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The Standardized Proxy Form – A Welcome Change
There are changes on the horizon with respect to the distribution, use and collection of proxies
With the amendments to the Condominium Act, 1998 and the introduction of the Condominium Management Services Act (the "Managers Act"), there are many changes on the horizon with respect to the distribution, use and collection of proxies. Anyone who has ever been involved in a proxy battle with respect to the removal and/or election of directors understands the difficulties that can arise before, during and even after the meeting. Allegations of improprieties typically run wild during these meetings, and the first point of contention is the proxy form. So, how do the proposed new changes impact condo corporations and property managers?
For starters, there will be a standardized proxy form that must be used for owners meetings. What this proxy form looks like has yet to be determined as we are waiting on the regulations, but for many this comes as a welcome change. Gone are the days of owners or proxy holders attending meetings with homemade proxies that are handwritten, illegible, or lacking necessary information. In turn, the chairperson's job presumably becomes slightly less onerous as he/she will not be in the unenviable position of determining the validity of fifty homemade proxies. Instead of confusion, the standardized proxy form will add clarity. If the standardized proxy form is not used, then the proxy form will be invalidated.
No More Managers???
There is an interesting addition in the Managers Act with respect to the solicitation of proxies. Specifically, managers are prohibited from soliciting proxies for owners meetings in the event the subject matter relates to:
i. the manager; ii. the removal or election of directors; or, iii. any other reason that is set out in the regulations (which have yet to be drafted).
This provision is quite broad as, for many condominiums, owners elect directors each and every year. On a strict reading, it appears that managers cannot actively solicit proxies for these meetings. This could be somewhat problematic considering voter apathy is high in many condo corporations. Oftentimes, managers must knock on doors, or stop owners in the lobby to ensure that they have enough owners in attendance at the meeting to simply reach quorum. The introduction of this provision puts a stop to this practice. While the intent of this provision comes from a good place and is to prevent managers from actively soliciting on behalf of a particular director, the unintended impact may be that some condo corporations are unable to reach quorum.
Voting for a new director may be as easy as pressing a button – literally! Using your Apple or Android phone to enter your vote for a new director could soon be possible in your condo. The new changes provide that owners may vote by show of hands (in person or by proxy) or by way of recorded vote. What is interesting is that the recorded vote may be done by "telephonic or electronic means", which is defined to include communications by telephone, fax, email and automated touch-tone phone.
The one catch to this change is that the by-laws of the condo corporation must permit that the vote can be done by telephonic or electronic means.
The implementation of the standardized proxy form may create some waves, but it appears that the new amendments to the Condo Act are doing their best to keep up with the times. We believe that these proposed changes will be welcome by all, especially those board members and owners who travel throughout the year.