The controversy surrounding digital voting platforms that make it possible for board members and property managers to spy on owners’ votes ahead of a meeting has left industry members wondering what’s next for protecting the integrity of condo governance in the age of technology.
In this new frontier of electronic voting lies a confluence of ethical factors: individual managers acting unfairly, board members who pressure them to do so, unregulated service providers, and years-old condo legislation.
The Ministry of Government and Consumer Services is currently working on implementing permanent changes to the Condo Act that will allow condos to hold virtual and hybrid meetings and vote electronically. But this also comes at a time when industry stakeholders are waving red flags over such flaws in the system.
Condo lawyer Denise Lash is one of them. She says there needs to be a whole new set of governance rules for virtual meetings.
“Virtual meetings do not and should not replicate in-person meetings,” she says. “In-person meetings were far from perfect when they were the norm and we have many proxy battles and litigation resulting from the manner in which in-person meetings and voting were conducted.
“Having the Ministry consult with the industry and looking at ways to provide greater accessibility and direct voting for owners will work towards a more democratic process.”
There’s been more urgency on the matter since William Stratas, managing director of Eagle Audit Advantage, wrote a public interest whistleblower letter to the Condominium Management Regulatory Authority of Ontario—the provincial regulatory body that oversees property managers.
Stratas says sources started coming forth early last year, claiming licensed property managers were choosing e-voting platforms that disclose advance election results. “The motive is probably beyond mere curiosity,” he says. “It’s as anti-democratic an initiative as you could ever conceive.”
Armed with knowledge about who is winning, managers could be asked to show results to board members who would then have a tactical advantage over challengers running against them.
In a blog post, CMRAO responded, “licensees are advised to refrain from this activity and should be aware that any attempt to influence the outcome of owners’ votes in any way constitutes a violation of the Condominium Management Services Act, 2015, and the Code of Ethics regulation, and the licensee will be subject to disciplinary action by the CMRAO.”
Some say the response isn’t emphatic enough. “I believe they missed an opportunity to show their licensees a clear red line on a fundamental ethical matter that touches all condominiums,” says Stratas. “Perhaps in future their disciplinary panel will have an opportunity to set forth a more strongly articulated position if a complaint on an e-voting anomaly is ever filed.”
Lash is calling for a more formal response, with stronger language that aligns the industry and gives managers powerful wording to use when directors ask them to act unethically in such a case.
“I don’t even think it is possible to ‘prove’ that managers have influenced a vote, and leaving CMRAO’s position with [this] wording… would essentially mean managers can still gain access, give in to the pressures of board members, and as long as no one can prove it influenced the vote, then CMRAO would not bring disciplinary action,” she wrote in an email response to the CMRAO.
Technology Outpacing Legislation
At the heart of the issue are board candidates interested in knowing outcomes beforehand and technology outpacing years-old legislation, said Rod Escayola. He was speaking at a CAI Canada seminar in February that was raising awareness about the problem.
As he pointed out, when the Condo Act was amended five years ago and the Condominium Management Services Act enacted, the province focused its attention on the “known evil”being paper proxies, which were rife with abuse.
“The pandemic has totally changed the landscape and pushed us forward into a universe that we never thought existed two and half years ago,” he said. “The weapon of choice now is voting electronically.”
He fears the province will be timid as it attempts to regulate e-voting, as drafts of the future legislation imply. “If we don’t tell people what that means and how that works, that’s going to be really problematic going forward,” he said.
While the advantages of electronic platforms may outweigh the need for proxies—“you’d have literally 15 days or more to cast some form of vote, 24 hours a day, at the convenience of wherever you are in the world,” said Stratas—technology is amplifying risk around confidentiality.
In the past, when bylaws were required for e-voting, the industry focused on principals like transparency and confidentiality, Escayola added. “The province should pay as much attention now when it regulates electronic voting as it did when it attempted to regulate proxies.”
Some service providers allow clients to view results ahead of time. Lash, who was one of the founders of CondoVoter at its launch in 2017, started noticing a pattern where licensed property managers were inquiring about the platform’s ability to offer advance vote results. Their interest wandered when told the feature wasn’t available due to ethical and privacy concerns.
“If the technology allows people to have access to the vote, of course the temptation is too hard to resist,” Escayola maintained. “We really need to regulate the service providers—you can’t let technology regulate itself.”
In a follow-up interview, Stratas said e-voting providers should “organize an industry association or trade group to formulate and enforce uniform codes of business and technical practices.”
“This sort of collective leadership would elevate the ethical, well-resourced e-voting providers and marginalize any sketchy fringe providers who might not qualify,” he said. “Audit reporting and transparency standards should be established within these uniform practice codes. All of this will greatly reinforce public confidence and trust in e-voting practices for condominiums.”
Next Level Management
As condo corporations await legislation, some believe policies currently in place at property management companies are lacking. “I find that some property management providers appear to tippy-toe their way around sensitive ethical matters and are reluctant to set unambiguous red lines in their policies and practices so their employees are strongly deterred,” said Stratas.
“Leaders of management companies should step-up assertively and enforce strongest possible standards with unambiguous consequences to their licensees for e-voting misconduct.”
Some companies are doing so. Speaking at the CAI Canada seminar, Julian McNabb of Melbourne Property Management, said “you need to create a policy within your organization, but when you’re entering into an agreement with a company that is going to provide e-voting or other services, you do need to make sure they have a policy they follow—similar to tendering any other contract the condo depends on.”
Melbourne Property Management recently implemented a policy dealing with knowledge of advance voting results. “Managers generally want help; they want to do their jobs better; we are trying to be more professional and it starts around the new legislation,” McNabb acknowledged.
John Damaren, vice-president, community development and governance at FirstService Residential, said in a phone interview that a manager’s job to protect voting information is nothing new in condos, given the prevalence of hardcopy proxies.
“In the age of e-voting, the provider is basically keeping that information and doing a recorded vote where they are going to give the managers a tally at the appropriate time, either right when it’s to verify quorum and during and throughout the voting process. But in these days of electronic meetings, the companies should not be disclosing this information to managers.”
If boards members hound a manager for information, he advises speaking with a supervisor and making the management company aware. Put concerns in writing and potentially reach out to the corporation’s solicitor.
There is always a risk of someone privy to the unethical behaviour making a complaint to the CMRAO, he warns. “There are already cases that have been published about unethical managers. I’m hoping the next time something like this happens, it will be the subject of a complaint where CMRAO could then take a stand and specifically call out the individual.”
There are likely more owners who care about running fair elections inside the province’s 12,000-plus condo corporations. “There are a lot more people now who are considering a condominium as their home. . . people living in the building have a more active role,” McNabb said. “Voter apathy is slipping away for resident engagement.”
Privacy is also top of mind. As the federal government plans to overhaul the Personal Information Protection and Electronic Documents Act and adopt a privacy tribunal, Stratas hopes that concerns around privacy invasion trickle down to members of the condo industry.
All one needs to do is consider the repercussions of Elections Canada passing on preliminary votes to the governing party in an election. “No one deserves to know how anyone else voted in a federal election,” he said. “That kind of ethics scandal would take down a government. Same risk can be present in condos where managers choose to use advance vote knowledge for manipulation of outcomes.”
