necessary by the Corporation, immediately upon written request for same, failing which the Corporation is authorized to commence formal proceedings including, but not limited to, an application for compliance under section 134 of the Act. Any costs incurred by the Corporation, as related to this provision, are collectible in accordance with Article XIV of this By-law.

I agree that no unauthorized group of owners should give the appearance of being an official corporate group but the parts starting with:

"or is used as a means to disseminate misleading information as determined by the board in its full and unfettered discretion, shall be permitted...".

This maybe okay in North Korea but in Canada it goes too far. This says that owners cannot work together and distribute to the other owners, or to anyone else, any information that the board claims to be "misleading".

Only the board will feel free to act as a political group to distribute information about the corporation. An owner can act politically only as an individual. If you ignore this by-law, the board threatens to take you to court and make you pay all their legal fees.

Article XIV Indemnity
14.01 Each owner shall indemnify and save the Corporation harmless from any loss, cost, damage, injury or liability ("losses"), in respect of the owner's unit, common element or any other unit, and/or related to a breach of the Act or the Corporation's governing documents, which the Corporation may suffer or incur:
Articles 14.01 & 14.02 then go on to list a number of losses the board has in mind. They include:
a) (i)
any and all legal costs incurred by the Corporation, including:
(ii) any excess of legal costs incurred by the Corporation over and above costs awarded by the court;
(iii) the cost of any legal advice given to the Corporation
(iv) the cost of any letters written by the Corporation and/or the Corporation's solicitor as a result of any such acts or omissions; and/or
(v) any excess of legal costs incurred by the Corporation over and above costs awarded by a court in respect of any proceedings or other steps taken, resulting from an owner's default in payment of the common expense contribution in respect of a unit;
14.03 any cost that does, or may, affect the assets of the Corporation as determined by the Board.

So the board will use this by-law package to financially protect themselves from their own possible misbehaviour and then use another parts of the by-law package to deny the owners the rights that the Condominium Act and the courts give them and make individual owners pay all the condo's legal costs even if the courts say they are excessive?

What could happen:
An owner goes into the management office and complains that there are water leaks entering her apartment. The discussion gets heated. A few days later, the owner gets a bill in the mail from the condo's lawyer saying that the owner was harassing the property manager by swearing and yelling and this must stop.

The letter also says that the owner owes the corporation $800, the cost of this letter and if this bill is not paid within ten days, the legal costs will be added to the owner's common expenses.

How does the owner prove that the manager started the mild swearing and raising his voice first and the owner was provoked?

The issue could be anything big or small. Noise complaints, putting a bag of garbage in the wrong place, parking in the Visitor's Parking, "interfering" with management if you ask a contractor a few questions, sitting too long in the lobby, going door to door or leafleting for support when you are running for election at an owners' meeting.

What is the cost of a letter send by the manager or the board? Whatever the board sees fit?

Will the corporation's law firm over-charge an owner? It is not only possible but depending on the firm, you can bet on it. There have been cases, including recent ones, where condominium law firms had their fees reduced by half or more by the courts.

Maybe too dangerous to stay
If you own a unit in a condo that passes this by-law package, if there is a possibility that you will get into a dispute with your board, my advice is to immediately put the unit up for sale. You can stay as a renter if you wish but it may be far too expensive to own a unit that can be so easily liened by a vindictive or uncaring board of directors.

More and more I am convinced that it is far safer to rent an apartment or to buy a free-hold house than to own a unit in some Ontario condo corporations.

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