The need to change the by-laws
“If Washington were President now, he would have to learn our ways or lose his next election. Only fools and theorists imagine that our society can be handled with gloves or long poles. One must make one's self a part of it.

If virtue won't answer our purpose, we must use vice, or our opponents will put us out of office, and this was as true in Washington's day as it is now, and always will be.”
—Henry Brooks Adams

Condominiums are private non-profit corporations so when there is an election, they do not have to follow the same rules and regulations as our political elections. Nor do they have to follow the same procedures as our trade unions, service clubs or any other condo corporation.

The board can be arbitrary and underhanded as long as they follow the Act and the corporation's by-laws. However, they cannot blatantly violate democratic principles to that the process and results could be successfully challenged in the courts.

How do they get away with it?
This can be explained in two words. Apathy and ignorance among the owners.

When the incumbent directors at one Etobicoke condo were worried about being unseated at the next AGM, they passed a new by-law changing the requirements to be a director.

One change was to prevent anyone who was in a legal dispute with the condo corporation from being a director. The owners were told this was to prevent a conflict of interest.

Of course they had certain individuals in mind. The board sued all the members of the previous board. Therefore as long as the court application was active, none were eligible to run for election.

A second change, By-law # 5, stated that all directors had to reside in the corporation. This change was designed to prevent a couple of owners, who owned several units but did not live in the building, from ever being re-elected to the board.

This is quite the by-law. It is clearly designed to take the right to serve on the board away from certain owners to benefit the incumbents. Another great victory for the enemies of democracy.

It made me think of this spoof in The Onion.

One difficulty was that By-law #5 had to be ratified by the owners. How that horse apple was stick-handled past the owners at an AGM is described in the previous chapter.

Existing election by-laws
Most owners have not read their by-laws and even those who have, largely ignore their condo's election by-laws. Anyone who is thinking of running for the board must read and understand their election by-laws.

Anti-democratic by-laws
Some boards will attempt—and many succeed—in passing anti-democratic by-laws so they will retain power.

A by-law may state that only owner-residents are eligible to be a director. This prevents owners who lease out their units from being on the board. They must pay their monthly assessments (taxes) but have no say in how their money is spent.

Some condos have a by-law stating that if a director runs afoul of the majority of directors, the rest of the directors can kick the "troublemaker" off the board.

The by-law may read as below:
Acknowledgment & Direction:
I, the undersigned, understand that, in addition to satisfying my standard of care as prescribed by the Act, as a director I must always act in the best interests of the Corporation.  In this regard, 1 acknowledge that the provisions within this Directors' Code of Ethics forms an important and integral part of establishing the care and responsibility that I as a director of the Corporation am entrusted to fulfill. Accordingly if it is determined that I have violated the provisions of the Directors' Code of Ethics on three (3) occasions over the course of my term, in accordance with Section 6.03 of the Corporation's By-law No. 6, then I understand that I will cease being qualified to be a director of the Corporation and accordingly forthwith tender my resignation, failing which it shall be deemed to have been given. I understand that this requirement is applicable to all directors of the Corporation and hereby agree to same.

That keeps the minority directors in line. However, what about the disgruntled owners.  To keep them in line, one condo law firm adds this wording in the by-law packages they sell to condos.

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, newsletters, 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.

In other words, the majority of directors can vote to shutdown any form of communications used by a group of owners to communicate to the other owners. This censorship is backed by the threat of expensive legal fees which may be collected by a lien placed on their units.

top  contents  chapter  previous  next