The Condo Act sets out the minimal number of directors that are required to sit on a condo board. It also provides for the mechanism to increase that number. In this blog post we explore this question.
Don’t miss next week’s webinar: Deep Dive on Condo Boards. More info and registration link.
Minimum number of directors
The Condo Act required condo boards to consist of at least 3 people. As will be explained below, this number can be increased.
If you have a 3-person board, 2 directors are required to have sufficient quorum to conduct business of the corporation. Here are the steps to take if your board ever loses quorum.
A board of transition (one before the turn-over meeting) can result in a greater number of directors on the board (even a number exceeding what the declaration provides for). This may be for a different blog post though.
As our readers know, the following are the required qualifications for someone to be a condo director:
- The person must be an individual (a company or an estate cannot be a director)
- The person must be at least 18 years of age
- The person cannot be an undischarged bankrupt
- The person cannot be “incapable” of managing property. This does refer to how good they are at managing property but rather whether they have lost the legal capacity required to manage property as defined under the Substitute Decisions Act or the Mental Health Act
- The person must have complied with the disclosure obligations
- The person must have completed the required directors training
- The person cannot have a condo lien registered on their property for more than 90 days
Unless your governing documents provide otherwise, that is the extent of the qualifications required to be a condo director. So (unless you governing documents provide otherwise) one does not need to be an owner nor do they need to even occupy a unit to be a director.
How to increase the number of directors?
The number of directors on a board can be increased one of two ways:
- Your declaration can provide for a greater number of directors
- You can increase the number of directors by adopting a by-law to that effect
So, while nothing prevents a board from appointing additional officers to the board, the directors cannot increase the number of directors on the board without the owners having approve a by-law permitting it (or without the declaration being amended).
For such a by-law to pass, at least 50% of the registered units must vote in its favour. Here is more on how to pass a by-law.
How many directors is a good number to have?
There is no one-size-fits-all answer to how many directors should your board have. Keep in mind the following (at times conflicting) considerations:
- How many units do you have? It may be difficult for small condo corps to solicit sufficient candidates;
- Will you be able to solicit and retain sufficient (and capable) candidates to sit on an increased board?
- More directors around the table may bring more ideas, more diversity and may reduce the workload;
- Too many directors around the table may not always be practical and may make it difficult to reach a consensus or to have efficient meetings. I’m not suggesting this to be an issue with, say, a board of 5. But beyond that, there may be too many cooks in the kitchen. Again, it all depends on the specific of your situation;
- Keep in mind that if you increase the number of directors on the board, you are also increasing the quorum required for them to do business.
What goes in a good by-law increasing the number of directors?
When adopting a by-law to increase the number of directors, you should turn your mind to the following:
- How to deal with the transition to an increased number;
- When does the by-law come in effect (technically, your board cannot have additional directors until the by-law is registered. Make sure to turn your mind to that);
- Think of staggered terms;
- Why not revisit the issue of director qualifications?
Be sure to consult your favourite condo lawyer to help you draft, adopt and register a good by-law that will serve you well.
- Directors qualifications
- Directors disclosure obligations
- Directors training
- Steps to take if you lose quorum
- How to adopt a by-law