Two weeks ago, we blogged about the Periodic Information Certificate. This week, we discuss its little brother: the Information Certificate Update. When is one due and how do they work?
Types of Information Certificates
Under the newly adopted amended Condo Act, condo corporations have to regularly send out the following three types of Information Certificates:
- The Periodic Information Certificate (PIC)
- The Information Certificate Update (ICU)
- The New Owner Information Certificate (NOIC)
The purpose of these Certificates is to give owners an update on the status and financial health of their corporation. An “improved” Status Certificate of kinds.
We already blogged about the Periodic Information Certificate. In particular, we provided our readers with a useful chart showing the deadlines by which each corporation must sent its PICs out. Indeed, the deadline varies for each corporation since it is based on the end of the fiscal year of the corporation.
The Information Certificate Update
This week, we blog about the Information Certificate Update (the “ICU”). The purpose of an ICU is to update owners when certain important changes take place at the corporation. That way, owners are informed of these changes in a timely fashion rather than having to wait until the next PIC, which could be 6 months later.
What changes trigger an ICU?
An ICU must be sent to owners when any of the following changes occur:
- a change in the directors or officers of the corporation [more on this further below];
- A change in the address for service of the corporation, of the directors or officers or of the management provider;
- A change of the address at which a request to examine records can be made;
- A change in the method of electronic communications the corporation will use when notifying owners (this applies only to owners having consented to electronic notification – we will blog about this);
- A change in the amount of the insurance deductible;
- If the corporation’s insurance is terminated; and,
- If the board lose quorum as a result of a vacancy having arose on the board.
The Corporation may with a by-law add other circumstances triggering an ICU.
What does the ICU looks like?
Good news! Corporations must use the ICU provided by the Minister. Here is a link to the fillable form and one to the printable form. If you experience difficulties reaching the fillable form, you may want to try using Explorer as your browser. For some reason, the fillable forms are finicky on other internet browsers.
When must an ICU be sent?
Generally speaking, an ICU must be sent within 30 days of the changes that triggered the ICU. However, there are two exceptions to this.
However, when/if a corporation loses its insurance coverage, the corporation must advise owners as soon as reasonably possible after the day the insurance termination came to the corporation’s knowledge. In any event, the corporation must advise its owners no later than 30 days after it first learned of the termination of the insurance.
The second exception has to do with the loss of quorum on the board. In such a case, an ICU must be sent within 5 days of the board losing quorum.
It is to be noted that it is possible that corporations may have to send out an ICU (in case of a change) prior to having sent their first PIC ! Indeed, as shown in our chart, some corporations may not have to send their first Periodic Information Certificate for many months. Still, if one of the changes listed above occurs before then, the corporation has to send an ICU.
What about if there is a vacancy on the board?
The prescribed form may present a challenge as it does not readily allow to identify the existence of a vacancy on the board. Once you click the box to identify a change to the directors/officers, it allows you to choose between “No change”, “new address of service” or “new director or officer”. This seems to indicate that the ICU is only required when a new director/officer is appointed (to fill a vacancy for instance). What is one to do when the only change is the result of a departure (a resignation, for instance) and that no one is appointed to replace him/her?
We see two options:
- List all remaining directors/officers and click “no change for each of them”;
- List the departed director/officer identify somewhere that this director is no longer on the board.
It may have been simpler if the form offered the choice “vacancy” or “no longer on the board”. Not sure I’d go into more details. It is probably not required to further explain the vacancy (resignation, death, removal by owners…). “Vacancy” or “Departure” may have suffice.
If the resignation and replacement takes place within 30 days, this question is moot as a single ICU will cover both the departure and replacement. All you would need to do is identify the replacement. In our view however, an ICU is required not only upon filling the vacancy but also if a director/officer departs and is not replaced. To us, this constitutes a change to the board requiring an ICU.