CONDOCENTRIC: ASK THE PROS - Is The Board Bound By AGM Decisions?

Question:

If a decision is made by the residents at an AGM, can a Board of Directors change that decision later at a regular Board meeting? In 2004, the residents decided to have a set date for the AGM each year so they could plan around it. The item was on the agenda distributed before the AGM, discussed and voted on and passed during the meeting. Now, 8 years later, a different Board wishes to change the date at a regular monthly Board meeting. Can they do this? Or, must the date be changed at our next AGM with a vote by the residents?

Answer:

Notwithstanding that a matter may be on the agenda, not all votes taken at a meeting of owners will be binding upon the Board of Directors. At times, non-binding votes may be taken for the direction of the Board only. For a vote to be binding, it will depend on how it was passed and whether the requisite authority exists under the Condominium Act, 1998 (the “Act”) requiring and/or permitting the vote. For example, if your condominium corporation’s roof is leaking into only one unit and the majority of owners vote that the repairs not take place, that vote would not be binding on the board. If followed, it would result in a breach of the condominium corporation’s duty to maintain and repair under the Act. Matters can also be placed on the agenda for general discussion (only) and, if a vote is taken, it would be for the direction of the Board. This is often regarded as good practice as it encourages discussion within the community and allows the Board to get feedback from unit owners.

With respect to the timing of the Annual General Meeting, the Act provides that it be held within six months of the condominium corporation’s fiscal year end. The Act also provides that by-laws may be passed to govern the conduct generally of the affairs of a condominium corporation. On this point, it is not unusual for a condominium corporation to have a provision in its General Operating By-law that authorizes the Board to determine the date of the Annual General Meeting (provided same is within six months of the fiscal year end as required by the Act). From the question asked, we don’t know whether an amending by-law was passed or whether there was simply a discussion and a vote on the general desire to set the date for the Annual General Meeting

Also to be considered is whether there may have been other circumstances which may have given rise to the delay (i.e. delay in receiving the audited financial statements). While condominium boards are well advised to give due consideration to unbinding votes, enforcement of the Act must be reasonable and Board decisions must ultimately be made to advance the interests of the condominium corporation as a whole.

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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