Amending Bylaws by Ordinary Resolution: When is a Conflict a Conflict?

November 18, 2020

Amending Bylaws by Ordinary Resolution: When is a Conflict a Conflict?

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Ordinarily, condominium bylaws can only be amended, repealed or replaced by special resolution, which requires obtaining the approval of at least 75% of all persons eligible to vote, whose collective votes represent at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.

Erin Berney

Erin Berney

Erin Berney possesses extensive experience in all manner of residential and commercial condominiums, from traditional, bare land and phased-style development, to “barely blended”, duplex, mixed use, and rural developments. She has been a condo owner in downtown Edmonton since 2005, and has served on the Board of Directors as Treasurer, Secretary and Chair of the Bylaw Review Committee. This gives her unique insight and invaluable knowledge and experience that she brings to her clients.

13 thoughts to “Amending Bylaws by Ordinary Resolution: When is a Conflict a Conflict?”

  1. 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.

    1. 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.

      1. 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.

        1. 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.

  2. 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?

    1. 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.

      1. 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?

        1. 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.

  3. 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 deliquent 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.

    1. 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.

  4. How can you get a condo board to change the by laws to allow Airbnb as ours does not allow under commercial ventures clause?

    1. 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.

Leave a Reply

Your email address will not be published. Required fields are marked *