Now that electronic voting is allowed in Ontario condos, how exactly does it work?
Changes to the Condominium Act, enacted in November, 2017, allow Ontario condominium corporations to conduct owner voting by electronic means. While this is new for Ontario, electronic voting has been used in Australia and in more than 20 U.S. states for some time.
The implementation of electronic voting addresses two challenges that condominiums currently face:
- voter apathy, which results in difficulty in obtaining the quorum needed to conduct owners’ meetings; and
- contentious proxy battles stemming from proxy irregularities, including fraud, as well as errors by owners in completing proxy forms and errors by the corporation in determining the validity of proxies.
Voter apathy and proxy battles
Corporations rely on owner participation to obtain quorum, the minimum percentage of unit owners who must attend a meeting in order to elect directors and conduct other business requiring owner approval. Electronic voting lets groups such as off-site investor-owners, who might otherwise abstain or appoint a proxy, participate remotely using a smartphone, tablet, laptop or desktop computer.
There have been a number of reported cases where the validity of election results have been challenged on the basis of proxy irregularities. Disputes have centred on whether proxies were duly signed and initialed by the registered unit owner, claims that proxies were obtained on the basis of false and misleading information, allegations that proxies from owners of multiple units were not properly counted to reflect one vote per unit and even disagreements as to whether a signed proxy was actually presented at the meeting. Unfortunately, these lawsuits are costly, as well as time-consuming for the board of directors and condominium management. Electronic voting eliminates the need for owners to appoint proxies in order for their vote to be counted.
The electronic voting process
Here’s what the electronic voting process could look like, depending on the platform:
A voting invitation is sent to owners eligible to vote. (No owners’ consent is required for this process as this is not a “Notice” that requires consent under the Condominium Act.) The voting invitation links to the ballot which will allow the owner to vote.
The ballot sets out all the voting items that will take place at the owners meeting and gives the owner options as to whether to vote on items, such as the election of board members, bylaws, approval of the minutes, appointment of auditor or any item that the corporation may wish to include. Owners are given an option to use the ballot for quorum only.
After the initial voting invitation has been sent out, reminders are sent to those owners who have not yet voted. No more than one vote per voting unit is allowed, with the vote of owners with multiple units weighted so that the owner only votes once but that vote is counted to reflect one vote per unit.
There are few, if any, paper ballots or proxies to draft, distribute, collect, scrutinize and store. Owners who do not want to participate in online voting still have the option to attend the meeting and cast their vote in person or to appoint a proxy. The mandatory form of proxy can be obtained online from the Condominium Authority of Ontario website. There is no obligation for condominium corporations to provide the proxy form to owners.
Independent third-party oversight adds an extra layer of privacy and security to the voting process as votes are anonymous and only the corporation receives the final vote tally. Once the voting period has ended, the final tally is automatically, rather than manually, tabulated and sent to the corporation’s designated contact person.
Voting platforms can also be used by corporations to conduct informal surveys to get feedback from owners on various matters before decisions are made.
Electronic voting bylaw required
Before electronic voting can be carried out, condominium corporations need to enact an electronic voting bylaw.
Passing an electronic voting bylaw requires a lower threshold than other typical bylaws, such as the Standard Unit bylaw. It takes a majority vote of those units represented in person or by proxy at an owners’ meeting, as long as there is a quorum at the meeting (25 per cent of the voting units). For example, if the corporation has 100 units, the quorum for the meeting would be 25 units (25 per cent) and the bylaw will pass with 13 units voting in favour of the bylaw.
If online voting becomes the norm for condominium corporations, the Ministry of Government and Consumer Services will hopefully incorporate the electronic voting bylaw in the regulations to the Condominium Act so that corporations can implement electronic voting without the need for a bylaw.