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‘New Condo Act’: Directors’ Qualifications and Disclosure Obligations

Bill 106 was introduced at Queen’s Park on May 27, 2015. If adopted, it will introduce sweeping changes to the governance and management of condominiums in Ontario.  Since the introduction of this Bill, we have been blogging on the proposed amendments.  In this post, we analyse what changes may be made to the qualifications and obligations of condo directors.

The basic qualifications required to be a condominium director would not change under the proposed modifications.  Condo directors would still be required to be individuals (as opposed to corporations), be at least eighteen years of age, be capable within the meaning of the Substitute Decisions Act and not be an undischarged bankrupt.

However Bill 106 proposes to impose mandatory training on all condominium directors.  It is not clear at this stage what training would be required, who would provide such training and how frequently such training would have to take place. It is not clear either whether individuals who have already attended courses such as those offered by the Canadian Condominium Institute (“CCI”) would be exempt from this new training requirement.  We will have to wait for regulations to be adopted to know more on this.

The proposed changes also contemplate imposing on directors new disclosure obligations.  We will have to wait for the adoption of regulations to know exactly what directors will be required to disclose.  We know already that directors would need to disclose their address to the corporation when they advise of their intention to run for election.  This information may find its way to the owners or to the new Condo Registrar.  As for any additional disclosure requirements, we can only speculate on them.  We can easily imagine that directors may be required to disclose the existence of any conflict of interests with the corporation and whether they are engaged in litigation against the corporation.  Some have speculated that directors may be required to disclose the existence of a criminal record. At this stage, however, this is speculative.  We will have to wait and see.

While the adoption of a code of ethics is contemplated by Bill 106 for property managers, the Bill does not impose such a requirement on condo directors.  Corporation can still provide for this if they wish to implement the adoption of a mandatory code of ethics. It is worthy of note that, under the proposed changes, corporations could still adopt by-laws governing the qualification, resignation and removal of directors.  This will leave corporation with some leeway and control over the qualifications they want their directors to have.

While additional training and transparency is a good thing, one must wonder if such additional requirements may dissuade certain individuals from serving on condominium boards. This would be unfortunate considering how difficult it already is to convince owners to get involved.

Until our next blog on Bill 106, you can read our initial blog summarizing the proposed amendments to the Condominium Act or our blog on the proposed Condominium Authority and Tribunal.

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