A director qualifications by-law

A board of directors at a north Scarborough condo added a new Director Qualifications by-law to the agenda of their June 2014 AGM.

This by-law, which was drafted by the corporation's lawyer, had four major items that the board wanted adopted.

1.	All directors had to be a registered owner.
2.	Any director who missed three regularly scheduled board meetings in a row, without a valid excuse, ceases to be on the board.
3.	All directors had to sign the CCI Code of Ethics.
4.	Any director who violated the Code of Ethics on two occasions can be removed from the board after a hearing by a resolution passed by the majority of the directors.

There were a couple of reasons why the board wanted this new by-law.

One director left the country for a few months and when he returned, he saw that the remaining four directors had replaced several contractors and had gone on an aggressive spending spree. A healthy surplus in the operating fund had became a growing deficit.

He made it clear that he was not in agreement with the direction that the board and the property manager were taking the corporation.

Can lien a director's unit
The troublesome director was a resident in a unit that was owned by his parents. So this was a second way the other directors thought they could get him off the board.

if only owners are directors we can lien their units

When an owner asked why it was important for a director to be an owner, the property manager replied that owners are more responsible than renters and if only owners are directors we can lien their units if they are liable.

The removal process
One of the candidates running for the board hired a lawyer, experienced in condominium law, to attend the AGM to speak against the proposed by-law.

(As an aside, the majority of directors wanted to eject the lawyer and me from the meeting but since we had valid proxies, they could not do so.)

The lawyer asked the property manager, who was chairing the meeting, if there would be a process that the board would be using for removing a director. He said no and that the process could be changed on a whim.

When the lawyer protested, the chair told him if he had any concerns he could call the corporation's lawyer.

The outcome
The motion to pass the Director Qualifications by-law failed by a large margin.

The two sitting directors lost the election and the new majority on the board instructed the management company to immediately replace the manager.


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