HE CONDOMINIUM ACT, 1998
SECTION 51(6)
THE OWNER-OCCUPIERS’ REPRESENTATIVE ON THE BOARD OF DIRECTORS


51(6): If at least 15 per cent of the units of the corporation are owner?occupied units on or after the time at which the board is required to call a turn?over meeting under section 43, no persons other than the owners of owner?occupied units may elect a person to or remove a person from one of the positions on the board.

Qualifies for the G.I.L.P. Award:
Good Intentions, Lousy Plan
Intention:

This new section of the Act ensures that at least one Board member is elected by resident-owners only.
This is meant to counter-act the ability of a multiple-unit owner (or owners) to control the voting results in an election (or removal) of directors, to an extent that affects all available positions. This is presumably aimed at a declarant (developer of the condominium corporation) who owns a block of unsold/unclosed units at the time of the “turnover meeting” required under section 43 of the Act, and who may continue to own some or all of that block at subsequent annual meetings. Another potential target is any person or group owning a block of units for investment purposes, but not himself or themselves residing within the corporation.

Reality:
  • Most Boards that I’ve encountered are made up of five positions, though I’ve seen some “sevens” and a couple of “threes.” Whatever the case, the owner-occupiers’ representative is outnumbered. Given this minority position (most often a one-out-of-five scenario), we are tempted to question the value of section 51(6), other than to provide a Board member who would act as a conduit of information to the owner-residents, communication which might not otherwise be encouraged by the remaining Board members.
  • Section 51(6) requires a multiple-election process at annual general meetings, or at least every third one (assuming there’s only one vacancy at that third meeting – good luck). Two votes, two ballot counts, two breaks in the action, two helpings of coffee and doughnuts, bigger waistlines – it just goes on and on.


  • Under 51(6), this multiple-election business would continue in perpetuity, notwithstanding the fact that most or all of the condominium corporation’s may well be owner-occupiers. So in a twenty-year-old condominium, for instance, this time-wasting and frustrating process is necessary under 51(6), even though there may be only a few (or no) non-resident owners.

Solutions Under Consideration:

The Canadian Condominium Institute Legislative Committee is on the case, as they are with numerous other sections of this Act. There’s no way to predict at this writing (March, 2006) how the government will respond to the Committee’s input.

However, (with thanks to Mr. Armand Conant, a key member of the Committee), I’m able to tell you that a couple of proposed solutions have been suggested:

  1. Replace the words “…at least 15 per cent of the units…” with, for instance: “…less than 80 per cent of the units…” This, or some similar percentage, would eliminate the requirement for two different elections in the vast majority of condominium general meetings. If, in this example, a declarant still owned 30 percent of the units, the extra election would be not only necessary under the law but also desirable, even if only for the sake of “optics.”
  2. Amend section 51(2), which now provides for one vote per unit, to read one vote per owner (regardless of how many units owned). In other words, eliminate block voting.


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Above and beyond all this, it should be remembered that, in spite of everyone’s best intentions, the election of an owner-occupier representative on the board does not cure the problems which result from a declarant’s retaining control of the board following the turn-over meeting.

Alan Rosenberg
A. R. Consulting

March 30, 2006

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Alan Rosenberg is President of A. R. Consulting, who provide a variety of advisory services to Toronto area condominium directors. Alan’s long, rewarding career with a large condominium management company, most notably as Vice-President, included client liaison and counselling, legislative advice, financial reporting, creation of maintenance specifications, organizing building inspections, and editing of newsletters and other communications materials.

A. R. Consulting now assists condominiums in radically improving their own management situations. Alan’s comprehensive investigative and interviewing methods are renowned throughout the condo community.

E-mail: ar@condominiumconsulting.ca
Phone: 416-932-9510; Fax: 416-932-9769




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