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Electronic Communication
The Condominium Act, 1998, SO 1998, c 19 (the “Act”) was amended as of October 1st, 2023 to reflect changes regarding communication via “telephonic or electronic means”. Under subsection 1(1) of the Act, “telephonic or electronic means” is defined as any means that uses the telephone or other electronic or technological means to transmit information or data.
Some of the changes to the Act relate to communications during virtual meetings, electronic voting, and electronic delivery of meeting materials. This article explains the changes and implications for condominium Boards of Directors and highlights some of the concerns or considerations that may arise as different methods of communication are undertaken.
Virtual Meetings
The changes to the Act allow meetings of directors or owners to be conducted entirely by one or more telephonic or electronic means or by a hybrid of in-person attendance and by one or more telephonic or electronic means. A hybrid meeting is beneficial as it allows owners to choose which option best suits their needs in order to engage with the community.
According to Subsections 35(6) and 45(7) of the Act, a by-law may limit the manner in which a meeting of directors or owners may be held. The relevant provisions in the Act are subsections 35(5) to 35(8) and 45(6) to 45(9):
35(5) Subject to the by-laws and subsection (7), a meeting of directors may be held entirely by one or more telephonic or electronic means or by any combination of in-person attendance and by one or more telephonic or electronic means.
(6) In addition to any other matters that the by-laws may provide for with respect to the holding of meetings of directors in accordance with subsection (5), the by-laws may,
(a) limit the manner or manners by which a meeting of directors may be held in accordance with subsection (5); and
(b) specify requirements that apply with respect to the holding of a meeting of directors in a manner described in subsection (5) or in such manner as described by the by-laws made under clause (a).
35(7) A meeting of directors held in any manner described in subsection (5) or in such manner as described by the by-laws made under subsection (6) must provide that all persons attending the meeting are able to communicate with each other simultaneously and instantaneously.
35(8) A person who, through telephonic or electronic means, attends a meeting of directors is deemed for the purposes of this Act to be present at the meeting.
45(6) Subject to the by-laws and subsection (8), a meeting of owners may be held entirely by one or more telephonic or electronic means or by any combination of in-person attendance and by one or more telephonic or electronic means.
45(7) In addition to any other matters that the by-laws may provide for with respect to the holding of meetings of owners in accordance with subsection (6), the by-laws may,
(a) limit the manner or manners by which a meeting of owners may be held in accordance with subsection (6); and
(b) specify requirements that apply with respect to the holding of a meeting of owners in a manner described in subsection (6) or in such manner as described by the by-laws made under clause (a).
(8) A meeting of owners held in any manner described in subsection (6) or in such manner as described by the by-laws made under subsection (7) must enable all persons entitled to attend the meeting to reasonably participate.
(9) A person who, through telephonic or electronic means, casts a vote before or at a meeting of owners or attends such a meeting is deemed for the purposes of this Act to be present at the meeting.
Subsection 47(7.1) of the Act provides that where the meeting is to take place entirely virtually or by telephonic means, the meeting’s notice is not required to stipulate a place of the meeting. With this said, it is important to ensure that the “location” is clearly stated as either a link or a phone number. Thus, while not a physical location, a virtual location is established, and for hybrid, both must be established.
47(7.1) Despite clause (7) (a), a notice of meeting of owners need not specify a place of the meeting if the meeting is to be held entirely by one or more telephonic or electronic means. 2023, c. 9, Sched. 7, s. 6 (5).
Electronic Voting
Telephonic or electronic means as defined above, including where used in combination with in-person attendance, may also be utilized to conduct a vote by a show of hands or by a recorded vote. The amendment to the Act as of October 1st, 2023, opens the door to electronic balloting and advanced electronic voting. The challenge of advanced electronic voting is that it potentially undermines participation in discussion at a meeting. Advanced electronic voting undermines the ability to consider intellectual dialogue and the opportunity for additional questions and answers prior to making a decision.
Further, as per Section 45(9) of the Act, for the purposes of quorum, owners who vote by telephonic or electronic means before or during an owners’ meeting are deemed to be present at the meeting. But the question is whether they are really present. These are subtle changes.
Delivery of Meeting Materials
Prior to the amendments to the Act noted above, condominium corporations were permitted to provide notices by way of electronic delivery only where the consent of the owners had been collected in advance. The prescribed permission was originally inadequate to manage a condominium corporation’s risk and now the legislation has created a broader risk where no permission is required.
Thus, condominium corporations must think ahead via policies. Prior to the amendments to the Act, the Board was required to pass a resolution prescribing the method of service and owners would be required to sign a written agreement confirming their acceptance of the method of service. The agreement or form would collect the name and address of service from the owners and the condominium corporation would need to maintain up-to-date records. Section 46.1 of the Act requires that the owner’s email address is added to the condominium corporation’s record of owners. Condominium corporations may now assume that if an owner or mortgagee provided their email address to the condominium corporation, the condominium corporation may use it for electronic communication purposes.
46.1 (1) A corporation shall maintain the record required by subsection (3).
The amendments to the Act allow for the delivery of notices, including meeting materials, by way of electronic communication to the owner’s electronic communication address appearing in the condominium corporation’s record. An agreement or form to receive electronic notices is no longer compulsory, but we recommend the same plus a by-law to provide adequate clarification to owners. Section 35(3) of the Act has been amended to set out the content requirements for notices of a meeting of directors. The other relevant provisions of the Act include subsections 47(4) to 47(6), which reads, as follows:
47(4) A notice that is required to be given to an owner shall be,
(a) delivered to the owner personally;
(b) sent by prepaid mail addressed to the owner at the address for service that appears in the record of the corporation required by section 46.1 or that is required by that section to appear in that record;
(c) subject to the regulations, sent to the owner’s electronic communication address that appears in the record of the corporation required by section 46.1, or is required by that section to appear in that record, if,
(i) the by-laws made under subsection (6) do not prevent the giving of the notice by that method, and
(ii) any additional requirements set out in the by-laws or in the regulations for sending the notice by that method are satisfied; or
(d) delivered at the owner’s unit or at the mail box for the unit unless,
(i) the party giving the notice has, by the following time, received a written request from the owner that the notice not be given in this manner,
(A) in the case of a notice of meeting of owners, at least 20 days before the day of the meeting, or
(B) in the case of a preliminary notice described in subsection 45.1 (1) or any other notice to owners that is not a notice of meeting of owners, at least five days before the day the notice is given, and
(ii) the owner has given an address for service described in clause (b) that is not the address of the unit of the owner or the address for the mail box for the unit.
[…]
47(6) The by-laws may specify,
(a) circumstances in which clause (4) (c) or (5) (c) does not apply in respect of the corporation;
(b) that all or certain types of notices may not be given by one or more methods of electronic communication; and
(c) additional requirements that must be satisfied in order for a party to give a notice in accordance with clause (4) (c) or (5) (c). 2023, c. 9, Sched. 7, s. 6 (3).
Thus, bylaws need to be carefully reviewed before notice goes out.
Implications
One of the key benefits of the above amendments is that they offer condominium corporations and unit owners the necessary flexibility to transact their affairs. They also augment participation in the democratic process, and we need to reflect on the value of convenience over participation and meaningful decision-making. The pendulum has swung to the other side of the spectrum arguably and where it made sense during the pandemic, perhaps the pendulum needs to swing more to the middle.
The above standards no longer mandate a by-law to be in place. However, if a by-law is in place, it will govern the approach and procedure for how meetings will be held, how voting will occur, and how notices will be delivered. As well, a by-law can also manage risk exposure for the corporation. For each of the above scenarios, the Board may, by way of a by-law, restrict the options for how meetings are held, how electronic voting is to be conducted, and how notices may be delivered. If a condominium corporation’s existing by-law does not conflict with the Act, then the existing by-law would trump the Act. As directed by Section 56 of the Act, such a by-law would require the owners of a majority of the units in the condominium corporation (or such other prescribed number of owners) to vote in favour of confirming the by-law. Therefore, the choice remains with the owners.
Where virtual platforms are used by condominium corporations for owner meetings, such a change promotes community involvement and engagement by allowing for numerous options to participate during meetings. Section 35(7) of the Act, condominium legislation also now requires that all individuals attending the virtual meeting have the ability to “communicate with each other simultaneously and instantaneously”. This in reality does not apply, if unit owners vote in advance. In this scenario, the necessary engagement and intellectual dialogue are potentially limited. Balance of participation and convenience is how it should be.
The transition to the digital age also allows condominium corporations to reduce costs from circulating physical notices to owners (mailing, printing costs, etc.) and potentially reduce their environmental footprint (in situations where owners do not print their own copies) by switching to electronic communication.
Concerns
One of the concerns with electronic communication is that there may be issues with owners being able to view, store, retrieve and print the content. This concern is difficult to overcome since each individual has a unique method of viewing and storing the electronic document that they received. There can be a software application issue, and non-compatibility issues, and may be difficult for some owners due to technical barriers. To overcome this, Boards should be prepared to provide owners with a paper copy if requested.
Another noted concern is that the legislative changes fail to realize that community involvement and engagement are significantly harder to achieve where advanced voting remains permissible. In this scenario, engagement and intellectual dialogue are less likely to take place prior to vote submissions.
Another concern with electronic communication is that not everyone remembers to update their email address if changed. Similarly, owners may have forgotten that they provided the condominium corporation with a fax number or landline, which is also considered a telephonic or electronic means to which the condominium corporation may deliver notices. The onus is on the owners to inform the condominium corporation that their contact information has changed. This would nevertheless result in potential failure to serve. One solution to this concern is to set up a website where condominium corporations can post their notices in a manner that is password-protected and accessed by the company in a virtual mailbox. However, there are challenges to this if the service provider goes bankrupt.
Lastly, there are privacy issues which still need to be managed with good corporate governance via rules, by-laws and policies to put limits on the condominium’s use, disclosure, and collection of data. Only the condominium corporation should have control over its data.
Conclusion
The amendments to the Act were a step in the right direction to assist condominium corporations in addressing some corporate governance issues while enhancing the ability of owners to participate. Nonetheless, every change comes with its own set of concerns, such as the deterioration of the democratic process, especially when considering the issues with advance voting.
