Bill 106 (the Act aimed at amending Ontario’s Condominium Act and other condominium-related legislation) is still before the Standing Committee on Finance and Economic Affairs. This Committee held two public hearings recently, on October 22 and 29, 2015. With the benefit of these additional public consultations, and of any written submissions which were to be received by October 29, 2015, the Committee is scheduled to study the Bill, clause by clause, on November 5, 2015.
In the meantime, here is our post on how this new Bill, if passed in its present form, will affect how condominium corporations will treat and disclose their corporate records.
The proposed modifications would clarify and provide a more complete list of what constitutes a record of the corporation. It would also allow corporations to keep their records on paper or in electronic format (welcome to this century!). Finally, it would indicate the length of time during which corporations are to retain records, although the details of this have yet to be clarified through the adoption of regulation. What we know for now is that financial records would have to be kept for at least six years following the end of the fiscal year.
Proxies would no longer be treated differently from other corporate records. Presently, under the current Act, proxies (but not voting ballots) must be kept for a period of 90 days. Under the new act, both the proxies and the voting ballots would form part of the corporate records (gone are the days where voting ballots would be destroyed by motion at the end of the AGM). We will have to wait for regulation to be adopted before knowing how long the proxies and the voting ballots will have to be kept for.
The process by which an owner can access and get copies of corporate records appears to also be slightly simplified by the proposed Bill. An overly technical approach under the current Act appeared to impose on owners the obligation to first inspect the documents prior to requesting a copy of same.
It is interesting to note that the penalty for a corporation who refuses to grant access to its records without a reasonable excuse may jump from $500 to (up to) $5,000. The fees a corporation could charge an owner to examine or obtain copies of the corporation’s record would also likely be set by the province – and potentially not by the corporation anymore.
The exceptions to an owner’s right to access corporate records remain similar to those present under the current legislation. Under the current Act, an owner cannot automatically access records relating to employee of the corporation, records pertaining to actual or pending litigation or to insurance investigation or record relating to other owners.
Corporations’ Reporting Obligations
Albeit slightly unrelated to the above, the proposed Act would impose on condominium corporations certain reporting obligations. Indeed, under the proposed Act, corporations would be required to file annual returns with the Condominium Registrar. The exact content of what would be required to be included in these reports has yet to be fixed by regulation. Presumably, this report could (and likely would) include information about the corporation, such as its address of service, the number of units, who is on the board, whether the corporation is involved in litigation and other similar relevant information. We also know already that corporations would have to report any changes to the composition of the board of directors, whether as a result of election, removal, resignation or vacancy. These records would be accessible to the public.
While this kind of reporting would be new to the condominium industry, similar reporting obligations already exist to some extent for corporations at the provincial and federal level.