Turn-over meetings

A group of people sitting at a long boardroom table and engaging in discussion. The developer creates and controls the first board of directors. As soon as a majority of the units are sold by the developer, owners must elect a new board. This is done at a “turn-over meeting”.

Timing of the turn-over meeting

Within 21 days of the declarant no longer owning a majority of the units in the condominium corporation, the first board must call the turn-over meeting. The turn-over meeting must then be held within 21 days after it has been called.

Preparing for the turn-over meeting

Before the meeting, you can review the disclosure statement you received when you bought your unit. It will help you understand the business to be discussed at the meeting.

The disclosure statement includes:

  • a general description of the property
  • the number of units the builder intends to sell
  • estimated start and end dates for construction of not-yet-finished common elements
  • the corporation’s current budget
  • the declaration. This contains a definition of units and common elements (including the percentage you own) and each owner’s monthly fees

Agenda for a turn-over meeting

The agenda for a turn-over meeting must cover certain items:

  • election of the first board of directors
  • turn-over of corporation documents

Voting Method

Effective November 1, 2017, the following changes to voting method apply:

Votes may be cast by: 

(a) a show of hands, personally or by proxy

(b) a recorded vote that is:

(i) marked on a ballot cast personally or by a proxy

(ii) marked on an instrument appointing a proxy

(iii) indicated by telephonic or electronic means, if the by-laws so permit 

Also, condo owners now have the right to keep the content of their votes secret.  Under certain conditions, a condo corporation can pass a by-law to amend or repeal this right. For further details, please see section 14.1 of O. Reg. 48/01 under the Condominium Act, 1998.

Documents to be turned over

The developer maintains the corporation’s documents until the turn-over meeting. At the turn-over meeting, the developer gives the new board all the corporation’s documents. The Condominium Act specifies what documents the developer must turn over.  These include:

  • the corporation’s minute book
  • the corporation’s by-laws
  • agreements already entered into on the corporation’s behalf
  • insurance policies
  • bills of sale for the corporation’s assets (e.g. exercise or snow removal equipment)
  • the register of the owners

The declarant must turn over other important information within 30 days of this turn-over meeting, such as:

  • warranties
  • as-built plans, drawings, and specifications of the property
  • financial records
  • reserve fund studies
  • proof that the units and common elements have been enrolled in the New Home Warranties Plan
  • effective Nov 1, 2017, is that the qualifier is "if the property is subject to the Ontario New Home Warranties Plan Act"
  •  a table that outlines responsibilities for repair and maintenance between unit owners and the corporation

Within 60 days, the developer must turn over audited financial statements.

What’s different after the turn-over meeting?

The first “owner” board assumes responsibility and can make changes to condominium operations.

The new board:

  • must hire an engineer to perform a performance audit.
  • must ensure that any necessary performance audits are completed. This must be done between 6 and 10 months of registration of declaration and description
  • must hire an engineer or authorized person to perform a reserve fund study.
  • can seek different contracts for service providers (e.g. cleaning, security, management, maintenance of mechanical components)
  • can cancel a management agreement made by the condo corporation before the owner board was elected and may be permitted to cancel certain other contracts for services, such as security. Some cancellations must be done within 12 months and others, such as mutual-use agreements, could require a court application.

Ensuring the developer provides all required information

Sometimes the developer doesn’t turn over all required documents.  If that happens, the condominium can take the developer to court.  The court can order the developer to provide the documents.  In addition, the developer could be subject to a fine and may have to pay the condominium’s court costs.

Quorum

Quorum is the minimum number of owners that are required by law to be present for the meeting, either in person or by proxy.  If there is no quorum, there can still be a discussion on a matter, but no vote can take place at the meeting. 

Effective November 1, 2017, the standard quorum for a turn-over meeting is 25% of the owners.  If the quorum is not reached on the first two attempts to hold the meeting, the quorum is reduced to 15% on the third and on any subsequent attempts.