The Condominium Act, 1998

PART IV, Sections 56 to 71

CORPORATION

(1) The board may, by resolution, make, amend or repeal by-laws, not contrary to this Act or to the declaration,

(a) to govern the number, qualification, nomination, election, resignation, removal, term of office and remuneration of the directors, subject to subsection (2);

(b) to regulate board meetings, the form of board meetings and the quorum and functions of the board;

(c) to provide that the quorum for the transaction of business at a meeting of owners is those owners who own 33 1/3 per cent of the units of the corporation, subject to subsection 50 (2);

(d) to govern the appointment, remuneration, functions, duties, resignation and removal of agents, officers and employees of the corporation and the security, if any, to be given by them to it;

(e) subject to subsection (3), to authorize the borrowing of money to carry out the objects and duties of the corporation;

(f) to authorize the corporation to object to assessments under the Assessment Act on behalf of owners if it gives notice of the objections to the owners, and to authorize the defraying of costs of objections out of the common expenses;

(g) to govern the assessment and collection of contributions to the common expenses;

(h) to establish what constitutes a standard unit for each class of unit specified in the by-law for the purpose of determining the responsibility for repairing improvements after damage and insuring them;

(i) to extend the circumstances described in subsection 105 (2) under which an amount shall be added to the common expenses payable for an owner's unit for the purposes of subsection 105 (3);

(j) to govern the maintenance of the units and common elements;

(k) to restrict the use and enjoyment that persons other than occupants of the units may make of the common elements and assets of the corporation, subject to any agreement made by the corporation with respect to the use and enjoyment of its common elements and assets that it shares with another person;

(l) to govern the management of the property;

(m) to govern the use and management of the assets of the corporation;

(n) to specify duties of the corporation in addition to the duties set out in this Act and the declaration;

(o) to establish the procedure with respect to the mediation of disputes or disagreements between the corporation and the owners for the purpose of section 125 or 132; or

(p) to govern the conduct generally of the affairs of the corporation.

(2) A by-law relating to the remuneration of directors shall fix the remuneration and the period not exceeding three years for which it is to be paid.

Borrowing by-law

(3) A corporation shall not borrow money for expenditures not listed in the budget for the current fiscal year unless it has passed a by-law under clause (1) (e) specifically to authorize the borrowing.

Assessment complaint

(4) If the board has made a by-law under clause (1) (f), the corporation shall have the capacity and authority to make a complaint under section 40 of the Assessment Act on behalf of owners but shall not be liable for an alteration in the assessment of a unit or for any other matter relating to the complaint, except for the costs of the complaint.

(5) Despite a by-law made under clause (1) (f), on written notice to the board and to the Assessment Review Board given before the hearing of a complaint under section 40 of the Assessment Act, an owner may withdraw a complaint that the corporation has made on the owner's behalf.

By-laws to be reasonable

(6) The by-laws shall be reasonable and consistent with this Act and the declaration.

Same, proposed by-laws

(7) By-laws proposed by the declarant before the registration of a declaration and description shall be reasonable and consistent with this Act and the proposed declaration.

Inconsistent provisions

(8) If any provision in a by-law or a proposed by-law is inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the by-law or proposed by-law, as the case may be, shall be deemed to be amended accordingly.

Registration

(9) For each by-law of a corporation, an officer of the corporation shall certify a copy of the by-law as a true copy and the corporation shall register the copy in,

(a) the land titles division of the land registry office within the boundaries of which division the land described in the description is situated, if the land registry office has a land titles division; or

(b) the registry division of the land registry office within the boundaries of which division the land described in the description is situated, if the land registry office does not have a land titles division.

(10) A by-law is not effective until,

(a) the owners of a majority of the units of the corporation vote in favour of confirming it, with or without amendment; and

(b) a copy of it is registered in accordance with subsection (9).

(11) Despite subsection (10), a by-law proposed by the declarant before the registration of the declaration and description shall be effective until it is replaced or confirmed by a by-law of the corporation that takes effect in accordance with subsection (10).

Section 57.

(1) Subject to section 56, the board may, by resolution, make, amend or repeal by-laws not contrary to this Act or the declaration that establish standards for the occupancy of units of the corporation for residential purposes.

Standards

(2) The standards shall be,

(a) the occupancy standards contained in a by-law passed by the council of a municipality in which the land of the corporation is situated; or

(b) subject to the regulations made under this Act, standards that are not more restrictive than standards that are in accordance with the maximum occupancy for each unit based on the maximum occupancy for which the building in which the units are located is designed.

(3) A by-law passed under subsection (1) may prohibit persons from occupying units of the corporation that do not comply with the standards set out in the by-law.

Assessments

(4) If the board has passed a by-law under subsection (1) and a person contravenes the standards for the occupancy of a unit set out in the by-law, the board may, by resolution, levy against the unit,

(a) an assessment for the amount that reasonably reflects the amount by which the contravention increases the cost of maintaining the common elements and repairing them after damage; and

(b) an assessment for the amount that reasonably reflects the amount by which the contravention increases the cost of using the utilities that form part of the common expenses.

(5) The assessments mentioned in subsection (4) shall form part of the contribution to the common expenses payable for the unit.

Section 58.

(1) The board may make, amend or repeal rules respecting the use of common elements and units to,

(a) promote the safety, security or welfare of the owners and of the property and assets of the corporation; or

(b) prevent unreasonable interference with the use and enjoyment of the common elements, the units or the assets of the corporation.

(2) The rules shall be reasonable and consistent with this Act, the declaration and the by-laws.

Same, proposed rules

(3) Rules proposed by the declarant before the registration of a declaration and description shall be reasonable and consistent with this Act, the proposed declaration and the proposed by-laws.

Inconsistent provisions

(4) If any provision in a rule or a proposed rule is inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the rule or proposed rule, as the case may be, shall be deemed to be amended accordingly.

Amendment by owners

(5) The owners may amend or repeal a rule at a meeting of owners duly called for that purpose.

Notice of rule

(6) Upon making, amending or repealing a rule, the board shall give a notice of it to the owners that includes,

(a) a copy of the rule as made, amended or repealed, as the case may be;

(b) a statement of the date that the board proposes that the rule will become effective; and

(c) a statement that the owners have the right to requisition a meeting under section 46 and the rule becomes effective at the time determined by subsections (7) and (8).

(7) Subject to subsection (8), a rule is not effective until,

(a) the owners approve it at a meeting of owners, if the board receives a requisition for the meeting under section 46 within 30 days after the board has given notice of the rule to the owners; or

(b) 30 days after the board has given notice of the rule to the owners, if the board does not receive a requisition for the meeting under section 46 within those 30 days.

Same, proposed rule

(9) Despite subsection (7), a rule proposed by the declarant before the registration of the declaration and description shall be effective until it is replaced or confirmed by a rule of the corporation that takes effect in accordance with subsection (7).

Compliance

(10) All persons bound by the rules shall comply with them and the rules may be enforced in the same manner as the by-laws.

Section 59.

(1) The boards of two or more corporations may make, amend or repeal joint by-laws or rules governing the use and maintenance of shared facilities and services.

Application to corporations

(2) A joint by-law or rule is a by-law or rule, as the case may be, of each corporation.

When joint by-law effective

(3) A joint by-law is not effective until,

(a) the majority of the owners of the units of each corporation vote in favour of confirming it, with or without amendment; and

(b) each corporation registers a copy of it in accordance with subsection 56 (9).

(4) The vote of the owners under clause (3) (a) may be at a joint meeting of the corporations duly called for that purpose.

Repeal of joint by-law

(5) Once a joint by-law is effective, it is effective until the owners of a majority of the units of each corporation vote in favour of repealing it and a copy of the repealing by-law is registered in accordance with subsection 56 (9).

Amendment of joint rule

(6) The owners of each corporation may amend or repeal a joint rule at a joint meeting of owners of the corporations or at a meeting of owners of each corporation if the meeting has been duly called for that purpose.

Notice of joint rule

(7) Upon making, amending or repealing a joint rule, the board of each corporation shall give a notice of the joint rule to its owners that includes,

(a) a copy of the rule as made, amended or repealed, as the case may be;

(b) a statement of the date that the boards propose that the rule will become effective; and

(c) a statement that the owners have the right to requisition a meeting under section 46 and the rule becomes effective at the time determined by subsections (8), (9) and (10).

(8) Subject to subsection (10), if the board of any of the corporations receives a requisition for a meeting under section 46 within 30 days after it gives notice of the joint rule to its owners, the joint rule is not effective until the owners approve it at a joint meeting of owners of the corporations or at a meeting of owners of each corporation.

Same, no requisition

(9) Subject to subsection (10), if the board of none of the corporations receives a requisition for a meeting under section 46 within 30 days after it gives notice of the joint rule to its owners, the joint rule is not effective until 30 days after the board of each corporation has given notice of the joint rule to its owners.

Same, previous rule

(10) A joint rule or an amendment to a joint rule that has substantially the same purpose or effect as a joint rule that the owners have previously amended or repealed within the preceding two years is not effective until the owners of each corporation approve it, with or without amendment, at a joint meeting of owners of the corporations or at a meeting of owners of each corporation duly called for that purpose.

(1) At their first meeting, the owners shall appoint one or more persons qualified to be auditors to hold office as auditors until the close of the next annual general meeting and, if the owners do not do so, the board shall make the necessary appointments as expeditiously as possible.

Same, subsequent years

(2) At each annual general meeting, the owners shall appoint one or more persons qualified to be auditors to hold office as auditors until the close of the next annual general meeting and, if the owners do not do so, the auditor in office continues in office until a successor is appointed.

Appointment by court

(3) If for any reason no auditor is appointed as required by this section, the Ontario Court (General Division) may, on the application of an owner,

(a) appoint one or more persons qualified to be auditors to hold office as auditors until the close of the next annual general meeting;

(b) fix the remuneration that the corporation shall pay for the services of the auditor who is appointed; and

(c) fix the amount that the corporation shall pay to the owner for the cost of the application.

(4) The corporation shall give notice in writing to an auditor of the appointment immediately after the appointment is made.

Exception

(5) The owners of a corporation shall not appoint auditors under subsection (2) at an annual general meeting if,

(a) a turn-over meeting has been held under section 43;

(b) the corporation consists of fewer than 25 units; and

(c) as of the date of the meeting, all the owners consent in writing to dispense with the audit mentioned in subsection 67 (1) until the next annual general meeting.

Section 61.

No person shall act as auditor of a corporation if the person,

(a) is a director, officer or employee of the corporation;

(b) is a manager under an agreement for the management of the property of the corporation;

(c) has an interest in a contract to which the corporation is a party; or

(d) is a partner, employer or employee of a person mentioned in clause (a) or (b).

Section 62.

The remuneration of an auditor shall be fixed,

(a) by the owners if the auditor is appointed by the owners; or

(b) by the board if authorized by the owners to do so or if the auditor is appointed by the board.

Section 63.

(1) The owners may remove an auditor before the expiration of the auditor's term of office at a meeting duly called for that purpose.

Replacement

(2) If the owners remove an auditor under subsection (1), they shall, at the same meeting, appoint a person qualified to be an auditor to act as auditor for the remainder of the term of the auditor who was removed.

Approval

(3) The removal of an auditor and the appointment of an auditor under subsection (2) requires the approval of the majority of votes cast by the owners who are present at the meeting in person or by proxy.

Notice to auditors

(4) At least 30 days before giving the owners notice of a meeting for the purpose of removing an auditor, the person calling the meeting shall give to the auditor,

(a) written notice of the intention to call the meeting, specifying the date on which the notice of the meeting is proposed to be mailed;

(b) a statement of the name of the auditor who is proposed to be removed and the reasons for the removal; and

(c) a copy of all material proposed to be sent to the owners in connection with the meeting.

(5) An auditor may make written representations to the corporation concerning the proposed removal of the auditor or the appointment of another person to fill the office of auditor.

Method

(6) In order to make representations under subsection (5), an auditor shall send them to the person calling the meeting at least three days before the mailing of the notice of the meeting.

Notice of meeting

(7) The person calling the meeting shall, at the expense of the corporation, include in the notice of the meeting,

(a) a statement of the name of the auditor who is proposed to be removed and the reasons for the removal; and

(b) a copy of all representations received.

Section 64.

(1) A resignation of an auditor becomes effective at the time a written resignation is delivered to the corporation or at the time specified in the resignation, whichever is later.

Representations

(2) In a resignation, the auditor may make written representations to the corporation concerning the resignation and in that case the corporation shall attach a copy of the representations to the notice of the next meeting of owners.

Section 65.

(1) If a vacancy arises in the office of auditor, the directors may appoint any person qualified to be an auditor to hold office as auditor to fill the vacancy.

Term of replacement

(2) An auditor appointed under subsection (1) shall hold office until the close of the next annual general meeting or until a successor is appointed, whichever is later.

Section 66.

(1) A corporation shall have its financial statements prepared in the prescribed manner and in accordance with generally accepted accounting principles as are prescribed.

Contents

(2) The financial statements shall include,

(a) a balance sheet;

(b) a statement of general operations;

(c) a statement of changes in financial position;

(d) a statement of reserve fund operations;

(e) prescribed information relating to the reserve fund study and the operation of the reserve fund;

(f) an indication of the aggregate remuneration paid to the directors in that capacity and the aggregate remuneration paid to the officers in that capacity; and

(g) the additional statements or information that the regulations made under this Act require.

(3) The board shall approve the financial statements before placing them before an annual general meeting.

Form of approval

(4) The approval shall be evidenced by the signature at the bottom of the balance sheet by two of the directors duly authorized to sign.

Section 67.

(1) The auditor shall, every year, make the examination that is necessary in order to make an annual report on the financial statements to the corporation on behalf of the owners.

Right of access

(2) The auditor has right of access at all times to all records, documents, accounts and vouchers of the corporation and is entitled to require from the directors, officers and employees of the corporation or from persons under contract to the corporation to manage the property or its assets the information and explanations that, in the auditor's opinion, are necessary in order to make the report.

Standards

(3) The auditor's report shall be prepared in the prescribed manner and in accordance with generally accepted auditing standards as are prescribed.

Contents of report

(4) The auditor shall include in the report the statements that the auditor considers necessary if the corporation's financial statements are not in accordance with the requirements of this Act and the regulations made under it.

Same, reserve fund study

(5) The auditor shall state in the report whether the statement of reserve fund operations and any other prescribed information relating to the operation of the reserve fund and contained in the financial statements do not fairly present the information contained in the reserve fund studies that the auditor has received.

Presentation of report

(6) The auditor shall present the auditor's report to the audit committee described in subsection 68 (1) or to the board if there is no audit committee.

Immunity

(7) Except with respect to the contents of the report, no action or other proceeding for damages shall be instituted against an auditor or a former auditor for any oral or written statement made in good faith in the execution or intended execution of the duty as auditor under this Act.

Section 68.

(1) If the number of directors of the corporation is more than six, the directors may elect annually from among their number a committee to be known as the audit committee to hold office until the next annual general meeting.

Members

(2) The audit committee shall be composed of at least three directors and the majority of committee members shall not consist of officers or employees of the corporation.

Review of statements

(3) On receiving the financial statements, the auditor's report and an amended auditor's report, if any, the audit committee shall review them and submit them to the board.

Auditor to appear

(4) The auditor has the right to appear before and be heard at any meeting of the audit committee and shall appear before the committee when the committee so requires.

Meeting at auditor's request

(5) At the request of the auditor, the audit committee shall convene a meeting of the committee to consider all matters the auditor believes should be brought to the attention of the board or the committee members.

Section 69.

(1) The board shall place before each annual general meeting,

(a) the financial statements as approved by the board;

(b) the auditor's report; and

(c) all further information respecting the financial position of the corporation that the by-laws of the corporation require.

(2) The corporation shall attach to the notice of the annual general meeting a copy of the financial statements and the auditor's report.

Section 70.

(1) The auditor is entitled to attend a meeting of owners and to be heard on any part of the business of the meeting that concerns the office of the auditor.

Notice of meetings

(2) The corporation shall give the auditor notice of all meetings of owners and all other communications relating to the meetings that the owners are entitled to receive.

Attendance required

(3) The corporation or an owner may require that an auditor or a former auditor attend a meeting of owners for the purpose of answering inquiries described in subsection (6) by giving written notice to the person whose attendance is required, at least five days before the meeting, that the person's presence is required.

Notice to corporation

(4) An owner who gives written notice to an auditor or former auditor under subsection (3) shall give a copy of the notice to the corporation.

Remuneration for attendance

(5) If an auditor or a former auditor is required to attend a meeting of owners, the corporation shall compensate the auditor or former auditor, as the case may be, for expenses and pay the reasonable remuneration that it deems appropriate.

Duty to answer questions

(6) At a meeting of owners, the auditor or former auditor, as the case may be, if present, shall answer inquiries concerning the basis upon which the person formed the opinion stated in the person's reports.

Section 71.

(1) The board shall amend the corporation's financial statements if facts come to the attention of the directors or officers of a corporation after the annual general meeting and the facts require a material adjustment to the financial statements that were presented at the meeting.

Copy of amended statements

(2) Immediately after making an amendment, the corporation shall send to the auditor a statement of the facts that gave rise to the amendment and a copy of the amended financial statements.

Amendment of auditor's report

(3) On receiving the statements furnished under subsection (2), the auditor shall amend the auditor's report if the auditor is of the opinion that it is necessary and in that case shall present it to the audit committee or to the board if there is no audit committee.

Delivery of amended report

(4) The board shall mail or deliver a copy of the amended report to the owners.

Same, by auditor

(5) If the board does not mail or deliver a copy of the amended report to the owners within a reasonable time, the auditor shall mail or deliver a copy of the amended report to the owners and the corporation shall reimburse the auditor for the reasonable costs incurred in the mailing or the delivery.