By: Michelle Kelly -
One of the busiest times of year for annual general meetings (“AGMs”) normally begins in mid-April and lasts until the end of June. This period of time is normally when condominiums with December 31 year-ends hold their AGMs. Unfortunately, many condominiums have been unable to hold their AGMs due to COVID-19. Often the directors felt like they were being forced to decide which way they wanted to contravene the Act: hold the AGM using virtual meetings even though the condominium did not have a by-law permitting virtual meetings, or postpone the AGM and contravene the requirement to hold the meeting within six months of the fiscal year end. Not an ideal situation.
Fortunately, on Friday April 24, 2020, the Ontario government issued an Order to provide some temporary relief to condominiums struggling to make these tough decisions. The Order makes various amendments to the Condominium Act, 1998, with respect to meetings of the owners and of the board to make it easier to hold virtual meetings. A copy of the order can be found here: https://files.ontario.ca/solgen-oic-meetings-for-corporations.pdf
Directors Meetings – Virtual Meetings
Subsection 35(5) of the Condominium Act, 1998, currently allows meetings of the directors to be held by teleconference or another form of communications system that is prescribed if all directors consent to using the means to hold the meeting. The Order made on April 24, 2020, removed the requirement for consent. Notwithstanding such, the directors should discuss the means in advance and ensure that all directors are able to participate in a meaningful way during the meeting.
All Owners Meetings – Virtual Meetings
The Order makes various changes to the Act to temporarily permit condominiums to hold virtual owners’ meetings (AGMs, requisition meetings, turn-over meetings, and other special meetings) without by-laws approving such:
Quorum: An owner or mortgagee who votes at the meeting or establishes a “communications link to the meeting” counts toward quorum (either: 1) in person if they vote or attend the meeting, or 2) by proxy if another person votes or attends the meeting on their behalf).
Voting: Voting can be by show of hands or a recorded vote. A recorded vote may be marked on a ballot, a proxy, or using telephonic or electronic means.
Service: Despite any other provisions of the Act, regulations, declaration or by-laws, any document or notice that is required to be given to an owner or mortgagee in respect of a meeting under the Act may be given by electronic means without the agreement of the owner or mortgagee.
Meeting Package: Any materials required or permitted to be placed before the meeting of owners (i.e. audited financial statements) may be placed by electronic means.
“Electronic means” is any means that uses electronic or technological means to transmit information or date, including fax, e-mail, computer or computer networks.
Postponing Annual General Meetings
Subsection 45(2) of the Act requires the AGM to be held within six months of each fiscal year-end. This requirement was suspended by the Order. If the last day on which the meeting can be held within the six month period (the “AGM due date”) is within the period of the declared emergency the condominium will have an additional 90 days after the emergency is terminated to hold the AGM. If the AGM due date is within 30 days following the termination of the declared emergency the condominium will have 120 days after the termination date to hold the AGM.
The suspension of the requirement to hold the AGM during the period of the emergency will be of great assistance to some condominiums. For instance, if the auditor is unable to prepare the audited financial statements and report during the pandemic the condominium can postpone the AGM until the emergency is over. This allows the auditor time to complete the audit and the condominium would hold the meeting within the 90 or 120 day period (whichever applies to the situation). Postponing the AGM might also be a good option if there is concern that many owners will be unable to participate in a virtual meeting due to technological concerns (i.e. do not have personal computers at home or not familiar enough with the technology) or disabilities (i.e. the virtual meeting does not have accessibility capabilities for people with vision or hearing loss).
Notwithstanding the suspension of the AGM requirement, many condominiums may wish to continue to hold their AGMs using virtual means, as described below. There is uncertainty as to how long the emergency or pandemic could last. Some owners might not feel comfortable with the same directors continuing in power indefinitely and want to hold an election. On the other hand, some directors may not want to continue to be directors as their terms were set to expire at the AGM. Another benefit might be that the Order gives condominiums the opportunity to “test out” virtual meetings before amending the by-laws to allow for virtual meetings and electronic voting. Alternatively, use the temporary lifting of the by-law requirements to hold a virtual meeting to pass a by-law allowing virtual meetings and electronic voting for future meetings. Finally, many of the virtual meeting systems make it easy for the chair to control the meeting. This could be useful for condominiums where one or two of the owners tend to disrupt the meeting with inappropriate behaviour or accusations. The chair can simply mute them and allow the others to ask questions.
Meeting Already Scheduled?
Finally, it is important to note that the Order also states that if a notice of meeting has already been given to the owners for a meeting that falls within the declared emergency and the date, time or place is changed “in order to hold the meeting by telephonic or electronic means” another notice of meeting is not required. The condominium must inform the owners of the change in a manner and within a time that is “reasonable in the circumstances.” Again, like many requirements of the Act, be reasonable and you should be fine.
If you have questions about how to hold an owners’ meeting via electronic or telephonic means reach out to the condominium’s lawyer. Many lawyers have accounts with different services that facilitate virtual meetings, such as Zoom, GoToMeeting, and Microsoft Teams.