Is Your Condo Counting Special Resolutions Properly? Bill 19: Changes to Voting Procedures
Following publication of our last post, “Cutting More Red Tape: Long-Awaited Clarity on Legal Costs, Voting for Condominiums (you can read it here), I have received numerous inquiries from condo owners and property managers on how Bill 19 and proposed amendments to the Condominium Property Act will impact special resolution votes for condominium corporations in Alberta.
The predominant concern appears to be that the proposed legislative amendments will create confusion, not clarity, and that passing special resolutions will be made much more difficult and costly in terms of imposing additional administrative requirements. Many of these inquiries have also assumed that calculating the result of a special resolution vote is based on the total number of units in a condominium. As I will explain, this is incorrect.
A special resolution is defined in the Condominium Property Act as a resolution:
(i) passed at a properly convened meeting of a corporation by a majority of not less than 75% of all the persons entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units, or
(ii) agreed to in writing by not less than 75% of all the persons who, at a properly convened meeting of a corporation, would be entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units;
Bill 19 will not make any changes to this existing definition or have any impact on special resolution votes. A special resolution has always been based on the total number of persons entitled to vote, as well as the total unit factors for the corporation (in every case in Alberta, the latter is 10,000). If your condominium has been calculating special resolutions based on the total number of units that submitted ballots or cast votes, and then dividing this figure by the total number of units in the property, it has been calculating the special resolution results incorrectly.
Further, the proposed amendments under Bill 19 – if passed – will only affect ordinary resolutions conducted at general meetings of the corporation. There has long been confusion over how to calculate votes conducted at condo owners’ meetings. The two common terms used in the Schedule 4 bylaws under the Condominium Property Regulation, and which are replicated in most condo corporations’ bylaws, are votes by a show of hands and by a poll. Unfortunately these were never defined in the legislation, and there has been a lot of debate among condo lawyers on various issues related to these concepts. For example, is a person who owns more than one unit entitled to multiple votes, i.e. one vote for each unit owned? Another common question is how are votes by co-owners to be counted? Is each co-owner entitled to one vote, or to one vote between them?
Bill 19 addresses this confusion by introducing two new terms to better define what is meant by a show of hands and a poll vote. The new terms are, respectively, “owner vote” and “unit factor vote”. An “owner vote” means a vote on the basis of one vote per unit owner, whereas a “unit factor vote” simply means a vote on the basis of the unit factors for a particular owner’s unit. These are proposed as the new default methods of voting at a general meeting unless the condo corporation’s bylaws provide otherwise, and are defined as follows:
In the case of an owner vote, where a unit is owned by more than one person, each person is entitled to one vote.
Where a person owns more than one unit, that person is only entitled to a single vote for all the units he or she owns, and is not permitted to assign proxies to multiple persons.
In the case of a unit factor vote, where a unit is owned by more than one person, each owner’s vote represents only that portion of the unit factors for the unit equal to the portion of the unit owned by that person.
If a co-owner does not attend a general meeting at which a unit factor vote occurs and has not assigned his or her proxy, that co-owner’s share of unit factors are not counted in determining the results of the vote.
For many condo corporations, nothing will change if the amendments in Bill 19 come into force and become law. But all condo corporations should review their bylaws and their voting procedures in order to ensure and/or bring them into compliance with these new provisions if and when Bill 19 is passed.
Some helpful tips:
Condominium corporations must maintain current owner lists and update these periodically whenever there are any changes.
Requests for estoppel certificates and written notices received from mortgagees are indicators that there are pending transfers or other dealings with a unit such as a sale or foreclosure. When these occur, the condo corporation should monitor the situation and update their owner list accordingly.
At least once a year, condo corporations should request that all owners provide their updated contact information so that the owner list can be kept accurate and current.
Although it is the unit owner’s responsibility to keep the condo corporation informed whenever there are changes in the ownership of the unit or to the owner’s contact information, following these steps should help condominium corporations remain reasonably certain that their owner list is kept as accurate as possible. This may avoid the need to obtain certificates of title in advance of every annual or other general meeting. However, and given the importance of special resolution votes to every unit owner, we recommend that the condo corporation obtain current unit titles from the Land Titles Office in advance of every special resolution vote to be conducted.
We hope this clarifies the voting changes being proposed under Bill 19. If you are a condo owner, board member or property manager and you have questions about these changes or any other matter affecting your condo corporation, please contact us. Please note that Bill 19 is not yet in force, and is still subject to change.
For a link to orignal post and additional comments please click here
Reposted with permission of the author.
Title Image “Liip team meeting” by lejoe is licensed under CC BY 2.0.