Reasons for By-laws – Follow-up to most recent DHA Condo Crunch
Reasons to Consider a By-Law or By-Law Amendment
As promised at our June 24 “Condo Crunch”, I’m pleased to reproduce my slides (from the Condo Crunch) setting out our “Reasons for By-laws or By-law Amendments”.
I. Update Provisions which are Out of Date
- Provisions which state that owners’ meetings can be called on 10 days’ notice
- Provisions which state that owners’ meetings can be requisitioned by owners of 20% of the units
- Provisions which state that voting is on the basis of the owners’ proportionate shares
- Provisions which state that the Corporation can make investments permitted by the Trustee Act.
- Provisions which state that AGMs must be held within 15 months of the previous AGM Provisions which state that the quorum for a meeting of owners is one third of the units
- Provisions which state that proxies can be general (ie., for more than one meeting)
- Provisions which state that Directors can be removed “by a majority vote”
- Most old provisions dealing with Directors’ conflicts of interest
- Provisions which list duties of the corporation which are not consistent with the corporation’s duties as set out in the Declaration or the Act
NOTE: Generally speaking, we recommend against including provisions in the by-laws which are unnecessary or simply repeat provisions of the Act. This can be a source of confusion if the Act is subsequently amended. In some cases, repeating provisions of the Act, in the by-laws, can be useful for information purposes, but we normally recommend that this be minimized.
II. Delete Provisions which are Bad or Unhelpful
- Provisions which provide for “Protection of Directors”
- Provisions which call for Indemnification of the Directors (which is good) but which are not worded in accordance with the Act (which is bad, because the indemnification provision may not be effective)
- Provisions which require management contracts to be ratified by by-law
- Rules which are included as part of a by-law (for example, a schedule to the by-law)
- Provisions which purport to say that budgets must be approved by vote of the owners
- Provisions which do not allow for special assessments or which require votes of the owners to permit special assessments
III. Add “Helpful” provisions
- Provisions for Indemnification of the Directors in accordance with the Act
- Provisions for interest on arrears of common expenses
- A provision stating that payments from an owner are always applied to the earliest arrears
- Provisions for the “staggering” or “leap-frogging” of the terms of Directors
- Provisions adding the qualification that Directors must be owners
- Provisions adding other qualifications for Directors
- Provisions stating that the Board can demand payment of common expenses by post-dated cheque or such other means determined by the Board (for example, pre-authorized payments)
- Improved provisions respecting chairing, and respecting who may attend, meetings of owners
- Improved provisions respecting the method of voting at meetings of the owners (Note special requirements in Act)
- Improved provisions respecting Notice (to conform to both the Act and the Declaration)
- Provisions allowing the corporation to lease parts of the common elements (not including exclusive-use areas)
- To restrict the use and enjoyment that non-residents may make of the common elements
- Enhanced provision respecting Unit Inspections
- Requirement for Notice to the Corporation in relation to symptoms, defects
IV. 2017 Revisions to the Act (lower vote required for these by-laws)
- To add information to be included in a periodic information certificate, an information certificate update or a new owner information certificate.
- To specify more frequent time periods for sending a periodic information certificate.
- To specify additional disclosure obligations under subsection 29 (1) (f) and 29 (2) (f) of the Condominium Act, and any related time periods for those additional obligations.
- 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.
- 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 under clause 45.1 (1) (b) of the act.
- To govern additional materials that are to be included in a preliminary notice or notice of meeting sent by the condominium corporation.
- To specify the method of electronic communication the condominium corporation can use in relation to communication by the corporation under the Condominium Act and the accompanying regulations.
- To govern the manner in which an owner may be present at a meeting of owners or represented by proxy.
- To allow for meeting and voting by telephonic or electronic means under s. 52(1)(b)(iii) of the Condominium Act.
- To specify additional records that must be maintained and to increase required retention periods.
V. Other Reasons (not a comprehensive list)
- Establish a standard unit description (mandatory for condos declared before May 5, 2001)
- Amend a standard unit description
- Authorize borrowing
- Authorize the corporation to appeal realty assessments
- Authorize Director’s remuneration
- Extend Owner’s Obligations in relation to deductible losses under Corporation’s insurance
- Regulate modifications to the common elements by owners – including the requirement for agreements between the corporation and the owners for each such modification
- Require that the directors and officers liability insurance be on terms to protect all past directors
- Establish procedures for mediation of disputes between the corporation and the owners
- Increase or decrease the size of the Board
- Authorize easements or licenses through the common elements (or release of easements)
- Authorize leases of common elements
- Provide for special maintenance arrangements
- Add to the required perils for which the corporation must arrange insurance
- Adopt occupancy standards (Section 57)
- Provide for allocation or re-allocation of parking spaces
- To Clarify – but not amend – the Declaration
Stay tuned to Condo Law News to keep up to date on the latest developments in Condominium Law!