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.