Regulations—1st Draft
February 2017

These are my notes that were made from the Ministry's published Draft.

The Ministry released a first draft of the Regulations for the amended Condo Act 2008. Interested parties have until 30 March 2017 to send feedback to the Ministry.

By the way, the initialism "PCOA" for Protecting Condominium Owners Act, 2015 is ghastly. It would have been better if the Ministry writes Protecting Condominium Owners Act out in-full throughout this document so we know what they are referring to.

Concerns
This draft appears to have been hastily slapped together. The Ministry can then say they had public consultations—something politicians love so much—so at least something in the Act can be proclaimed on Canada Day.

These draft regulations lack substance. The required forms are not included. We won't see them until who knows when. There is no details on the mandatory director training what-so-ever.

Anyway, this is Wynne's Canada Day gift to condo owners.

Part 1—Communications
The amended Act calls for three new information certificates that the corporation needs to send to owners and mortgagees. They all have initialisms (PIC, ICU, NOIC) that the owners will never get the hang of.

Periodic Information Certificate (“PIC”)
This document is to be provided to owners twice per fiscal year, within 30 days of the end of the first and third fiscal quarters. It is like a mini-Status Certificate.

What is new here is that it has to tell the owners the names of directors who are 60 days or more behind in their monthly maintenance payments.

Information Certificate Update (“ICU”)
Will be issued to all owners when there is a change in directors, officers, manager or management company.

New Owner Information Certificate (“NOIC”)
To be sent within 15 days of a new owner giving the corporation written notice that they are new owners. The new owners get a copy of most recent PIC and ICU, and any other information required by the corporation's by-laws, if any.

Exemptions
These certificates will not be necessary for condos with:
•
 fewer than 25 units or
•
 in condos where 80% of the units consent, in writing, that they do not want them for the current fiscal year.
(That is how this is written but it is unclear, to me anyway, if this option to dispense with the Cerificates will be restricted to just condos that have fewer than 25 units. That is what a couple of lawyer blogs are stating.)

Record of owners and notice to owners
After buying a unit, new owners need to provide their name and unit number to the corporation within 30 days.

Receiving notices
If the owners agree, the corporation may send them these certificates, and other notices, by e-mail.

Non-electronic means include delivered to an owner's unit or mailed to the unit.

Concerns
1.
 Information Certificate Update should be required to include:
a.) All fire department & building code work orders.
b.) Copy of the latest Fire Inspection Certificate.
c.) Verification that all the utility bills are being paid in full every month.
2.
 There is nothing that compels the corporation to know the number of units that are leased. Expecting the owners to inform the corporation that they are leasing their units is naive. (Elevator bookings, fob activations and checking city records would uncover this information if the board was truly interested.)
3.
 The certificates should disclose how many units are rented short-term. (Short-term rentals do not have leases, they have licences.)
4.
 I can see that there will be complaints about the increase the corporation's administration and legal costs.
5.
 The effectiveness of these certificates depends on the quality of the information and how current it is. The corporation's auditor should be required to give an opinion on these disclosures
6.
 I fear that, by claiming undue financial hardship and "if we have to do this, we'll be forced to raise your fees", condo boards will be able to get 80% of the owners to agree to dispense with the Information Certificates to the determent of the minority of interested and informed owners that want them.

If so, kiss the Communication Certificates  goodbye.
7.
 As far as e-mail goes, owners should think about this. I will want all information from my corporation sent to me to my unit or by regular mail. It is harder to read information off a computer screen than on paper. It is also more difficult to compare one year against another.

Finally, I do not want to spend my time and money printing out information from the corporation when it is far easier and cheaper for them to do it.

Part 2—Disclosure & training for board members
This is new and, so far, the training requirements are not explained.

Disclosure obligations for candidates
When a preliminary notice of meeting is sent for a meeting that includes the election of directors, individuals providing notice of their intent to be a candidate will be required to include a required disclosure form.

All the candidates disclosures will be part of the meeting notice. A candidate, who is nominated at the meeting, will need to disclosure this information then.

What’s in the disclosure?
•
 If the candidate, or any close relative, is involved in any active legal proceedings involving the condo corporation.
•
 If the candidate has been convicted of an offence under the Condominium Act or the regulations, within the past 10 years.
•
 If the candidate has an interest in a contract or transaction that the corporation is also a party to, and the candidate’s interest is not as a purchaser, mortgagee, or owner/occupier of a unit, then a statement of that fact and the nature and extent of this interest.
•
 If the candidate is a unit owner in the corporation and the candidate’s common expense contributions are in arrears for 60 days or more.
•
 Anything else a condominium corporation’s by-laws require.

Concerns
Nothing said about criminal records. Strange that this has been left out. I think that the owners (voters) should know if any of the candidates have been convicted of theft, fraud, assault, child molesting, etc especially if he or she will have access to all the residential units.

(I guess that it would be up to the individual condo corporations to add criminal convictions to the list of items to be disclosed.)

Training
The proposed regulations would require that all directors complete the required training within six months of being elected or appointed to a board, if they are elected or appointed, after the new training provisions come into force. Additionally, the obligation to take the course would only be triggered after July 1, 2017 if a course has in fact been designated.

Directors would be required to retake the training if they are elected or appointed to the board again and have not completed the training within the past seven years.

Concerns

Who gives the training. Not sure, doesn't say. Maybe it will be the Condo Authority or, far more likely, they will farm this out to a third party. (Perhaps to one of the Ministry's condo-industry partners.)

The elected directors will be reimbursed by their condominium corporation for any costs directly incurred in taking the required course.

Concerns
I can think of several:
•
 We have no idea what form this training will take place. Will it be over the Internet, classroom lectures, reading texts: who knows?
•
 How long will this training take?
•
 Will there be a test or will everyone who shows up, or logs-on, pass?
•
 Language issues. Will the training be offered only in Ontario's two official languages or in the half-dozen most common languages in use in southern Ontario?

Part 3—Meetings and voting
There are a number of important changes in the how owner meetings are held; both AGMs and Special Meetings.

Preliminary Notice
At least twenty days prior to Notice of Meeting a Preliminary Notice needs to be sent to the owners. The board must use a standardized form. owners to submit information to potentially be included in the subsequent notice of meeting.

The Preliminary Notice must include:
•
 The purpose and projected date of the meeting.
•
 If the meeting is to elect a director, then:
a.)  the number of persons of which the board consists;
b.)  the number of positions on the board for election at the meeting;
•
 The notice must request that individuals interested in being candidates notify the board in writing of their intention to be candidates, their names, their addresses & the required disclosure info.
•
 If the meeting is to remove or appoint an auditor, the preliminary notice would need to provide that owners who wish to propose a candidate for auditor may notify the board in writing of the name and address of the candidate.
•
 The Notice must request that owners provide to the board any material they wish to include in the notice of meeting by a deadline identified in the Preliminary Notice. The board would not be obligated to include the material in the notice of meeting, unless the submission is made on behalf of the owners of 15% of the units.
•
 If the meeting is about the removal or appointment of an auditor, then owners who wish to propose a candidate for auditor may notify the board in writing of the name and address of the candidate.
•
 If the meeting is to vote on a proposed addition, alteration, or improvement to the common elements, a substantial change in the assets of the corporation, or a substantial change in a service that the corporation provides, then information about the proposed addition, alteration, improvement, or change, its cost, and how the corporation proposes to pay for it.
•
 The deadline for submitting information or material to potentially be included in the notice of meeting, discussed in Section B. above, and how and where to submit the information or material.

Requisitioned meetings
The proposed regulations would create a transitional rule requiring that the preliminary notice be sent only 15 days in advance of the notice of meeting, rather than 20 days, in the case of a meeting called pursuant to a requisition. This would give the board up to 5 days to prepare the preliminary notice of meeting after the board receives the requisition.

Submit information
The owners have 15 days to submit information back to the board. At the end of the 15 days, there has to be a minimum of one day before the Notice of Meeting is sent out.

Timeline
This is how I read the countdown:
Day 01
 Preliminary notice is sent.
Day 16
 Time required for owners to submit information.
Day 17
 A day between notices
Day 18
 Meeting package is sent out.
Day 33
 15 clear days between sending the Notice & date of the meeting.
Day 34
 The day of the meeting.

Management and the board will need to spend far more time preparing for the Annual General Meeting.

Notice of meeting
A Notice of Meeting needs to be sent using a standardized form. The notice must include the same information as the Preliminary Notice plus the materials that the owners proposed that:
a.) The board chose to include and/or
b.) The board was required to include (by a submission signed by the owners
     of 15% of the units.

Comments
I am not sure if the materials the owners proposed to be added to the agenda are solely for discussion or if they are to presented as motions to the meeting. The draft does not say.

The meeting
Finally we get to the meeting.

Quorum and voting
Quorum at turnover meetings and AGMs would be reached with:
a.) 25% of owners at the first and second attempts to hold the meeting; or
b.) 15% of owners at the third attempt and any subsequent attempts.

These changes would apply to any other meeting to elect directors and any meeting to appoint a new auditor.

Secrecy
The regulatory changes will provide that all condos in the province would have a standard by-law provision providing that no person voting by ballot or by proxy, through an instrument appointing a proxy, or through telephonic or electronic means, would be required to identify her or his name, or the unit number.

Concerns
Of course management will know who voted in favour of the incumbents and who are the troublesome owners. So if one side knows, why can't the other side have the same privileges?

Only a board described in Section 11(8) would be able to amend or repeal this standard by-law provision.

Concerns
The Draft doesn't say that the board's motion will have to be ratified by a vote of the owners.

Proxies
There will be mandatory proxy forms.

Board meetings
The proposal would allow boards to hold meetings using teleconference or any other communication system that allows for transmission in digital or electronic form (or similar means), as long as it allows the directors to communicate concurrently and if all directors agree to meet this way.

By-law voting thresholds
Absent a specific provision in the regulation, the threshold would be the owners of a majority of the units of the corporation

This lower voting threshold would apply to the by-law matters listed below.
1.
 To add information to be included in a periodic information certificate, an information certificate update or a new owner information certificate.
2.
 To specify more frequent time periods for sending a periodic information certificate.
3.
 To specify additional disclosure obligations and any related time periods for those additional obligations.
4.
 To govern the manner in which required information is presented at a meeting of owners, and identifying additional material to place before the owners at the meeting.
5.
 To govern the manner in which an individual may notify the board under clause 45.1 (1) (a) of the Act, and the manner in which an owner may provide material to the board.
6.
 To govern additional materials that are to be included in a preliminary notice or notice of meeting sent by the condominium corporation.
7.
 To specify the method of electronic communication the condominium corporation can use in relation to communication by the corporation.
8.
 To govern the manner in which an owner may be present at a meeting of owners or represented by proxy.
9.
 To allow for voting by telephonic or electronic means.

Retention of proxies, ballots, and unspecified records
In addition to the two primary retention periods mentioned above, proxy instruments, ballots, and recorded votes from meetings of owners would need to be kept for a minimum of 90 days from the date of the meeting.

For records that a corporation maintains but that are not specifically identified in the proposed regulations, the corporation would be required to keep them for whatever period the board determines is necessary for the corporation to perform its objects and duties or to exercise its powers.

Extensions of the minimum retention periods
In certain cases, the minimum retention period would be extended.

If the corporation receives written notice of actual or contemplated litigation relating to proxy instruments or ballots, and the corporation still has those records, the records would have to be kept until the dispute is abandoned or finally resolved.

If records are subject to a request for access from an owner, mortgagee or purchaser, and the corporation still has those records, those records would not be able to be destroyed until the request is abandoned or finally resolved.


Part 4—Record retention and access
 The Ministry thinks this will be proclaimed come autumn.

Minimum retention for proxies, ballots, and unspecified records
Proxy instruments, ballots, and recorded votes from meetings of owners would need to be kept for a minimum of 90 days from the date of the meeting.

For records that a corporation maintains but that are not specifically identified in the proposed regulations, the corporation would be required to keep them for whatever period the board determines is necessary for the corporation to perform its objects and duties or to exercise its powers.

Extensions of the minimum retention periods
The minimum retention period would be extended if
a.)
 The corporation receives written notice of actual or contemplated litigation relating to proxy instruments or ballots, and the corporation still has those records, the records would have to be kept until the dispute is abandoned or finally resolved.
b.)
 Records are subject to a request for access from an owner, mortgagee or purchaser, and the corporation still has those records, those records would not be able to be destroyed until the request is abandoned or finally resolved.

Access to Records
This is what many condo owners have been waiting for.

Hopefully, Access to Records will be proclaimed by Thanksgiving.

Purpose of record requests
A request for access to records by an owner, mortgagee, or purchaser must be solely related to that person’s interests as an owner, a purchaser or a mortgagee of a unit, having regard to the purposes of the Condominium Act.

While requesters would be required to declare that their request is solely related to their interest as an owner, a purchaser or a mortgagee of a unit, they would not be required to tell the corporation the purpose of their request.

Comments
I think that a general statement would suffice:
'My request is solely related to my interests as an owner of a unit in this corporation."

Process for accessing records
Four main steps:
Request:
 The requester would be required to send a request to a corporation using a standardized form, identifying the records being sought and how the requester prefers to access them (e.g., delivered by email or in hard copy, or examined in person).
Board’s Response: The board of the corporation would be required to the requester within 15 days using a standardized form, containing an itemized estimate of the cost, if any, of providing access to each set of records requested, and identifying any records or portions of records that will not be disclosed and the reasons for not disclosing them.
Requester’s  Response:
The  requester would be able to send back the standardized board’s response form to the corporation confirming which records she or he wants, along with payment of the estimated cost if any.
Access and Accounting: The corporation would be required to provide access to the requester, along with an accounting of the actual costs incurred in providing the access.

The timing and the costs associated with the request, would depend on whether the request is for “core” or non-“core” records. (See below for a summary of the differences between accessing core and non-core records.)

Although corporations would be able to charge costs for providing access to records within the limits summarized below, they would not be obligated to.

Comments
Who knew that the Ministry has a sense of humour. Of course the management company will make the owners pay and the maximum they can charge will become the standard floor price.)

The corporations and requesters would be able to agree to skip any or all of the above steps (and they would be able to make use of a standard non-mandatory form that would allow requesters to confirm that they waive their rights to the above steps).

Core records
The proposal would give requesters the right to access core records on an expedited basis at a reduced cost. Core records would include:
1.
 Current versions of the declaration, by-laws, rules and shared facilities or mutual use agreements;
2.
 The current fiscal year budget and any amendments;
3.
 The most recent financial statements approved by the corporation’s board and the most recent auditor’s report presented to the board (or to the audit committee, if any);
4.
 The record of owners and mortgagees  of the Condominium Act);
5.
 The record of notices relating to units that are leased
6.
 Information certificates that were sent or required to be sent to owners within the 12 month period preceding the records request;
7.
 Minutes from any owner or board meetings held after the proposed new regulations come into force and within the 12 month period preceding the records request;
8.
 The most recent reserve fund study plan;
9.
 Any other record that a by-law specifies as a core record.

Concerns
For #8, the owners should be able to get a copy of the complete Reserve Fund Study and not just the costs spreadsheet.

The timing and costs for core records would differ depending on the form in which the requester agrees to have the records delivered.

Request for electronic delivery
If the requester requests or agrees to obtain copies of core records in electronic form, the corporation would not be able to charge for providing the records (although the corporation could still choose to deliver the records to the requester in paper form, if they are not already kept in electronic form).

The corporation would need to deliver the records within 15 days of receiving the request for records. This means that the record would be delivered at the same time as the board’s response.

Request for paper delivery
If the requester does not agree to delivery of records in electronic form,  then  the  corporation would only be able to  charge for copying/printing costs. The paper copies would need to be delivered or made available for pick up within seven days of the corporation receiving the requester’s response along with payment of the estimated allowable copying cost.

Request for examination in person
If the requester asks to examine core records in person, then the corporation would only be able to charge labour costs for examination, and copying and printing costs. The records would need to be made available for examination within seven days of the corporation receiving the requester’s response along with payment of the estimated allowable costs (Step 3 of the process). The requester would also be able to agree to electronic delivery as a form of examination, if the records are kept in electronic format.

Process for accessing non-core records
For non-core records, the same four steps described above would apply. The corporation would be obligated to provide access to the records within 30 days of receiving the requester’s response from the requester, along with the requester’s payment of the estimated allowable costs. Costs would be limited as summarized below.

Limits on the costs
Corporations would be able to charge costs for providing access to records within the limits summarized below, but would not be obligated to charge these full amounts. Note that requests for core records are subject to additional limits on allowable costs.

Printing/copying costs
For printing/photocopying costs, the corporation would be able to charge a maximum 20¢ per page. The proposal would also make clear that if the requester wishes to examine records (rather than obtain copies), and the records are maintained in electronic form, the requester could accept delivery in electronic form or pay to have them printed or copied for examination or delivery.

Labour and delivery costs
The corporation would only be able to charge a fee for labour or for delivery of the records if the fee is reasonable and will reimburse the corporation for the actual costs incurred by the corporation in providing access to records.

Concern:
I see the courts having to decide what fees are reasonable.

Accounting:
If the actual cost is more than the estimated cost that the requester paid (when the requester submitted the requester’s response), the requester would be obligated to pay the amount of the difference to the corporation, but only up to 10% above the estimate.

If the actual cost is less than the estimate, the corporation would reimburse the requester for the full difference. (I wonder how often we will see this?)

Delivery and communication
Requests would be sent to the address for service for the corporation or the corporation’s manager, or at another address that the corporation’s board designates for receiving record requests (for example, an email address). Any address for receiving record requests would need to be included in the proposed Information Certificates sent to owners.

The standardized request form would allow requesters to specify a delivery option for the records. The corporation would not be obligated to provide records in electronic form if those records were not maintained in electronic form.

Concerns
Not happy about this loophole. Board/management can hit the owner with excessive costs for printing and slow down access by forcing a complaint to the Tribunal or to Small Claims Court.

When providing records electronically or in paper copy in response to a request, each record would need to be separately identified by the corporation.

Abandonment
Requests for records would be deemed to be abandoned if:
1.
 Within 60 days of receiving the board’s  response, the requester does not return the Requester’s Response or start an application at the Condominium Authority Tribunal (if the Tribunal has been set up to receive disputes related to records requests) or in court (if the Tribunal is not established).
2.
 If within six months of submitting the initial request, the requester does not start an application at the Condominium Authority Tribunal (if the Tribunal has been set up to receive disputes related to records requests) or in court (if the Tribunal is not established).

Exemptions from access
Although records relating to specific units or owners cannot be disclosed, this would not apply to records relating to persons in their capacity as directors or officers of a corporation.

The proposal provides that requesters would not have a right to access the e-mail addresses (or other methods of electronic communication) agreed to by owners or mortgagees for the purposes of receiving notices from the corporation, unless those owners or mortgagees agree to such access.

The proposal provides that requesters would not have a right to access reports or opinions from lawyers or licensed paralegals to the corporation

Requesters would also not have a right to access any portion of a ballot or proxy form that identifies specific units in a corporation or owners in a corporation (unless a by-law provides otherwise).

Concerns
I see the inability to view proxies encouraging election fraud.
It shows just how important it is to have by-laws that encourage open and transparency and how by-laws can be used to keep the owners in the dark.

Penalty for non-compliance
A corporation that, without reasonable excuse, does not permit an owner, a purchaser, or a mortgagee of a unit or an agent of one of them (who is duly authorized in writing) to examine or to obtain copies of records would be subject to a penalty up to a maximum of $5,000.

Concerns
I see multiple legal battles deciding what is a "reasonable excuse". Since this Act may be with us a long time, a maximum penalty of $25,000 (the same maximum as Small Claims Court) would have been more reasonable.


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