Important By-Laws to Have in Place, Now!

BY-LAW

 Pursuant to Section 56 of the Condominium Act, 1998 (“Act”) and Section 14 of Ontario Regulation 48/01, a condominium corporation may pass a by-law for various prescribed purposes. This By-Law Menu outlines some of the important by-laws that all condominium corporations should consider passing (this is not an exhaustive list).

E-Meetings & E-Voting By-Law

This by-law allows a condominium corporation to use its discretionary authority to hold electronic meetings of owners and accept voting by “telephonic or electronic means”, as the term is defined in the Act, by the methods outlined in the by-law. The condominium corporation may also hold hybrid meetings by permitting owners to attend in person, by proxy and/or by electronic means. The lower threshold of approval by owners is required under the Act to implement this by-law (a simple majority vote by owners present at a duly constituted meeting will pass the by-law).

Director Qualification By-Law

Condominium corporations should consider re-visiting the director qualifications in their governing by-law which, in many cases, only contain the minimum qualifications required by the Act. The conditions to qualify, or be disqualified, as a director may be expanded in this by-law, by requiring directors to, among other things: own and/or reside in a unit; not be in arrears of common expenses; not be an employee of the condominium corporation; not be involved in a legal proceeding against the condominium corporation; and/or to agree to a code of ethics as outlined in the by-law. Importantly, this by-law outlines a procedure by which a director may be removed from the board of directors if they breach the code of ethics on more than one occasion. The owners of a majority of the units must vote in favour of this by-law in order for it to pass.

Standard Unit By-Law

When damage is caused to a unit, condominium corporations can refer to this by-law to determine repair and insurance responsibilities.  “Standard unit” features are covered by the condominium corporation’s insurance policy, whereas “improvements” are covered by unit owners’ insurance policies. As many condominium corporations face increasingly higher insurance deductibles and premiums, unit features that are commonly damaged by major perils such as flooring, countertops and cabinetry are often excluded from the standard unit features, and are classified as “improvements” in this by-law.  With unit owners insuring more of their own property, the condominium corporations’ insurance deductibles and premiums are kept under control. The owners of a majority of the units must vote in favour of this by-law in order for it to pass.

Insurance Deductible By-Law

All condominium corporations should take advantage of Section 105 (3) of the Act, which permits condominium corporations to extend the circumstances under which repair costs below their deductible amount may be added to the common expenses payable for an owner’s unit. One such circumstance often included in this by-law is to hold an owner responsible for the lesser of the corporation’s deductible or actual repair cost for any damages that originate from their unit (i.e. so that the condominium corporation does not need to prove fault). The owners of a majority of the units must vote in favour of this by-law in order for it to pass.

Mediation/Arbitration BY-LAW

As courts have increasingly encouraged condominium corporations to use alternative dispute resolution processes instead of resorting to court proceedings, condominium corporations will benefit from a by-law that establishes the procedures to be followed by parties with respect to mediation and arbitration proceedings. This by-law also clearly outlines the expectations of the parties throughout the mediation and arbitration process. The owners of a majority of the units must vote in favour of this by-law in order for it to pass.

Summary of procedure for passing by-laws:

  1. The board of directors must approve the by-law by resolution at a duly constituted meeting;
  2. The Preliminary Notice of Meeting of Owners must indicate that proposed changes to the condominium corporation’s by-laws will be discussed at the meeting;
  3. A copy of the by-law must be included with the Notice of Meeting of Owners and the agenda for the meeting must clearly indicate that the by-law will be presented, discussed and that a vote will be conducted at the meeting to approve the by-law.
  4. At the meeting, the threshold of approval by owners to pass the by-law, as required under the Act, must be met; and
  5. The by-law must be registered on title to all units in the condominium corporation.

 By-laws must be drafted precisely and must be tailored for each condominium corporation. By-laws must also be reasonable and consistent with the Act and the condominium corporation’s declaration. Importantly, the content of some by-laws has not been tested by courts. If you are unsure about the procedure to pass a particular by-law, or if you are interested in having a by-law drafted for your condominium corporation, you should always consult with your legal counsel. Please contact a member of our firm and we would be more than happy to assist.