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After November 1, 2017, Directors and Candidates Must Disclose Certain Information to Owners
by Deborah Howden
Consistent with the provincial government's focus on better protection for condo owners in the province, effective November 1, 2017 there are new disclosure obligations for directors. The disclosure obligations apply to all sitting board members (elected, re-elected or appointed) and to candidates for board positions. These mandatory disclosure obligations are imposed with a view to improving the manner in which condos are managed and operated. Directors and candidates are required to disclose the following:
- whether they are an owner of a unit in the condo;
- whether they live in a unit in the condo;
- whether they are 60 days or more in arrears of their common expenses contributions;
- whether they have been convicted of an offence under the Condominium Act or its regulations in the past 10 years;
- whether they (or their immediate family) are involved in legal proceedings with the corporation;
- whether an occupier of their unit, or a unit owned by their spouse, or a person that they live in a unit with, is involved in legal proceedings with the corporation;
- whether they (or their immediate family), are a party to or have a material interest in a contract or transactions with the corporation or the developer (other than as purchaser, mortgagee, owner or occupier of a unit); and
- anything else that the condominium corporation’s by-laws require them to disclose.
- Candidates are required to disclose this information before the election, either when they submit their candidacy in the Notice of Meeting package or at a meeting, if nominated from the floor or appointed by the Board. If a person is or becomes a director, they are subject to ongoing disclosure requirements for the duration of their term. The disclosure obligations apply to every condominium director and candidate in the Province of Ontario from and after November 1, 2017. Failure to meet the disclosure requirements immediately disqualifies the person from being a director. It is important to keep a couple of points in mind. First, the requirement to disclose "offences" relates only to offences for which the person has been convicted (not charged) under the Condominium Act. Contrary to some misconception, there is no obligation to disclose either charges or convictions under the Criminal Code or under other legislation, unless of course the Corporation's bylaws so require. Parenthetically, we are unaware of anyone ever being charged or convicted of an offence under the Condominium Act to date. In addition, the requirement is that the candidate or director merely disclose the information. None of the matters listed above actually disqualifies a person from being a director under the regulations, even if, for example, they are a party to a contract with the developer or are involved in litigation against the Corporation. The requirement is simply that the information be disclosed. Directors and candidates should not be deterred by the new disclosure obligations. Though the requirements appear burdensome, we expect that in a great majority of cases, there will be nothing for the candidate or director to disclose, apart from the fact that they own or live in a unit.
Shibley Righton has created a candidate disclosure form that you may wish to use. Please click the link below to download the form.