Spring
is often AGM season in the condominium industry but as we all are experiencing,
spring 2020 brings with it unprecedented challenges and public health concerns.
Condominium managers and boards of directors will need to find creative
solutions to meet new and unique challenges.
While
subsection 45(2) requires an AGM to be held within six months of the end of
each fiscal year, we do not recommend continuing with the AGM as planned during
the COVID-19 pandemic. Public health recommendations prohibit gatherings of
more than (5) five people and (unless there is a corporations with few units or
most units are represented by proxy) for most corporations continuing with the
AGM would not conform with current public health recommendations. In my view,
it would also be a breach of Section 117 (dangerous conditions) to hold the AGM
as a corporation would normally hold it with in person attendance. Even for
condominium corporations that have sent out a Preliminary Notice of Meeting or
a Notice of Meeting, we do not recommend proceeding with business as usual.
That
leaves condo corporations with two viable options:
- Postpone
the AGM until public health officials advise that it is safe to resume
normal activities and hold large gatherings of people; or
- Make
arrangements to conduct the AGM through teleconference, videoconference or
other remote participation options.
Most
corporations do not have the explicit authority to proceed with an AGM by
electronic participation: newer by-laws often permit electronic participation
for Board meetings but not AGMs. It is our view that this would be
justifiable as a last resort in the face of current public health concerns and
in consultation with legal counsel after reviewing the corporation’s particular
by-laws. Even if electronic participation was selected, we would still suggest
that the decisions of the owners at the AGM be ratified and approved by the
owners at the next AGM that is normally called.
Even
though electronic participation may be possible, the particular community may
not be open to this option and the level of electronic participation will
vary depending on their access and familiarity with technology. In those cases,
postponement may be the preferred option. If the Board does decide to postpone
the AGM, we recommend that, the Corporation communicate this decision to all
owners enclosing the financial documents and providing a brief outline of what
would typically be presented at an AGM.
The
CAO has also provided recommendations to Corporations, which can be found at
this link:
https://www.condoauthorityontario.ca/en-US/condominium-living/meetings-voting/owners%E2%80%99-meetings-during-the-covid-19-pandemic—creating-a-new-by-law-to-allow-for-telephone-or-elec/.
As noted by the CAO, it is possible to rely on
proxies to hold an AGM, while complying with public health recommendations.
Using a proxy approach, the Corporation would limit the number of persons able
to be appointed as proxies to minimize the number of owners physically present
at the meeting to no more than five (5) individuals. While this proxy approach
may be useful to pass a by-law that is urgently needed by the Corporation,
restricting the number of individuals at the meeting to no more than five (5)
individuals severely restricts an owners’ ability to effectively participate in
the meeting; campaign for a seat on the Board; ask questions, or raise
concerns.
In
my view, unless there is some pressing reason for the Corporation to call and
hold an AGM during the pandemic (i.e. to pass a by-law that is urgently needed
or a meeting requisitioned by the owners), the postponement of the AGM may be
the preferred option. The current Board can continue to act on behalf of the
Corporation during the pandemic. For directors whose terms have expired,
pursuant to subsection 31(2), those directors may continue to act until a
successor is elected. In my view, it will be challenging for unit owners to
campaign for a seat on the Board or solicit proxies until these public health
restrictions are lifted.
