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.