Being ‘creative’ with procedures paves way for future disputes
Tony Gioventu
Province
Dear Condo Smarts: We think our strata council pulled a fast one on us at the last annual general meeting. We voted on our proposed annual budget, and the budget was defeated.
The strata council for the next year was elected, and then most owners, including us, left the meeting while they counted the ballots for council elections. Once the new council was announced, an owner suggested that the owners reconsider the budget, with some amendments, and vote on it again.
Instead of voting on the budget, the owners decided to adjourn the meeting for seven days and vote on a new budget.
The meeting was held last week and the new budget was passed, but now several owners who were on vacation are challenging the decision. They claim it was illegal for the council to adjourn the meeting. We’ve looked through the [Strata Property] Act but can’t find any definitive answer.
— J.S., Kelowna
Dear J.S.: Legislation does not always provide a direct answer to a specific scenario.
The Strata Property Act, Regulations and Standard Bylaws, grant only one possible provision for adjournment: In the event the strata does not obtain a quorum for a meeting, and does not have an alternative bylaw, the meeting would stand adjourned and reconvene at the same time and location seven days later, with the same agenda.
There is no provision in the legislation to adjourn a meeting to vote on new materials or a new agenda.
The act requires that matters to be voted on, including a proposed budget, must be included with the notice. The purpose of the legislation is to ensure that registered owners receive proper notice of all matters that the strata corporation is voting on at general meetings. Any such decisions could significantly affect the use, enjoyment, economics or the salability of a strata lot.
The agenda on the standard bylaws does not use the word adjourn to end the meeting. The terminology is “terminate.” Your bylaws also use “terminate” to end a meeting.
If a new meeting needs to be convened, council must send out a new notice, in the prescribed time period, to the registered owners along with Form C requisitions. (A mortgage holder who has issued this formal request for notification could also challenge the lack of notice for the meeting.) Also, if a resolution does not pass at the beginning of the meeting, there is no provision to reconsider that resolution later in the same meeting.
In your situation several owners had already left the meeting, therefore, if the strata corporation had decided to proceed with the proposed amendment to reintroduce an agenda item it would have placed your strata corporation in a complicated situation. It would have created a situation where you had not given proper notice of the amended budget to all registered owners, plus, there was no provision on the agenda to reconsider the item after it had been defeated.
Annual budgets can be amended by majority vote before they are voted on. Try to seek some consensus with the owners before you take the final vote on the budget. If the budget is not approved, the strata must, within 30 days, prepare a new budget and place it before the owners at a special general meeting for consideration. A properly ratified 3/4 vote at a general meeting may permit a longer period before the new budget is voted on.
Another issue that complicates adjournments is the matter of proxies. Most proxy votes are date specific. If a meeting is adjourned, or a new meeting is required, those proxies are no longer valid, unless the date and time has been amended in writing by the owner of the strata lot issuing a proxy.
Budgets, bylaws and major decisions can all be jeopardized by attempting to be creative with the legislation. Stick to the proper procedures and save yourself from future disputes.
Tony Gioventu is executive director of the Condominium Home Owners’ Association E-mail [email protected]
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