Is Your Condo Counting Special Resolutions Properly? Bill 19: Changes to Voting Procedures
May 13, 2022
Following publication of our last post, “Cutting More Red Tape: Long-Awaited Clarity on Legal Costs, Voting for Condominiums (you can read it here), I have received numerous inquiries from condo owners and property managers on how Bill 19 and proposed amendments to the Condominium Property Act will impact special resolution votes for condominium corporations in Alberta.
The predominant concern appears to be that the proposed legislative amendments will create confusion, not clarity, and that passing special resolutions will be made much more difficult and costly in terms of imposing additional administrative requirements. Many of these inquiries have also assumed that calculating the result of a special resolution vote is based on the total number of units in a condominium. As I will explain, this is incorrect.
A special resolution is defined in the Condominium Property Act as a resolution:
(i) passed at a properly convened meeting of a corporation by a majority of not less than 75% of all the persons entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units, or
(ii) agreed to in writing by not less than 75% of all the persons who, at a properly convened meeting of a corporation, would be entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units;
Bill 19 will not make any changes to this existing definition or have any impact on special resolution votes. A special resolution has always been based on the total number of persons entitled to vote, as well as the total unit factors for the corporation (in every case in Alberta, the latter is 10,000). If your condominium has been calculating special resolutions based on the total number of units that submitted ballots or cast votes, and then dividing this figure by the total number of units in the property, it has been calculating the special resolution results incorrectly.
Further, the proposed amendments under Bill 19 – if passed – will only affect ordinary resolutions conducted at general meetings of the corporation. There has long been confusion over how to calculate votes conducted at condo owners’ meetings. The two common terms used in the Schedule 4 bylaws under the Condominium Property Regulation, and which are replicated in most condo corporations’ bylaws, are votes by a show of hands and by a poll. Unfortunately these were never defined in the legislation, and there has been a lot of debate among condo lawyers on various issues related to these concepts. For example, is a person who owns more than one unit entitled to multiple votes, i.e. one vote for each unit owned? Another common question is how are votes by co-owners to be counted? Is each co-owner entitled to one vote, or to one vote between them?
Bill 19 addresses this confusion by introducing two new terms to better define what is meant by a show of hands and a poll vote. The new terms are, respectively, “owner vote” and “unit factor vote”. An “owner vote” means a vote on the basis of one vote per unit owner, whereas a “unit factor vote” simply means a vote on the basis of the unit factors for a particular owner’s unit. These are proposed as the new default methods of voting at a general meeting unless the condo corporation’s bylaws provide otherwise, and are defined as follows:
- In the case of an owner vote, where a unit is owned by more than one person, each person is entitled to one vote.
- Where a person owns more than one unit, that person is only entitled to a single vote for all the units he or she owns, and is not permitted to assign proxies to multiple persons.
- In the case of a unit factor vote, where a unit is owned by more than one person, each owner’s vote represents only that portion of the unit factors for the unit equal to the portion of the unit owned by that person.
- If a co-owner does not attend a general meeting at which a unit factor vote occurs and has not assigned his or her proxy, that co-owner’s share of unit factors are not counted in determining the results of the vote.
For many condo corporations, nothing will change if the amendments in Bill 19 come into force and become law. But all condo corporations should review their bylaws and their voting procedures in order to ensure and/or bring them into compliance with these new provisions if and when Bill 19 is passed.
Some helpful tips:
- Condominium corporations must maintain current owner lists and update these periodically whenever there are any changes.
- Requests for estoppel certificates and written notices received from mortgagees are indicators that there are pending transfers or other dealings with a unit such as a sale or foreclosure. When these occur, the condo corporation should monitor the situation and update their owner list accordingly.
- At least once a year, condo corporations should request that all owners provide their updated contact information so that the owner list can be kept accurate and current.
Although it is the unit owner’s responsibility to keep the condo corporation informed whenever there are changes in the ownership of the unit or to the owner’s contact information, following these steps should help condominium corporations remain reasonably certain that their owner list is kept as accurate as possible. This may avoid the need to obtain certificates of title in advance of every annual or other general meeting. However, and given the importance of special resolution votes to every unit owner, we recommend that the condo corporation obtain current unit titles from the Land Titles Office in advance of every special resolution vote to be conducted.
We hope this clarifies the voting changes being proposed under Bill 19. If you are a condo owner, board member or property manager and you have questions about these changes or any other matter affecting your condo corporation, please contact us. Please note that Bill 19 is not yet in force, and is still subject to change.
So if I am reading this correctly, in an owner vote, a unit with only one owner gets less say in matters than a unit with multiple owners. Does this not seem like a problem and unfair?
Most owner votes (remember these are only votes taken at meetings of the corporation) will be procedural items such as approval of agendas, and as such are generally non-contentious. In my experience, most co-owners are also typically aligned in interest and would tend to cast the same vote on a given issue, however this is not always the case. Nonetheless, I would suggest that this proposed change (which is not yet passed, and won’t have that opportunity until the Legislature resumes sessions in the Fall) actually increases fairness by eliminating scenarios whereby an owner (often a developer or a corporate owner renting units, who have vastly different interests at stake than individual unit owners who occupy their units) monopolize voting.
The article states: Where a person owns more than one unit, that person is only entitled to a single vote for all the units he or she owns, and is not permitted to assign proxies to multiple persons. Is this statement in reference to an “owner vote” or to a “unit factor vote”? Our board has interpreted the current voting requirements to mean that in a vote taking place by a show of hands, an owner of multiple units has only one vote; whereas in a poll vote or for the purposes of a special resolution vote, the owner of multiple units has either one vote per unit owned or a vote equal to the total unit factors they own.
This is in reference to owner votes taken at meetings of the corporation.
Clarifying Special Resolution Counts:
(i) passed at a properly convened meeting of a corporation by a majority of not less than 75% of all the persons entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units, or
(ii) agreed to in writing by not less than 75% of all the persons who, at a properly convened meeting of a corporation, would be entitled to exercise the powers of voting conferred by this Act or the bylaws and representing not less than 75% of the total unit factors for all the units;
This would mean, if I am understanding correctly, that at least 75% of units eligible to vote must say yes, and; additionally, that this number must be equal to 75% or more of the total number of units (whether all are eligible to vote or not)?
Example (whether in person or in writing): In a 73 unit complex, a minimum of 55 units must say yes … is that correct?
If 65 units are eligible to vote, but only 49 units voted yes, this is not sufficient to pass a Special Resolution?
Thank you.
No, the definition is based on the total number of persons eligible to vote and the total number of unit factors (which in Alberta is always 10,000). The number of units is actually irrelevant. For any special resolution vote, the condo corporation needs an accurate, up to date list of all registered unit owners, and often this will require obtaining copies of all certificates of title for the units in the property before the vote. Each registered owner who is not in arrears would be eligible to vote. So if one unit owned by 3 people, that unit would have 3 potential votes, with each vote representing a proportionate amount of the unit factors allocated for that unit.
Hi Erin. I own a bare land condo unit in a development that will have a total of 554 units when all phases are complete. Currently only half the phases are ready for sale and of those, about 175 have been sold. This means the Developer has the majority of the units, and the majority of seats on the Board. How can we ever make bylaw changes or for that matter make any decisions when he controls the majority of the units? Even if we were to call for a Special Resolution the Developer can over ride any decision or bylaw change that we make. Is this correct?
Much depends on the specific style of development, such as whether this is a true phased development or a bare land redivision. The developer will have different statutory obligations to unit owners under each style in terms of completing the development and arranging for a turnover meeting (first AGM). In order to determine the difference, review of the corporation’s plans and other documents would be necessary. I recommend you obtain legal advice applicable to your specific situation.
We are a bareland condo corporation, many of our owners own multiple lots. We have been tasked with issuing a special resolution and we are curious if the 75% of all persons eligible to vote are counted with each lot or if they are only counted once with the total number of unitfactors that person holds counting for the 75% of unit factors? For example, I own 2 lots with a total of 90 unitfactors (45 each). Should I be considered as 1 or 2 for persons eligible to vote? Thanks in advance
Each “person eligible to vote” is only counted once, regardless of the number of units they own.
We are considering dissolving our Condo Corporation. What are the reasons or conditions the Court will accept for dissolution?
Some of our unitholders are registered companies, how do we determine who is eligible to cast a vote in a special resolution?
We are a Bareland Condominium registered at Land Titles. We have special worded Bylaws that state all land inside the survey markers is now Managed Property .
When it is a Bareland Condo, the homeowner is the owner of the land inside the survey markers, but by moving that land to Managed Property, does this land now become the Condo’s property, and all unit Owners own it. Or does it still remain the Owners property, but they do not have to maintain it? Therefore, the homeowner still has the right to do whatever with that portion of land.
“Managed Property” is, ever since a decision by the Court in 2012, now a defined term in the Act. It’s a special term that generally only applies in bare land condominium properties. It means “any unit or part of a unit that a corporation is required by bylaw to maintain, repair or replace, other than the real and personal property of the corporation and the common property.” Where a corporation’s bylaws specify that it is required to maintain certain portions of the individually owned units, this does not mean that the corporation now owns those portions of the units, only that it has the duty (and right) to do specified maintenance, repairs or replacements as needed, and usually in the board’s sole determination. In these circumstances, the duties (and rights) of the unit owner with respect to those portions of the unit (the managed property) may be somewhat limited or restricted. Your bylaws would need to be examined to determine the extent to which the owners’ duties and rights in respect of the managed property are limited, and what duties and rights have been conveyed to the corporation.