Amending Bylaws by Ordinary Resolution: When is a Conflict a Conflict?
November 18, 2020
I have been contacted by several condominium corporations regarding amending their bylaws to bring them into compliance with recent changes to Alberta’s condominium legislation. Along with the changes introduced in 2019 and 2020, the Legislature provided condominium corporations with the ability to amend bylaws that conflict with the revised legislation by way of an ordinary resolution:
Conflict with bylaws
34.1(1) If there is a conflict between a bylaw and this Act or the regulations, this Act or the regulations, as the case may be, prevail.
(2) Notwithstanding section 32(3), in order to bring the bylaws in conformity with this Act and the regulations, a corporation, no later than one year after the coming into force of this section, may by ordinary resolution amend any of its bylaws to ensure that its bylaws do not conflict with this Act or the regulations.
(3) Subsection (2) does not apply to amending an existing bylaw that is not in conflict with this Act or the regulations nor to adding any new bylaws.
Ordinarily, condominium bylaws can only be amended, repealed or replaced by special resolution, which requires obtaining the approval of at least 75% of all persons eligible to vote, whose collective votes represent at least 7,500 unit factors. An ordinary resolution, by contrast, is a simple majority (more than 50%). Further, if conducted at a general meeting, an ordinary resolution is based on the number of persons in attendance, physically or by proxy, rather than the total number of persons eligible to vote. In that case, it does not depend on unit factors either.
For many years, the Condominium Property Act has contained the provision shown in section 34.1(1) above. If there is a conflict between any bylaw and the Act or regulations, the latter prevails to the extent of the conflict. The grandfathering provisions in subsections (2) and (3) were added when the legislation was amended on January 1, 2020, giving condominium corporations until December 31, 2020, to make amendments to address conflicts by passing an ordinary resolution.
Crucially, there must be an actual or “true” conflict for a condominium corporation to make use of this special, limited-time-only ability. A true conflict is when a provision in the bylaws cannot coexist with a provision in the Act or regulations. It may not be as obvious as one provision mandating an action that the other forbids, though that is one example of a true conflict. Essentially, it must be impossible to comply with a provision in the bylaws without violating some provision in the Act or regulations.
An example of a true conflict is the notice requirements for general meetings. Condominium bylaws often contain shorter notice requirements, typically as few as seven days, whereas the Act expressly requires providing at least fourteen days notice. By providing only the minimum notice in the bylaws, the Act would be violated. Another example is voting rights. Many bylaws include exceptions for mortgagees to retain their voting rights when a unit owner is in arrears for payment of monthly assessments for common expenses for more than 30 days before the vote occurs. This is in clear violation of the legislation, which provides that neither the owner nor the mortgagee may exercise the power of voting in these circumstances.
Given that the Act already contains an express provision to address bylaws in true conflict, I have not advised using the grandfathering provision. It is a time-consuming and unnecessary expense for condominium corporations since the Act or regulations will prevail in an actual conflict. However, if a corporation wishes to proceed using the ordinary resolution power in section 34.1(2) above, then according to subsection (3), it must limit the amendments to addressing only true conflicts. No matter how minor (such as correcting spelling errors or updating terminology), any other changes still require a special resolution to be approved.
I am looking for clarity regarding a conflict with a developer who has removed all owners from the board.
In turn making decisions ie paying himself $ 8400 dollars for work not related to condo members.
Requesting a special assessment of $ 25,000 for his personal legal defence for a matter related to his building of a condo site and the list goes on. Property manager who has a relationship with person and supports such action. Can not seem to find a solution really frustrated. Any help would be much appreciated.
Unfortunately the nature of this comment doesn’t lend itself to quick or easy informational responses. In this case, I strongly encourage you to seek legal advice. A lawyer can help you determine whether the developer and/or the property manager has committed improper conduct and if so, what your/the condo corporation’s legal rights and remedies might be.
Erin: Our board chairperson is trying to push through and limit our existing parking stalls from open, for residents & visitors to only rental stall and the rest for visitors. The idea was presented at a General Zoom meeting where we could not speak just listen. They are putting up signs and collecting fees on June 1,2021. Ted (me) representing the people need HELP in holding her to accountability as this action applies to our bylaws and needing help to stop the action if illegal.
Sincerely yours
Please acknowledge if you can help us.
I would need more information to provide an opinion on whether or not renting parking stalls is permitted by your condo plan and bylaws. There are also tax issues to consider as engaging in for-profit activities can jeopardize the not for profit status of the condominium corporation. If you are interested in obtaining an opinion, please contact me directly.
Hi Erin, is it appropriate or inappropriate for the lawyer/law firm drafting a condo’s new draft bylaws to include an overview letter with the draft bylaws in the special resolution voting package sent to owners, explaining the benefits of the updated draft to be voted on…or is it a violation of their Code of Conduct 7.2-12 regarding dealing on a client’s behalf with an unrepresented person? In short, does the lawyer only represent the Board or do they by extension of the elected Board representing the interest of the condo corporation, which is comprised of all owners, also represent the owners?
The condominium’s lawyer represents the condominium corporation, not the Board, and the corporation is comprised of all the unit owners. The board is charged with making all decisions on behalf of the corporation, including engaging and instructing legal counsel, however the lawyer’s duties are to the corporation as a whole. It’s unclear how drafting a letter to accompany the proposed bylaws and explain the changes to unit owners would be a violation of the lawyer’s duties. Very often the board of directors will ask the lawyer to prepare the draft text for such a letter, but the letter itself is typically signed by the board and/or property manager.
Thanks for your opinion on this topic, Erin. Much appreciated.
Erin, the matter at hand is much more complicated than has been presented. First the letter was prepared by counsel retained by the Board and specifically addressed to owners and mortgagees. The changes to the bylaws reduce the maintenance obligations of the corporation, allows for the board to allocate expenses to owners at the discretion of the board (i.e. not based on unit factors), involves additional restrictions to the use of exclusive use areas, provides for changes in favour of the corporation on periods of limitations (10 yrs for corp vs. no change for owners). The letter did not identify most of these substantive changes. In this context the interests of the owners and the corporation are not one and the same. There is therefore a potential conflict of interest. This is only a small sample of the scope of changes. Agreeing to the new bylaws has major implications for the owners. It solicits approval of the special resolution from the Owners and Mortgagees.
Pursuant to item 7.2-12 in the code of conduct for the Law Society of Alberta which deals with when a lawyer deals on a client’s behalf (the condo corp) with an unrepresented person(s) (the owners and mortgagees), the lawyer must:
(a) advice the unrepresented person to obtain independent legal representation;
(b) take care to see that the unrepresented person is not proceeding under the impression that his or her interests will be protected by the lawyer; and,
(c) make it clear to the unrepresented person(s) that the lawyer is acting exclusively in the interests of the client (the condo corporation as directed by the board).
There are no such notices included in the letter. It is recognized that the full facts have not been provided to you.
Does this change your advice?
For clarification, the information provided on this blog and in response to comments is not legal advice and is provided for information purposes only. For legal advice specific to your particular situation, we recommend you retain and consult with legal counsel, as we are unable to provide advice in this forum and in the absence of a retainer agreement.
We bought a new condo within a 6 plex 2 years ago from the developer. There was an initial meeting amongst owners to nominate 4 board members as per the bylaws. No reserve fund or operating fund was set up and no subsequent AGM. Structural insurance was the only stated financial obligation noted and collected by the board president which must have been a painful process as the next year, the board president texted everyone that she resigns, 3 weeks before structural insurance is due. A 2nd board member texted everyone that she has no time to be involved and resigned forthwith. The 3rd board member circulated and hand delivered a notice to all unit holders that everyone needs to start working together given the urgency and managed to open bank accounts with the reluctant help of the other remaining board member so that funds for insurance could be deposited into a condo corp operating account. Insurance is due in a couple of weeks and only 3 people have verbalized their willingness to pay and 3 unit holders have indicated they will not pay. The real concern is that the reluctant board member is one of three unit holders who has verbally refused to pay their share of the insurance premium and therefore once the unit holders who pay their portion of the insurance premium and deposit in Condo corp bank account will require 2 signatures in order to make a minimum payment to the insurance company. Possible delinquent condo owners have been advised in letter format (hand delivered) of the urgency of the matter, the laws of condo owners as well as the condo bylaws and the potential implications with their mortgage holder, but to no avail. They have been advised of the need to establish and attend annual general meetings and the requirement of establishing a survey and reserve funds. These owners now refuse to answer their door and block their phone when the one remaining board member is trying to work to resolve issues and establish a healthy condo board.
I strongly encourage you to obtain legal advice. One option may be to get appointed to the Board by the remaining Board member(s), who has the power to fill vacancies left by members who have resigned. My concern is that with only one remaining member, the Board is not validly constituted. Whether you have specific bylaws registered for your corporation, or are subject to the Schedule 4 bylaws under the Alberta Condominium Property Regulations, there is a process for filling vacancies on the Board. If there is only one remaining Board member, he or she should call a special general meeting to address this issue and get sufficient Board members so that the Board is properly constituted. At that time, the Board should seek and obtain legal advice for the corporation about how to address these problems and enforce payment of assessments by all unit owners.
A condominium corporation cannot function without a Board to make decisions and act on its behalf. If the corporation is not managing its affairs properly or at all, this will severely hinder the ability of owners to sell their units. If the corporation is not maintaining the property, carrying adequate insurance, collecting sufficient fees to discharge its obligations, etc., it could also drastically decrease the value of each unit.
How can you get a condo board to change the by laws to allow Airbnb as ours does not allow under commercial ventures clause?
The Board cannot change the bylaws on its own. In Alberta, bylaw amendments can only be approved by special resolution of the unit owners. If you and the majority of owners want to see this change in your bylaws, you can petition your Board. If the Board does not respond to written requests, try petitioning to convene a Special General Meeting. The purpose would be to pass an ordinary resolution directing the Board to prepare bylaw amendments and circulate with the owners for a special resolution vote to approve the amendments. Owners can direct or restrict the Board from taking certain action in this manner, provided the direction or restriction is not otherwise in violation of the Act, regulations or bylaws.
It has just come to the Board’s attention that we cannot fine bylaw infractions as fines fees not outlined in our bylaws. How do we go about amending our bylaws and where can we find examples of bylaws addressing infractions with monetary levies.
Thank you
In Alberta, amending or replacing bylaws requires a special resolution vote by the unit owners (75% of all persons entitled to vote representing at least 7,500 unit factors, but note the word “entitled”, as owners who are in arrears are not entitled to vote). This requires the Board to prepare amendments or a replacement set of bylaws, and provide all registered unit owners with copies. It is highly advisable to engage legal counsel knowledgeable in condominiums in the province in which the property is located for preparation of such amendments or replacement bylaws and to assist with the special resolution.
If the owners petition for an extra ordinary meeting to make motion to amend a specific bylaw. Can a time limit be put on it? Can a special resolution to approve the amendment only happen at an AGM? Can a motion to put a moratorium on sanctions for the old bylaw be made?
I’m unclear on your question about a time limit. If owners representing at least 15% of the total unit factors sign and present a petition to the board requesting a special general meeting, the board must convene the meeting within 30 days of receiving the petition. A bylaw amendment requires a special resolution, meaning that at least 75% of all persons eligible to vote representing no less than 7,500 unit factors be in favour of the resolution. A special resolution can be done at a meeting or in writing, however practically, most corporations do not have sufficient attendance in person or proxy at general meetings to pass a special resolution. Issuing sanctions for violations of the bylaws is within the board’s discretion and is not mandatory. Owners can pass an ordinary resolution restricting the board from issuing sanctions, however the situation is more nuanced when bylaws are being changed. I recommend you seek legal advice applicable to your specific situation.
We have petitioned our board for an SGM and the management company came back with the response – that we are having an AGM in the next 60 days. The petition was sent in Aug 16th. Can they ignore this petition due to an upcoming AGM, or can we the owners just proceed with holding the SGM anyways.
Can a condo’s bylaws require more than 15% factor units to petition an SGM?
Yes, but a higher amount would be in conflict with the Act, which specifies that only 15% of the unit factors is required. In the event of a conflict between the Act and a corporation’s bylaws, the Act will prevail.
Thanks so much for the information!
How does a condominium owner get permission for a one-time exception to a condo by-law?
More information would be required to address this question, however in general, the board is statutorily required to enforce the bylaws, and does not have authority to grant exemptions, one-time or otherwise. Where changes have been made to the bylaws, or a new interpretation of existing bylaws is adopted, and the result of the change is that some owners are negatively affected, the board may choose to grandfather those owners to the previous bylaws or under the old interpretation. Grandfathering is the exception, not the rule, and the board is not obligated to offer or accede to a request, but it might do so where a refusal would result in oppression to a particular owner or group of owners. In almost all cases, the bylaws as a whole must be examined to determine whether, if at all, the board has any discretion over how (or whether) to apply or enforce a particular provision against an owner.
I’m in a bareland condo complex (fee simple) and our Board proposed a new 60 page Bylaw which has redefined the Act’s definition of ‘Managed Property’ to be the same as ‘Common Property’ with extensive rules that intend to control our privately own properties the same as they would ‘Common Property’. Is this a conflict with the Act which clearly defines ‘Managed Property’ as lands that are NOT ‘Common Property’?
Owners may choose to designate portions of their bareland units as “managed property” and detail the manner and extent to which the corporation will be responsible for maintenance, repair and replacement of same. This would not be a conflict with the Act. I caution only that “managed property” is a defined term in the Act and the definition in the bylaws should be consistent with this.
I find myself in a unique situation. I own 2/3 of 3 condos in a triplex and we are self managed. It’s clear that the other condo unit owner and myself don’t see eye to eye. Their voting before I came into owning has always been if it’s majority (50%) then majority wins. In that reasoning, then would I not always win, since by percentage, I sit at 60% ownership? Also how does that work when it comes to amending bylaws?
I should write that it’s a bareland condo. I’m not sure how the rules change regarding it, but I figured more information is less.
Condominium ownership is democratic and consensual. This means that the unit owners are able to collectively decide what terms will govern the property and each owner’s use of their unit through the bylaws, whether it’s a traditional (apartment-style) property, bare land condo, or something in between. For most issues, the decision is based on the will of the majority, and an ordinary resolution is used. In simplest terms, this requires more than 50% of the owners to be in favour. Some decisions however, like bylaw amendments, require a special resolution, or super-majority. To amend the bylaws, 75% of the owners must be in favour whose votes represent no less than 7,500 unit factors. The difficulty with small condominiums is that owners can become deadlocked, and effectively all owners either have to vote together (unanimity), or no major change like a bylaw amendment can happen. I suggest obtaining legal advice on this issue if the stalemate continues.
Erin, when changing the bylaws by written resolution with voting done by written ballot does proper parliamentary procedure require a date by which the voting must be finalized?
Parliamentary procedure refers to the rules governing meetings where votes are not normally conducted in writing but are done in person at the meeting. A special resolution in writing may not necessarily occur during a meeting, but it can. If not, it is simply good practice to impose a deadline for return of written ballots on which voting will be closed and no more votes counted. For these type of votes, it’s also good practice that no votes be counted and no results be communicated until the deadline for voting as passed, so as not to unfairly influence voters who have not yet returned their ballots.
Hi Erin, we are looking to purchase a villa bungalow in Calgary. This unit had an amendment order to the plus 55 age. If the 55 owner passes and his younger wife 35 survives him then the condo association agrees to allow the wife to live in that unit. Our question is this. We are 55 plus, we would like to purchase the unit, but our youngest daughter passed away and we are the sole guardian of her daughter. Our granddaughter just turned 18 and has started university, with a degree in forensic investigation. Can we amend the bylaw by special resolution? Does it need to be filed at land titles office? Can condo associations impose strict age limits? Is there another way to request an exemption? I heard the provincial condo association was talking about getting rid of any age restrictions? Have you heard this?
Thank you
You would need to have someone review the particular wording of the bylaws to determine if there is any leeway or board discretion to authorize your granddaughter who is under the age restriction to reside in the unit with you. 55+ age restrictions are still acceptable in Alberta, but no other new age restrictions are permitted as of 2018 (condos with existing restrictions for 18+, 25+, etc. are permitted to continue enforcing these until January 1, 2033). While a bylaw amendment is always possible through a special resolution (75% of all registered owners in favour, whose votes represent at least 7,500 unit factors), it sounds like the amendment to create the 55+ restriction has already been passed and registered at Land Titles. If you are seriously considering purchasing this unit I suggest that you obtain legal advice as well as an exemption/permission from the board of directors first if your granddaughter will be residing with you.
Hello,
My condo board has made an announcement for the prohibition of short-term rentals, but this is not converted into a bylaw. Is such an announcement legally binding?
Condo boards do not (generally) have authority to permit or restrict short-term rentals. This must be done in the bylaws, and the bylaws can only be changed by special resolution of the corporation (all the owners). The bylaws of the corporation would need to be examined to determine whether they give the board any discretion to approve or prohibit short-term rentals. The bylaws may not contain express provisions concerning short-term rentals, either, but instead may have to be interpreted with respect to provisions for non-residential or single-family use of units.