We have all spent the past few months discussing the nitty gritty of how a pandemic affects a condominium, its directors, managers, and owners. At the time of writing (knock on wood), the public health crisis seems to be relatively under control in the province of Ontario.
We therefore take this opportunity to go back to the basics on a topic of real importance: how to enact a bylaw.
What can by-laws do?
As our readers will know, section 56 of the Condominium Act sets out the subject matter of a by-law.
The most common by-laws deal with directors (disqualification, numbers, election, resignation, etc.), the regulating of board meetings (including electronic meetings and voting), the setting of quorum for meetings, appointing and governing agents and officers of the corporation, the defining of the Standard Unit, the collection of common expenses, and borrowing by the Corporation.
A by-law does not deal with the safety, security or welfare of owners nor are they aimed at preventing unreasonable interference with the use of units or the common elements. Rules do that.
Confused about the difference between the Declaration, by-laws and rules? We’ve blogged about this.
Steps to adopt a by-law
Resolution of the board
First, get your favourite condo lawyer to draft the bests by-law for you. A by-law has to deal with issues that can be regulated through a by-law (see above). It must also be reasonable and cannot be inconsistent with the Declaration or the Condo Act.
Once you have the draft by-law, the Board must approve it by way of a Resolution at a board meeting.
Meeting of owners
The Board must then call a meeting of the owners for the purpose of voting on the by-law:
- Proper Notice must be given to all owners (and to mortgagees who under the terms of the mortgage have a right to vote at a meeting of owners);
- A Preliminary notice must be given to owners at least 35 days before the meeting;
- Formal General Notice must be given at least 15 days before the meeting.
Use our AGM calculator to make sure you don’t miss any of these deadlines!
How to give notice of the meeting to owners?
The Notices of meetings (see above) are to be given pursuant to section 47 of the Act, which includes sending the notices by regular mail at the registered address of service or through electronic means if the Corporation has adopted a resolution to that effect and the owner has consented to such electronic service. You can also deliver it personally to the owner or deliver it to the owner’s unit or mailbox for the unit unless the owner has provided a different address for service.
We already blogged on how corporations can serve their owners electronically. Keep in mind that there is presently an exception to this, due to the pandemic. Until November 21 (unless extended), corporations can serve these notices electronically, even in the absence of owners’ consent to such service.
What goes in the notice package?
The Notice of meeting package should include, at least:
- The General notice (which is a mandated form – check our “Forms” Tab to see all the forms).
- An Agenda, which includes a vote on the proposed by-law;
- A proxy for owners to sign and return if they cannot attend (this is not mandatory but always good to get the vote out); and,
- A copy of the proposed by-law to be voted upon.
Quorum at the meeting
To hold the meeting and vote, you will require proper quorum (in person or by proxy): this is at least 25% of the units. However, unless you have at least 50% of the owners present (in person, electronically or by proxy) you will not have sufficient votes to pass the by-law (most by-law must be supported by 50% of the units).
If you don’t have sufficient quorum at the meeting to vote (one way or the other), use the meeting to explain the by-law and to collect proxies. You may need to adjourn the meeting, with the consent of the owners present, to gather more proxies. Once you have sufficient proxies (one way or the other), you will need to call another meeting of the owners, which can be held by proxies for the most part.
For a by-law to be adopted, it must be voted-in by at least 50% of all registered units (not just the ones present at a meeting called to vote on it).
Some by-laws can be adopted with a simple majority, that is a majority of the owners participating to the meeting. A great example of such a by-law is the Electronic by-law (to allow virtual meetings and electronic voting). Those are easy to adopt!
Once you have the required support (ie, a majority of units have voted in favour of the by-law), the Board will need to sign a Certificate confirming that the by-law has been approved by the owners at a meeting called for that purpose.
Registration on title
The by-law then needs to be registered on title, which can be done by the Corporation’s counsel if provided an Acknowledgement and Direction.
The by-law is only valid once the required majority has voted in favour of it and once it is registered on title.
Get your favourite lawyer to help you with these last two steps.
And there it is…. You have a by-law!