Financial transactions must be routinely reviewed and compared to invoices and accounts

Tony Gioventu
The Province

Dear Tony:

An issue has come up at our council meeting with our manager dealing with the signing authority on cheques and our accounts.

We have two council members who have created friction with our property manager and are now questioning their integrity because they have sole signing authority on our trust funds.

Should our strata corporation be concerned about the management of the trust funds and the lack of scrutiny over the cheques that are issued, or is there a better approach to ensure the strata corporation has controls to deal with our concerns?

— Martin W., Langley

Dear Martin:

Whether your strata corporation is self-managed or in an agency management agreement, the most important role in the relationship in financial operations is the review and the leadership of the strata council.

Under an agency agreement, the strata corporation’s funds are held in trust in the name of the strata corporation. Trust funds must not be pooled with any other strata corporation, and specific funds like operating accounts, special levy accounts and contingency funds must all be accounted for separately. Each account will have a monthly financial report.

As the funds are held by the strata management agency, the broker or authorized signatory is responsible for authorizing payments to approve cheques or electronic transactions.

Multiple signing officers inevitably just delay transactions causing greater problems and often replace review of the financial statements, which is much more important.

In the event there is a dispute or claim over an unauthorized expense, the funds have limited insurance coverage through the Real Estate Council Compensation Fund, which has rarely been accessed.

If there is a financial irregularity that cannot be resolved, your first call as a strata corporation is to the Real Estate Council. The agency management of receivables and payables is the first step in the financial management process; however, it is the responsibility of the strata council to review the reconciled monthly financial statements, bank statements, payments, and receivables.

Your management company likely processes thousands of transactions monthly with multiple strata corporations, often using the same service providers. Incorrect allocations or errors can easily occur, and on a financial review, they are identified and adjusted.

Still, it is up to the strata council to review the monthly financials in detail. Compare the payables to invoices that are preauthorized as routine expenses or infrequent payables for designated projects and budget items. A summary of the payables and receivables each month helps to make the review easier for the treasurer and council to review.

If your strata corporation is self-managed, the risks of loss or fraud have been reported more frequently as volunteers tend not to challenge each other on the credibility of documents, the provision of monthly financial reports, or challenge the integrity of transactions.

Watch for individuals who often place themselves in positions where they have sole control over the strata bank accounts and transactions and refuse access to other council members. If you have a treasurer who is not providing access to bank statements for all accounts, is not providing routine financial statements, which could be monthly or quarterly depending on the size of your strata corporation, or who is withholding copies of invoices and cancelled cheques, alarms bells should be sounding. If your treasurer misappropriates your strata funds, it is too late, there is no insurance coverage.

For self-managed strata corporations, basic financial management policies should include: a minimal number of signing officers on the accounts of at least three, if possible, a council member receiving a financial payment is never permitted to sign their own cheque, all council members have access to view the bank statements, separate accounts are created for operating funds and contingency/special levy funds, no cash is ever accepted or handled, and the council routinely review all financial transactions.

The best prevention of financial risks is to be proactive. Routinely, review all transactions and compare them to invoices and accounts.

© 2020 Postmedia Network Inc.

Maintenance issues – pay now or pay more later

Tony Gioventu
The Province

Dear Tony:

Our strata council is trying to cut corners on costs this year as we have experienced dramatic increases in our insurance costs.

As an owner and council member, I am concerned that we are not meeting the requirements of our basic operations. And possibly exposing ourselves to even higher claims that could result in damages to strata lots and common property that, in the end, will simply cost us more.

A recent decision to eliminate the landscape contractor resulted in a ground floor flood last week, as the irrigation system was not being maintained through July, which was a routine part of the scheduled maintenance and servicing.

The flood resulted from a leaky sprinkler head that was reported to council in early July and not addressed until an owner reported their patio filling with water.

The damage to the strata lot was nothing more than a wet carpet, but, as a strata council member, at what point do we, the council and the corporation, start to take on liability for bad business decisions?

The council has basically taken the position that they will address problems as they arise.

— Kyle J. ,White Rock

Dear Kyle:

As a property owner and council member, you have the legislated obligation under the Strata Property Act to maintain and repair common property and common assets.

Your owners’ also approved a budget — including landscaping services — which is also a lawful instruction to implement the contracts wherever possible.

Regardless of the size or type of a strata corporation, annual operations plans are the best method to ensure the obligations of inspection, maintenance and repairs are implemented.

An operations plan will summarize the components and assets of your strata corporation — which can easily be converted from your depreciation report — and identify what level of service or inspection and maintenance is required as part of your annual operations. As well as what components or systems are managed on a long term basis.

If your strata corporation fails to maintain common property and common assets, and an owner suffers a loss, the owner is likely in a position to seek damages against the strata corporation either through the courts or the civil resolution tribunal.

If you have failures relating to building systems or assets that result in insurance claims, your insurance provider is likely going to advise you of this risk, put you on notice of increased costs for claims or advise you of their inability to renew your insurance.

Common areas of neglect for strata corporations are drainage and sanitary systems, roofing systems and electrical systems. Most items that are out of sight are often not a priority, but these key components often result in avoidable claims and damages, and significant disruption to owners.

Sanitary lines and drains, for example, should be flushed professionally at least every three years — if not more frequently. Likely due to the increased occupancy periods this year with the pandemic restrictions, there has also been an increase in sewer backups. Sewer backup is one of the most severe problems, and accessing buildings during the lockdown is a greater problem as the plumbing contractor will require access to strata lots as well.

Still, the most common attributable factor is simply ageing building systems that are neglected. General inspection and maintenance of operational building components are the best methods to prevent losses, claims, unnecessary damages, and, in many cases, often extend the life of building components.

Roofing systems cover 100 per cent of our investments, yet most property owners undertake inspection or maintenance on an annual basis. A qualified inspector or roofer can identify deficiencies and damages that can be easily and quickly addressed to ensure good performance of the roofing system and extend the life of the roofing system if routine service is conducted.

Routine maintenance of hot water boilers will extend the life of the boilers and ensure they perform at their best efficiency levels, reducing energy consumption and cost. If your roof fails, this is now an emergency repair. Damages have been caused; the cost for after-hours response is significant, and the repair is short term rather than a coordinated approach to maintenance and renewals.

The attitude of waiting until a component fails before we have to fix it is a false economy. Create a schedule of all your building components and determine what services you require and the frequency of servicing.

© 2020 Postmedia Network Inc.

The absolute first priority in opening shared facilities is the safety of residents

Tony Gioventu
The Province

Dear Tony:

Our strata corporation share’s a central community facility with five other properties. There is a club house for meetings of up to 100 people, a kitchen and lounge, fitness centre, change rooms and showers for the pool and hot tubs, a tennis court and a barbecue and terrace to host gatherings.

Since the restrictions were first imposed, we shut down all operations; however, we are now getting a significant amount of pressure to open the pool, fitness centre and club room to host meetings.

Our joint properties met last week to determine the requirements and were left confused over the protocols that are required before we can re-open, and how we manage the facilities. Several council members all sent the same emails to our health authority and received all slightly different answers. So, even at this level it is not 100 per cent clear.

Is there an easy checklist that strata councils can review before they provide access to their facilities?

—Sherrie Milne

Dear Sherrie:

Yes, we all want to be able to open our joint facilities. If we can manage our operations safely, it would help ease the stress of isolation that we have all experienced, and enable our communities to resume the “new normal” of operations.

Post signs with clear instructions on use and social distancing.

It is critical for all strata corporations and councils across British Columbia to understand the priorities and the regulations that apply. Strata corporations are legal entities that have all the rights and responsibilities of a person, such as the ability to buy, sell and mortgage property, they file annual tax returns, invest money for return, sue or may be sued, and hire contractors and service providers.

What this means is a strata corporation must also comply with the regulations of building operations, employment standards, WorkSafe, public orders, local government bylaws and orders, Technical Safety B.C. regulations and orders, local health authorities and pool regulations. If your community is four units or more and you have a swimming pool or hot tub, it is classed under the Pool Regulation as a commercial pool and the operations must adhere to the provincial regulations. Risks to sanitation, water quality and public safety in relation to the pool are prescribed as health hazards. The restart of a dormant pool also poses a health risk for the legionella bacteria and operators or staff must take precautions.

Don’t leave the responsibility up to residents on a self-serve basis. In spite of pool signs and requirements, many users rarely shower before they enter the pool so the likelihood of other compliance is remote. Will someone screen users before they enter the facility? Shared change rooms, showers and washrooms will also require a high level of cleaning, handwashing stations and public education. Post signs with clear instructions on use and social distancing.

The absolute first priority is public safety of your residents, council, property manager, service providers, contractors and emergency responders.

Review your property as a workplace as well as your residential community. Do you have any employees? Many strata corporations employ janitorial staff, a lobby concierge, site managers, landscaping staff, service providers and sub contractors. If they are working on your site, you are responsible.

Have you reviewed the best practice guidelines provided by WorkSafe? Have you developed a safe work plan for your staff? Have you developed a plan to manage confirmed or suspected cases of COVID-19 to manage or report an exposure to COVID-19 or suspected exposure? Have you developed human resource policies to support sick leaves and self isolation? Have you provided your staff with the training and the protective equipment they require while working on your site? Have you established staff policies to ensure their safety?

If you are considering opening your pool, hot tub, or gym, both Interior Health and Island Health have published an excellent guideline for gyms and fitness centres and these provide a framework for managing facilities as well as checklists on screening and identifying users, behaviour in the facilities, appropriate use and frequency on cleaning high-touch surfaces and management of users in the facilities.

We would all like a clear order on what we can or cannot do with our facilities. This decision is often subject to the economic and human resources of each strata corporation provided they can meet the requirements that apply to each region. If your strata corporation cannot ensure the safety of your users, your staff and contractors, then opening your facilities will  place everyone at risk.

What will your next action be if there is an outbreak originating from your strata corporation as a result of mismanagement of your facilities? We are encouraged to stay within our bubble, but if we are gathering in recreational facilities and compromise social distancing or contact, we place everyone in our community at risk.

It is important to remember that many strata corporations in destination communities will also be exposed to transient users who are accessing their vacation homes and using Airbnbs. These persons will be much more difficult to screen and assess and may pose a greater threat to your community, or may be exposed and return to their own community.

We are still limited to gathering in groups of up to 50 people, if social distancing is possible. A good rule of thumb for gatherings allowing for social distancing is 15 per cent of what is normal. If your hall limit is 100 for meetings, 15 per cent or 15 people is likely the maximum allowed to enable social distancing.

© 2020 Postmedia Network Inc.

Addressing the challenges of electronic meetings

Tony Gioventu
The Province

Dear Tony:

What happens when an owner attempts to attend a general meeting that was issued as a proxy-only meeting for our annual general meeting?

Because our strata cannot safely social distance in our common room, the council determined we would conduct a proxy-only meeting and issued a restricted proxy to enable every owner to exercise their voting rights. Two owners showed up at our common room at the time of the scheduled meeting and insisted on attending. After a short discussion they left and chose not to issue a proxy for their units and now claim their voting rights were violated.

Of the 120 units in our building we did receive 94 proxies and every vote passed unanimously, so the outcomes would not have changed.

Do we have to consider reconvening the meeting or were we acting appropriately?

— Jana M. Richmond

Dear Jana:

Under the emergency orders issued at this time, the province permits strata corporations, associations and societies to conduct meetings electronically. Strata corporations may also adopt a bylaw that permits electronic meetings for annual and special general meetings.

If there is a meeting notice issued you have two options.

The first option is to hold a physical meeting that limits attendance and provides owners the convenience of submitting a restricted proxy to a council member or specific person attending to exercise those proxies.

The second option is an electronic meeting. Most strata communities are running these meetings by Zoom, there is no physical location as the meeting is electronic.

In either option if an eligible voter wants to attend, you have an obligation to accommodate their request.

The manageable solution is an electronic meeting where owners have to enter through an approved waiting room and may participate along with the council member(s) and manager/advisor who are facilitating and chairing the meeting.

No matter what option you choose for the restricted proxies to be exercised you must hold an actual meeting, and if that meeting is in person or virtual, plan to accommodate a small number of participants. Proxies are not absentee ballots. You must have a meeting for the proxy holder to be able to exercise those voting instructions. A proxy or restricted proxy is a convenience and for the privilege of each owner to ensure their voting rights are protected, their voting instructions are acted on under the restrictions of the proxy and there is a record of the instructions and the results of all votes. The benefit of issuing a restricted proxy is the reduction in contact and to enable the strata corporation to manage social distancing with safety while still conducting business.

The results of many electronic meetings with proxy options have seen a substantial increase in the number of voters participating and issuing a restricted proxy with a small number of voters participating in the meetings. On the surface this seems manageable and easy; however, once your property manager or strata council start writing a notice package for an electronic meeting, you discover electronic meetings require much more contemplation on how people register, how you identify eligible voters, how voting is conducted, how attendees are permitted to communicate and ask questions, how ballots and proxies are collected, scrutinized and reported.

Think about a conventional notice package and physical location meeting and the time that takes to develop, then triple the time involved with the notice and meeting time. This is adding substantial time and often requires a meeting facilitator to run the electronic meeting and manage registration through a waiting room, a person to review and summarize the voting from the restricted proxies and tabulate any ballots submitted or voting conducted during the meeting, a person to chair the meeting, and person to take minutes.

On behalf of strata owners and Condominium Home Owners Association members across British Columbia, all of our strata councils and managers deserve a great big thank you for stepping up at this time of restrictions and trying to work through the constant changes and challenges.

© 2020 Postmedia Network Inc

Reduce risks, make updates to curb rising insurance cost

Tony Gioventu
The Province

Dear Tony:

Our Langley condo renewed our insurance policy in April and the maximum amount of coverage we can obtain is only 70 per cent of our replacement value with a $500,000 deductible.

I admit we are an older building and have some maintenance issues ahead of us, but the dramatic switch from last year’s policy at $86,000, full replacement and a $25,000 deductible to a policy that cost us $284,000 is horrifying to our owners. Not only has this resulted in a 35 per cent increase in our strata fees but it has left us under insured, with a deductible amount that no one will ever be able to cover and a guarantee that we are essentially self insured.

After the news of the insurance renewal, a sale collapsed last week creating serious concern that people won’t be able to renew mortgages.

Our greatest concern is the loss limit. If we are only covered for 70 per cent of claims, and we have a $500,000 deductible, what is the point of insurance?

Colette W.

Dear Colette:

Our industry has been experiencing an extraordinarily hard insurance market. The brokers who represent us take our policy along with our risks to the insurance industry to essentially negotiate your policy on your behalf, often with multiple insurers each taking a portion of the risk. The insurance industry has seen a substantial increase in world claims and demands, significant increases in British Columbia claims and losses on the investment markets. They are facing an aging housing stock that is prone to increased claims, and a reduced number of insurance companies are willing to assume the risks of the total loss and coverage for strata corporations in B.C.

Remember, when an insurer covers your policy, they are not covering the likelihood of a leak damaging several units, they are covering the complete replacement value of your property, liability insurance, and perils such as water escape, flood, fire and our increasing earthquake risks. Strata corporations in apartment-style buildings have a much higher risk of claims associated with multiple losses because of the proximity of all units, and the limits on containment.

Yes, the increases are dramatic, however, as a broker and insurer, they are looking at your exposure to risk. Your claims history plays a significant part in evaluating your risk, along with your subsequent actions. Your property has experienced multiple claims since 2015 relating to water escape from older piping and your community has not approved the replacement of your piping that was identified in a 2017 report. Unfortunately, at this time of a difficult market, your strata corporation is likely in the highest risk category.

A 70 per cent loss limit does not apply to all claims. The loss limit applies to the total or negotiated loss in the event of damages that result in the event of demolition of your property. A claim that would amount to 5 per cent of your total value would be still fully covered, subject to any deductible amounts and limitations of the policy. Water and fire claims over $1,000,000 are not unusual in apartment-style buildings, so you can safely assume those would still be covered.

With a high deductible rate, it is critical that you educate your owners on their responsibilities and liabilities. Encourage all owners to purchase homeowner insurance to cover the maximum amounts possible. Remind owners they could be liable for a claim if the loss is their responsibility as a result of an action or failure in their strata lot. Provide owners with a written reminder to only run appliances such as laundry and dishwashers when they are home and identify any other activities that may increase your risk such as barbeques on balconies, smoking, home alterations and upgrade installations that include water connections. Most important, your strata corporation must renew your plumbing systems. You run the risk of no coverage available in the future if repeated claims relating to a failed building component are not remedied.

© 2020 Postmedia Network Inc

Remember, electronic meetings aren’t a quick fix solution

Tony Gioventu
The Province

Dear Tony:

What happens when an electronic meeting has to adjourn as a result of technical issues and voting problems?

We held our annual meeting last week via Zoom conference. The meeting was confusing from the beginning. No one had planned how the registration was going to take place, how voting cards were going to be issued and how the voting was to be conducted. At one point everyone was unmuted and arguing and for 56 participants online and by phone it was a gong show.

We had to adjourn the meeting and reschedule for two weeks later to get assistance on process. The question came up at the meeting as to whether we had to reissue notice because we adjourned the meeting? Our property manager advised that we could adjourn the meeting and simply issue a new date and time for owners to participate.

Hopefully you have had some recent experience that would be helpful for owners.

Napur D., Surrey

Dear Napur:

While electronic meetings are now permitted under emergency orders in British Columbia, they are not a quick fix solution. The duties of creating a proper notice package complete with instructions on how the meeting will be conducted, the correct proxy and/or ballot form to go with the notice and the procedures at the meeting is time consuming.

At the minimum, you should have someone to chair the meeting, someone to act as the registrar to identify all the parties who have registered on your platform such as Zoom, those participating by phone, and someone to receive and calculate all of the votes that instructed on the proxy or at the time the votes are taken. Allow for at least twice as much time for the meeting procedures to be conducted, and don’t limit the time of your Zoom meeting as you may be required to open a voting window and calculate votes before the meeting is terminated.

If you have problems with your meeting, you will be required to terminate the meeting and issue new notice. The only time a meeting is adjourned is when the quorum requirements are not met. Whatever method your strata corporation chooses to use, everyone must have the same opportunities to participate. You cannot permit some participants physically at a meeting and insist others have to issue a proxy or attend online. Zoom and Google Meet are easy platforms and permit entry by both online access and phone. Make sure you have provided a local Canadian phone number for the same event.

Issue your notice by paper/email to your owners list at least 20 days in advance of the meeting.

The essence of electronic meetings is that you require a method where participants must be able to communicate — hear and be heard when required. When a strata corporation has over 50 units and participants this can be daunting to say the least. Don’t expect your property manager to simply manage the meeting without significant demand on their time, and additional staff to assist with the process.

A procedural plan will help you manage your meeting effectively:

• The notice package requires detailed instructions identifying how the registration and the meeting will be conducted and if it will be recorded.
• Include a restricted proxy with the proposed resolutions for those owners who wish to ensure their voting is protected.
• Include a voting ballot with the same information as the proxy, that can be used during the meeting when the vote is taken.
• Advance poll your owners for possible council nominees before you send out the notice package or in advance of the meeting so they may be added to the nomination list.
• Issue your notice by paper/email to your owners list at least 20 days in advance of the meeting.
• Hold a shorter information session the week before to help your council, manager and owners prepare for the meeting.
• When the meeting is called to order, one person will be required to screen the waiting room and identify who each of the eligible voters attending will be, this will establish your quorum. If there is any confusion, you may be required to call the roll of all strata lots at the beginning to establish who is on the meeting.
• Require all participants, except the chairperson, to be muted if possible. Identify how they can “raise their hand” to ask a question regarding a resolution or make a motion to amend a resolution. Because of the complications associated with amendments, avoid amendments to three-quarter vote, 80 per cent vote and unanimous vote resolutions unless absolutely necessary.
• Set a time when voting will be open. To save time you could discuss all the resolutions and nominations first and then open a voting window where each owner participating can submit their vote by email to be calculated along with any restricted proxies that were issued. For example, the meeting can be called to order at 4 p.m. with a set voting time for the resolutions announced once the discussion is over. Eligible voters vote between (4:30 p.m. and 5 p.m.) by emailing their completed voting card, identifying their name, unit number/strata lot number to the designated email provided. The votes are calculated along with the proxies and voting results are announced and the meeting is terminated. Anonymous voting cannot be audited so secret ballots are unlikely; however, the strata corporation retains the ballots and proxies as evidence of the procedures and only reports the total voting results in the minutes unless a poll is required.

© 2020 Postmedia Network Inc.

A strata council doesn’t have the authority to undo a decision

Tony Gioventu
The Province

Dear Tony:

Our strata council has decided to defer strata fees for several months during the COVID-19 restrictions. Of the seven council members, five are people who are off work for the short term, but the remainder of owners who are retired or work from home have no objection to the continuing of strata fees. Is this possible? If council members have a direct interest in an outcome is that not a time in council meetings when they should remove themselves during the decision making? We are very concerned we will end up in a serious deficit and drain what little reserve funds we have left for an emergency. The council simply advised they will not contribute our allocated contingency amount in the annual budget to make up the difference.

Maria C., Kelowna

Dear Maria:

During these difficult times, everyone is scrambling to make their best efforts in an attempt to accommodate hardships and reduce the day-to-day stresses of financial management. A strata council does not have the authority to undo a decision of the owners at a general meeting. Once the owners have approved the annual budget, the duty of the strata council is to enforce the bylaws and collect strata fees on the first of each month, as approved in the schedule of fees in the annual budget.

While there are no strata police, any owner may simply make an application to the Civil Resolution Tribunal ordering the strata corporation to collect the fees. If a strata corporation wishes to use contingency reserve funds for any purpose other than an emergency, or a recommended depreciation expense approved by majority vote, the strata council must hold a properly convened special general meeting to obtain a three-quarter vote to approve the expense.

An allocated and approved amount to the contingency reserve fund is a payable and budgeted item in the annual budget like every other expense, and it must be accounted for monthly. These designated contingency funds will require the approval of the owners at a special general meeting; however, that type of expense to defer the payment of strata fees may still be subject to a challenge in the tribunal and your strata council should seek legal advice before they consider this option. Many strata corporation insurance policies include some level of legal services for these types of emergencies.

There are three possible methods of convening a special general meeting to approve the possible expense.

The first, permitted by a recent emergency order, is for the strata corporation to convene a special general meeting electronically. A typical 20-day notice must still be issued to the owners, including the agenda and the specific wording of the resolution for the contingency expense, and the strata corporation must establish a method for the voting registration, procedures, and ensure eligible voters are capable to communicate with each other.

The second option would be a conventional special general meeting where a physical meeting is conducted. Because of the assembly restrictions, owners would be required to submit a proxy which could be restricted solely to their instructions and only for the purpose of that resolution.

The third option would be a waiver of notice where each owner is provided the resolution and as condition of waiving notice of a meeting, every eligible voter must vote in favour of the resolution for it to be approved. In smaller strata corporations this is frequently an option where all owners agree.

As council members it is your duty to comply with and enforce the bylaws and the resolutions of the strata corporation. That includes upholding the approved annual budget or any special levies. It is not impossible to make changes or find alternatives when the proper procedures and approvals are applied.

Don’t cut corners and consider the consequences of your decisions.

© 2020 Postmedia Network Inc

Crucial checklist for your annual or special meeting

Tony Gioventu
The Province

To lawfully facilitate and conduct a general meeting by an electronic method — which requires every eligible voter to be able to communicate with each other — your strata council and manager will still be required to meet the technical requirements of notice, registration, proxy certification and a voting method that meets the requirements of the Strata Property Act and the bylaws of your strata corporation. In advance of your notice and annual or special general meeting, it is recommended you understand the methods that you will be applying.

An electronic information session that enables owners to ask questions will provide you with advance notice of technical requirements that may arise during your meeting. An option for owners to submit a restricted proxy on the resolutions, may ensure that owners’ voting rights are facilitated to accommodate those owners who are unable to attend the meeting by electronic method.

Always review your bylaws in conjunction with convening meetings. For example, it may not be possible to permit secret ballots under all platforms for electronic voting. This limitation could be included in the notice materials.

Electronic meeting check list before you conduct an annual or special general meeting

To understand the challenges and management issues that may arise from electronic voting test run your planned meetings to determine if the platform or method selected complies with the Strata Property Act, regulations, the bylaws of the strata corporation and logistically enables you to run the meeting.

Notice:

• All content including resolutions, agenda and reports are still required
• The notice period is still consistent: 14 days plus four days notice plus two days delivery and receipt
• Are you including a restricted proxy for owners who may not have electronic access?

Registration:

• How will each registrant be identified?
• Have you hosted a waiting room to qualify each eligible voter?
• Is each eligible voter provided with a reference code to identify their voting and participation?

Proxies:

• How will you certify the proxy and verify the proxy holder?
• Will you require advanced email copies of proxies?
• If owners have submitted restricted proxies will you retain copies?

Voting:

• Have you established how voting cards will replace electronic attendees?
• How will voting be conducted?
• Is there a method of recording the voting that will support each resolution?
• Have you reviewed your bylaws to determine what methods of voting are permitted?

Polling or calling the role:

• By show of hands (possible with some meeting platforms)
• By electronic transmission method
• By an email vote at the time the vote is taken permitting a window of time for the eligible voters to submit their votes to a designated email address
• By restricted proxy to enable the assigned proxy holder to exercise the votes

Quorum:

• Have you identified how the quorum is reported and maintained in the event the electronic system being used fails?
• Do you have a method to approve/re-enter electronic participants that may lose their connection?
• Have you read your bylaws to determine if there are other conditions that apply to maintain or establishing a Quorum?

Chairperson:

• Remember: review your bylaws to determine who is or may be elected the chairperson of the meeting. This may include council members, the strata manager, or alternate party
• A manager or employee is not permitted to represent proxies and therefore cannot act for restricted proxies if issued
• Recording of the meeting proceedings
• Many platforms permit the recording of electronic meetings which may be valuable as evidence of procedures and decisions and provide a back up resource for the minutes
• If you are recording the electronic meeting, insert an agenda item at the beginning of the meeting for the owners to consent to recording by majority vote before any other business is conducted

Confidentiality:

Not all platforms are secure or confidential. If your meeting requires a confidentiality agreement or contains privileged information, seek legal assistance on the proceedings before you start the meeting.

© 2020 Postmedia Network Inc

Only practical method of voting may be calling the roll one at a time to identify how they vote

Tony Gioventu
The Province

Dear Tony:

Our strata corporation is 118 units in the Fraser Valley. In 2010 we adopted a new bylaw package that was drafted and reviewed by our lawyer that included a bylaw that permitted “annual or special general meetings to be conducted by electronic methods”.

The bylaw contained no other language and we assumed this would be easy to administer. We attempted to hold a special general meeting last week to approve a long overdue roofing project for later this summer. There will be a very small levy as we have planned for most of the funds from our contingency reserves. The notice was issued and advised everyone of the electronic meeting that included a conference call number and or Zoom connection.

It became clear at the beginning that the meeting was in trouble as no one had figured out how we would do registration to identify owners, proxy holders and issue voting cards or in lieu of that be able to identify each eligible voter as there were over 65 people on the call/meeting.

While the concept of an electronic meeting seems ideal, it resulted in a termination of the meeting half an hour after it was called to order because there were so many delays, people continuously getting cut off the system and having to reconnect, and a continual number of people on the conference call who kept interrupting the process.

Are we making this too complicated? Is there an easier method to managing an electronic meeting?

Gerri W.

Dear Gerri:

Electronic meetings work very well for small groups of council members or owners where it is easy to identify each owner or council member as they participate.

To properly facilitate and conduct a general meeting by an electronic method — which requires every eligible voter to be able to communicate with each other — bylaws must permit electronic general meetings and address: the process of registration, certification of proxies, recognizing how voting cards will replace electronic attendees, how the quorum is reported and maintained in the event the electronic system being used fails, how a chairperson may be elected if necessary, how votes for resolutions would be counted, how you would address the matter of secret ballots or a precise count if your bylaws permit, who decides how each vote is taken and how the minutes and records of the meeting are reported.

For electronic meetings, once the roll of eligible voters as been “registered” and established, the only practical method of voting may be the calling of the roll one at a time to identify how they vote. This will at least ensure you have a record by unit or strata lot number that can support the calculations and decisions made at the meeting.

An online voting process is possible; however, in testing several online voting technologies that occur at a simultaneous meeting, you require a separate identity number for each eligible voter to prevent voting irregularities.

If more than the registered eligible voters sign in — which has occurred on several Zoom meetings — what happens when there are more votes cast than the number registered? Now you will be required to call the roll and verify each strata lot vote, resulting in a voting irregularity.

Here is a test I apply on procedural questions for both in-person and electronic meetings.

1. Have all eligible voter’s voting rights been protected?
2. Are all eligible voters and proxies properly identified?
3. Is there a risk of voting irregularities as a result of a general log in?
4. Do the bylaws of the corporation permit the electronic procedures?
5. Do the procedures comply with the Strata Property Act and Regulations?

In the past week, we have audited several general meetings converted to Zoom meetings. There was a single method of joining where several parties attended who were not owners, not eligible voters, and disrupted the meetings, and where the strata corporation’s bylaws did not permit electronic general meetings.

There is no single solution that remedies all the conditions, and while it is not safe for people to be congregating in confined spaces, we must look at viable alternatives.

Without amending bylaws, a strata corporation still has the opportunity to convene a restricted proxy meeting, or if there is no urgency, defer the meeting until it is permitted and safe to once again gather.

Before you convene an electronic meeting, closely review your bylaws to determine if the method is permitted, talk through the procedures with council and your manager so you understand how they will be executed.

For more information on restricted proxies and managing your strata through the COVID-19 crisis the Condominium Home Owners Association has prepared a number of guides and templates to assistance with operations. Go to www.choa.bc.ca, email [email protected] or call 1-877-353-2462 and an advisor will be happy to assist.

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It’s important to create an annual schedule for building maintenance, inspection, service and repair requirements

Tony Gioventu
The Province

Dear Tony:

Our strata had our Annual Meeting by restricted proxy and a simultaneous Zoom meeting which worked very well. We had the largest participation ever. Out of our 110 townhouses and 50 apartments, 135 people sent in their proxies and 25 attended the Zoom meeting to ask questions.

All of our resolutions passed and we elected a council; however, one concern that was raised was that the proposed budget was reduced by 25 per cent when it was issued. We cut corners on landscaping, building exterior maintenance and reduced our contingency contribution to $0.

Our insurance renews in August and owners are seriously concerned we do not have enough funds to pay any increases and our exterior maintenance is due for perimeter drain cleaning, gutter cleaning and repairs and a long overdue roof inspection.

We know it’s a tough time for everyone, but does this make sense? We may be creating much more costly problems or risks if we defer a number of issues.

Owners at the meeting wanted to know if we can amend our budget in August if we need more funds?

— Margo R. D. president of council

Dear Margo:

Great news that your strata managed to convene your meeting. Many strata corporations are looking at options for meetings under the current restrictions and the combination of a restricted proxy that ensures everyone has the opportunity to direct a restricted vote, and the Zoom meeting to enable questions and dialogue is likely the most viable solution under the current conditions.

While deferring maintenance repairs or renewals to be more budget wise sounds like a good idea, most strata corporations are operating with bare bones budgets already and can ill afford to reduce their maintenance, renewals and contingencies for increased insurance costs.

Perhaps a test for strata corporations to consider in evaluating whether a reduction in service is viable would be helpful.

Create an annual schedule of all of your maintenance, inspection, service and repair requirements. Set a priority based on conditions such as: life safety components and utilities, component operation that is regulated or licensed, such as elevators, boilers, generators, components that may result in water damage if they fail, component service such as janitorial that may result in health risks to residents, and components that may result in damages to building elements and services if eliminated, that increase your exposure to losses or lawsuits. These are your essential services.

For most buildings it is almost impossible to reduce their current budgets because of the high cost of housing, strata owners have approved minimal budgets whenever possible. Try to maintain business as normal as much as possible. There are many contractors who are still dedicated to servicing their clients and available for routine services and emergency response.

If you require additional funds during the year because the corporation did not budget sufficiently, you will be required to convene a special general meeting and approve either a special levy or an expense from your contingency fund if those funds are available. There is no provision in the Strata Property Act to amend the budget during the fiscal year. In addition to making operations volatile, it would be a principle contradiction to disclosure of information to buyers, financial institutions, and predictable contributions for owners.

The insurance market is still in the midst of very difficult times, and with world-wide markets falling, this has also affected revenues for the insurance industry. If your strata insurance is renewing in the next six months, this is a good time to start a direct discussion with your insurance broker. Claims history, maintenance status, location, age of your building, risk management activities and capacity of your property, are all factors that will influence your insurance renewals, costs and deductibles rates.

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