ellisdon

Making changes to common elements

Boards must consider four questions before altering a corporation's assets
Monday, October 28, 2013
By Sonja Hodis

When a condominium corporation wants to make a change to a common element or asset, the board must consult section 97 of the Condominium Act to understand what steps, if any, the board must follow before making the change. The following is an outline of those four considerations:

1. Is the work the board wants to undertake an addition, alteration, improvement or change in assets?

The board must look to section 97(1) for the definition of “addition, alteration, improvement or change.” The corporation has an obligation to repair or maintain the common elements. If the corporation carries out this obligation using materials that are reasonably close in quality to the original, as is appropriate in accordance with current construction standards, the work is not deemed to be an addition, alteration or improvement or a change. In these cases, the remaining subsections of section 97 do not apply. The work is considered to be part of the corporation’s maintenance and repair obligations, and the board can proceed to have the work done.

2. If the work the board wants to undertake is an addition, alteration, improvement or change in assets, does the board have to give notice to owners?

Section 97(2) applies if the work to be done is not part of the corporation’s repair and maintenance obligations, or if the corporation uses materials that are not reasonably close in quality to the original in accordance with current construction standards. If the corporation is making an addition, alteration or improvement, or a change in assets or service, the board can do so without notice to the owners if:

  • The change is necessary to comply with a mutual use agreement (see section 113 of the Act) or any requirements imposed by legislation
  • The board is of the opinion that it’s necessary for the safety and security of the persons using the property or assets of the corporation, or to prevent imminent danger
  • The cost in any given month for the work is no more than $1,000, or one per cent of the annual budget for the current fiscal year

3. If notice is required, does the board need to call a meeting and take a vote of owners?

If none of the above three noted exceptions in section 97(2) apply, a board is required to give notice of the change to the owners. The notice must contain the information listed in section 97(3)(a).  If the owners do not requisition a meeting in accordance with section 46 within 30 days of receiving the notice, or if they do requisition a meeting and have not voted against the proposed addition, alteration, improvement or change in assets or service by a majority vote, the board can then go ahead with the work. However, that is if the change is not considered “substantial.”

4. Is the work a “substantial” change, requiring an owners’ meeting and a two-thirds vote in favour?

Section 97(4) only applies if the work being done is deemed “substantial.” Section 97(6) defines a substantial change as one where the estimated total costs of the change is more than 10 per cent of the current annual budget, or if the board elects to treat it as substantial.

If the work is substantial, then a meeting of owners must be called, and at least two-thirds of owners must vote in favour of the addition, alteration, improvement or change in assets or service.

In recent years, the complexities and misunderstandings in relation to section 97 have resulted in costly disputes. Boards are advised to seek legal advice about their unique situation before acting.

Sonja Hodis is a litigation lawyer based in Barrie, and practices condominium law in Ontario. She can be reached at (705) 737-4403 or sonja@hodislaw.com.

4 thoughts on “Making changes to common elements

  1. Question re s 97(2) of the Condo Act

    If the board is of the opinion that it is necessary to install a video alarm system for the safety and security of owners, does it need to notify owners and call a meeting if the costs of so doing are in excess of$1000.00 or one % of the budget as per the act?

    Thank you

  2. The Condo Board agreed to engage a landscaper at the cost of $6,000 to plant flowers and plants in their lawns for the summer. But the Landscaper planted just a few flowers in their lawns. Board were not happy that there was not enough colourful flowers – perennials and annuals planted, Therefore the Board agreed that a resident who is very knowledgeable on the subject should be consulted. One of the Director accompanied the said resident at the first instance who bought flowers, -perennials and annuals, including planting service at the cost of $703 . Thereafter the resident on her own felt that more flowers were needed and she on her own bought in good faith addition flowers and arrange for planting. Therefore the total cost of this venture came to $1,144.65 which the said director reimbursed out of good faith that the Board would honour this payment. The resident has am excellent standing with Board As the total cost exceeded $1,000 the director immediately informed the Treasurer. However The Treasurer has taken the position that the said director has violated Sec 97 2(3) as the total amount incurred marginally exceeded $1,000. Query: Is the Treasurer correct in taking the position that 97 2(3) applies?. While the said Director feels that Sec 972(c) does apply as no notice to the owners would be required to be sent for planting additional colourful flowers for the summer. I would greatly appreciate your legal opinion on the subject ASAP as we have Board meeting this coming Monday- July 23. Thanking you in anticipation of your prompt reply.

    • Section 97 (2) c states
      QUOTE
      subject to the regulations made under this Act, the estimated cost, in any given month or other prescribed period, if any, of making the addition, alteration, improvement or change is no more than the greater of $1,000 and 1 per cent of the annual budgeted common expenses for the current fiscal year. 1998, c. 19, s. 97 (2).
      UNQUOTE

      Query: The key phrase is “greater of”. Therefore if the total amount is $1150 only but it is definitely considerably less than budget as per the act then is the notice require?

  3. ONE OF OUR BOARD MEMBERS FEELS HE CAN DECIDE TO MAKE CHANGES/ADDITIONS TO AN ONGOING PROJECT. OTHER BOARD MEMBERS ARE UPSET THEY WERE NOT INFORMED. WAS HE RIGHT IN GOING AHEAD ?

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