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Requisitions: waiting on changes to the Condo Act

Thursday, December 3, 2020
By David Thiel

Potentially lost in all of the ongoing changes to the Condominium Act, 1998 (the “Act”) since 2017 (really, 2015) are the proposed amendments concerning requisition meetings, which have not yet been proclaimed into force. Those amendments will drastically change the requisition process.

Requisitions are essentially petitions signed by at least 15 per cent of owners requesting that a condominium call an owners’ meeting for a particular purpose. The most serious and common requisition would be a requisition for a meeting to remove and replace one or more of the directors from a condominium board.

One fundamental feature of the process has been the authority of requisitionists to call their own official owners’ meeting if the condominium board does not do so within 35 days: a ‘self-help’ remedy.

That said, it has always been exceedingly difficult for requisitionists to actually call their own meeting. In particular, if the requisition is to remove board members, a condominium board may take the position that the requisition is invalid. If the requisitionists disagree and decide to proceed to call and hold a meeting, there is potential to elect a ‘competing’ board. These situations can create chaos for a condominium, and often result in expensive litigation.

A case in point is the recent decision of the Ontario Superior Court of Justice in Toronto Standard Condominium Corporation No. 2510 v. All Unit Owners (2020 ONSC 6582; October 27, 2020). Here, a requisition to remove board members was submitted to the condominium, which took the position that the requisition did not meet the requirements of the Act.

The requisitionists attempted to call the meeting, but the condominium applied to Court to prevent the meeting from proceeding.

Ultimately, the Court found that the requisitionists had failed to comply with all requirements of the Act relating to calling owners’ meetings including: providing 14 days notice of the meeting instead of 15, not using the mandatory form of Notice of Meeting, and apparently delivering the notice of meeting through social media (at least in part) which is not a permitted method of service.

The facts of this case also raise other interesting legal issues such as whether a requisition can be ‘supplemented’ by sending additional owner signatures after the initial submission of a requisition, and also whether requisitionists may withdraw their signatures. These issues were not addressed in any final way since the requisitionists had failed to call the meeting properly.

It is also worth pointing out that the requisitionists in this case made several substantive procedural errors. What is less clear is whether or not more limited, technical errors in procedure would also invalidate such a meeting. Would some extra procedural flexibility be permissible in the midst of the pandemic?

All of which demonstrates that requisitions and the self-help remedy can be extremely complex, not to mention the litigation that may ensue. In the aforementioned case, the court made a very clear statement in bold text, as follows, in part: “As they have learned in this endeavour, this is a complicated field in which to navigate.”

So, how will amendments to the Act (the “Amendments”) presumably improve the requisition process as discussed above? The main changes to the procedure pursuant to the Amendments would essentially be as follows:

a. the requisition itself will be on a new mandatory form;

b. upon receipt of the requisition, the board will have 10 days (or another time period as per the regulations) to respond to the requisitionists, either confirming that the owners’ meeting will be held, or stating that the meeting will not be called, and stating the reasons why not;

c. if the board does not respond as per (b) above, then it is deemed to agree to proceed to call the meeting;

d. the board essentially has 40 days to call and hold the owners’ meeting if it has confirmed that it will do so, or if deemed to respond in such manner as per (c) above;

e. the requisitionists will have 10 days (or another time period as per the regulations) to revise a requisition if they deem fit;

f. where a board responds to state that it is not calling an owners’ meeting, the requisitionists will have 20 days in which to apply to the Condominium Authority Tribunal (“CAT”) for a ruling on the requisition (or apply to the Superior Court if the CAT’s jurisdiction has not been expanded to include such requisition matters). If such an application is not made, the requisition would be deemed to be abandoned.

The primary change is to eliminate the self-help remedy of requisitionists calling their own meeting. This is substituted with the option to apply to Court or the CAT, as the case may be, for a resolution.

This feature alone should help eliminate the complications associated with requisitionists calling their own meetings. What remains to be seen is how efficient the process will be for requisitionists to apply to Court or the CAT.

It would seem that having requisitionists apply to Court may be an inefficient procedure with what presumably would be a potentially significant delay. Hopefully, the CAT’s jurisdiction would be expanded to include handling requisition matters, at the same time when the Amendments come into force.

Provided the CAT can efficiently (both in terms of cost and time) address the requisition issues, and subject to actually reviewing the regulations, these improvements to the Act should be welcome and address the growing complexity associated with the self-help remedy as discussed above.

David Thiel is a partner in the condominium law group at Fogler, Rubinoff LLP. He can be contacted at dthiel@foglers.com or 416.941.8815.

 

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