Condo Adviser Episode 30: Deep Dive on Condo Board of Directors

Rod: Oh yeah, I did it again. I'm not supposed to touch the screen while the jingle is happening.

Graeme: I'm not sure DJ is going to be your career choice going forward.

Rod: I don't think so. I have to pick between the jingle and seeing my notes and I went for the notes. Hello, everybody. My name is Rod Escayola and I'm your condominium lawyer with Gowling WLG. Happy Groundhog Day, everybody, and thanks for tuning in to our monthly Condo Adviser webinar. I've got to say it's been such a crazy day today that I actually missed the weather prediction by Wharton Willy, the Ontario groundhog, but I've looked it up on social media and I've been told that when he emerged he actually saw his shadow and, apparently by all accounts, this announces an early end to the Ottawa trucker occupation. So that's good news I guess. Now since we last lots of stuff has happened and we've truly entered into twilight zone, if you want my opinion. We thought we were busy enough with the pandemic. We now have an occupation. It's fantastic. This is just keeping condo land busy. At the Provincial level you'll see that we are being sent straight back to the future with the Province returning to Step 3 this past Monday and Graeme, our usual COVID updater will cover that with a slide that has a lot of words in it, but he's going to explain it and simplify it for all of us. But the main topic tonight is of course our deep dive on condo directors. So as you've been accustomed, I went out and I called on your favourite condo geeks to come and give us some help with this exploration. Somehow we've managed to bamboozle Murray Johnson to return to the hot chair tonight. I don't know how we did that. As you know Murray is the VP Client Operations with Crossbridge Condominium Services Ltd. and he's the President of CCI Toronto, an area chapter. It's funny. The area chapter. That's an interesting concept. I thought that, really, Toronto was sort of the center of the Universe and whatever was not in Toronto was not on the map, but we'll see. So Murray also has ventured onto social media this year. So how's that going, Murray?

Murray: I'm such a novice. I'm still learning.

Rod: Nice. As long as you're having fun. We also have another returning guest tonight. Debbie MacEwen from the Condo Management Group in Ottawa. Debbie is the Age Education and Mentorship Coordinator and she's basically leading CMG's academy. She is shaping the future of condo management with, I think, how may students do you got? Do you have 15 students, Debbie? Is Debbie still there?

Graeme: Yeah, Debbie's here. She's just muted. There you go.

Debbie: Yes. Currently there are 15 limited licencees in the program, and 3 more coming onboard in the next month and a half, and we are constantly hiring and looking for the premier candidates.

Rod: Nice. Nice. We'll talk about how you train the next generation because that I think is quite important. Now of course we have your favourite condo twins. We have, from Gowling WLG of course, we have David Plotkin. David is in the very heart of the Ottawa downtown core, and as we speak he's going to spend most of the webinar on mute, just so we don't hear our friendly trucking occupants and the hovering helicopters.

David: The helicopter seems to have moved away, at least for the webinar, so I appreciate that.

Rod: Nice. Thank you for that. And, of course the other condo twin, Graeme MacPherson. Graeme is in the outskirts of Ottawa and so you've probably dodged the celebrations I guess, Graeme?

Graeme: Yeah, blissfully ignorant of it all here in suburbia.

Rod: Nice. As for me, following Condo Adviser safety protocol, I've been whisked to safety to an undisclosed location from which I am broadcasting tonight. I never want to hear anybody make that joke about Ottawa being boring and the sidewalks being rolled in at 7:30. We haven't rolled in the sidewalks in a week now. It's like having our own Stanley Cup riot but without having a good hockey team. Okay, so as usual we have the chat is open so feel free to chat it up. We have the Q&A channel that's open. If you want to question, I realize that we usually don't have time to get to your very specific question, but just because we have a busy agenda. But sometimes we're able to squeeze some in. Usual housekeeping, we'll start with our usual disclaimer. For those watching the webinar today we are broadcasting from Ontario. We're talking about Ontario legislation so if you're watching from elsewhere you may need to adapt that. The information we're providing you today is as accurate as can possibly be as of February 2, 2022, and you may watch this on demand later on because in a couple of days I will upload this webinar to our website. Please don't ask me when it's going to be done. Every week somebody ends up asking me. It just takes a couple of days for our IT people to clean it all up. Again, as usual, the information we provide tonight is general in nature and so it may not necessarily apply. It's important for you to seek advice from the professionals advising you. Okay, and for whatever reason, I have to say that this webinar is being recorded. There it is. I think I covered everything. Of course this is the list of speakers. Graeme, bring us back to the future.

Graeme: Okay. So I'll try and move through this relatively quickly too because I know that we've got a big list of topics to cover here tonight. On January 31 we did move back to a modified Step 3. A lot of this isn't new. We've been in Step 3 before. I'm not going to go through item by item every single thing that's changed or every single thing that hasn't changed. What I'm mostly going to do is focus on the kind of important ones pertinent to condos, and you can see them here on the slides that will be put online, and also when I'm done my little spiel I'll show you were you can find on the Condo Adviser website all the relevant information you could need. But jumping right into it, right now we're in modified Step 3. We expect that to last until at least February 21 and around that time it'll get reassessed and either pushed forward or we'll move into some other Step. We'll have to see. But until that time, and until we know more, the gathering limits have changed. We are now at social gathering limits of 10 people indoors and 25 people outdoors. Whereas organized public events allowing 25 people indoors. Whereas outdoors there still doesn't seem to be a limit but you've got to make sure that you can maintain a 2 meter of social distance. As always, in the circumstances, even if you do have significantly less than 25 owners and you were somehow able to fit everybody into one hall, we would still tend to recommend, in the circumstances, doing your meetings via virtual means. No big surprise that masks are still required in the indoor common elements. No big changes there. The big one that I think everyone's going to be interested in is that condos, regardless of the drama of last month of whether or not the regulation applied or didn't apply, there's no doubt now that condos can, can, open their indoor and outdoor recreational or fitness amenities. Now again, as we've said, just because you can doesn't necessarily mean you should and even if you do decide to open your recreational or fitness amenities, there are certain caveats to that. There are capacity limits in place. You have to put up signs in conspicuous locations showing the capacity limits. Participants have to be screened for COVID. You need to keep tracing information. I won't get into all the nitty gritty because that's a whole thing in itself but it's not total pandemonium. We can't just kick in the doors and let everyone run wild. Another relevant item to condo corporations is that short term accommodations can now continue and not under all those restrictions of when we were in Step 2. So that would, in our view, include guest suites although guests can't be using the indoor fitness amenities. I'm going to share my screen, quickly, because I know that was a lot of information.

Rod: Let me. I'll do it. I'll do this part.

Graeme: Okay. Let the record show it was my idea.

Rod: Okay, and so, you were going to say?

Graeme: I was going to say go to your handy dandy Condo Adviser website and click COVID right at the top there.

Rod: Okay. If I click this

Graeme: That will bring you to these boxes where you can click on whatever step we are currently in. Right now we're in Step 3.

Rod: Right, or whichever Step you want to be in.

Graeme: Or yeah, if you're interested in Step 2, you can find out what's happening there. But that'll bring you to Rod's lovely photo as well as a big list of kind of everything that you need to know. All of the relevant regulations and restrictions in place. So it's a really good resource to determine what the current allowances are, versus what they were back in other Steps, and what they might be if we return to other Steps.

Rod: Okay. Fantastic. I saw some questions go by. So I'm just going to very quickly cover that but we need to take our deep dive on condo directorship. One of the questions had to do with active screening. So you need to post signs at all entrances, with respect to screening, and these signs or notices will do two things. You're inviting, passively inviting, anybody that comes in to self-screen but the corporation has an obligation to actively screen their employees, or in fact, people that work at the corporation and I've seen someone ask, what does that active screening mean? I've seen the other condo law firm in Ottawa post an interesting sort of suggestion, or a theory, as to whether or not active screening meant that the corporation had to be the one screening, as opposed to the employee being able to self-screen. In my view, active screening doesn't focus on who does the screening. It just means that there has to be screening for those working at the corporation. So in my view, and this is my interpretation and I respect the others, that screening can be done by the employee. What the corporation has to do is gather that information and ensure that it gets done. Another question that I saw go by was whether or not guests were permitted to use the amenities and what does the regulation say about that? I think, as Graeme just indicated, the only guests who cannot use the gym, or the recreational amenities indoors, are those making use of short term accommodations. Having said that, the recommendation that pretty much everyone out in their industry is making right now, is that you should, if you're going to re-open your amenities, you should restrict its use to the actual occupants and not to guests. Condo corporations are not a gym. They're not a community center. They happen to have these services for the occupants and, if we've learnt anything about transmission and pandemic and the yo-yo game between Step 1, Step 2, Step 3 and the various colours and flavours that we had in the past, is we need to reduce traffic. Unnecessary traffic. Anyways you should really talk to your favourite condo lawyer, and your favourite condo manager, to get any directions with respect to that. We're way behind schedule. David, you were right. We're not going to have enough time.

Okay, so very quickly, going back to this. First topic today we're taking our deep dive into condo directors and I have to say this, condo directors have a very bad rap, almost as bad as condo managers. Owners love to hate directors and it's funny because, as an owner, you know everything. You can fix everything. You understand everything. You're super smart. The minute you get elected, and you step on the board, somehow your brain is somehow vacates your skull and then you just become incompetent, or worse, maybe dishonest. Like I don't know why there's such bad reputations around condo ownership. I'm going to say this, it's something a bit contradictory or conflicting behind a concept of condo directors governance. People move to condos because they want a carefree living. They don't want to have to take care of maintenance and upkeep and cutting grass and cutting snow so they sell their home in the suburbs, they move to the condos for this carefree living, and then somehow they get sucked into the condo directors vortex where, suddenly, we are expecting them to operate multi-million dollar complexes, deal with equipment and machinery that's advanced enough to send someone to the moon. They need to interpret legislation. You need to figure out budgets. You need to have blogs and newsletters and you need to handle complaints. At the end of the day you're maintaining private roads, private parks. You're dealing with garbage collection. You're dealing with electricity and water distribution. You're operating a gym. You're operating a pool. All of this, for free, by the same people who left suburbia because they did not want to have to take care of all of that. So there it is. That's kind of the funny part about having to choose directors from a group of people that really didn't want to deal with that. So very briefly, I'm going to take an overview of what is the job of a condo director, but then after that we want to really sort of dive into it. Tonight you're going to hear far more from our managers than from the lawyers, or so he says.

At the end of the day a condo director, his or her job, is to manage the affairs of the corporation and, managing the affairs of the corporation, then you have to look at the list of everything the corporation has to do. The corporation doesn't have arms and legs and so the corporation needs the directors to do this. So controlling, managing, administering the common elements. Taking the required steps to ensure the safety and security of those on the premise. Taking reasonable steps to ensure compliance with the regulations; the bylaw, the declaration and so on and so forth. Holding owner's meetings. Presenting financial statements to the owners. Securing a reserved fund study. All of that stuff that the condo corporation has to do, while the directors are ultimately responsible for that, and they're also responsible for a ton of other obligations that fall outside of the Condo Act, under the Fire and Safety Act, under the Occupiers Liability Act, you're responsible to ensure that elevator is being maintained properly and that the proper inspections and reports are being done. So you, as a director, have all of these obligations. That's just a quick overview. Now, let's dive in.

Let's talk about the number of directors. Let me see if I have a slide here and I'm going to turn to you, David, and then to Debbie.

David: Yeah, very quick on this. Section 27 of the Condo Act provides that you must have at least a minimum of 3 directors, unless provided otherwise in the declaration. There's one exception to this in prior to turnover, when there's a possibility of a 3 plus 2 board, so that there's coverage both for the declarance and for the future corporation but that's a very specific example. To increase the number of the directors on the board, you could theoretically do this by amending the declaration, but that's not really necessary in practice because you can pass a bylaw, as we all know how to pass bylaws under section 56 of the Act, to govern the number of qualification, disqualification, nomination, election, resignation, removal, terms of office and remuneration of directors. So that's the most practical approach to doing so. On that point as well, if you're going to pass a bylaw on the number of directors, you may also want to consider the qualifications of them. I might be getting ahead of myself here but I'll do it all at one point in one swing. The only qualifications required for directors, at law, is that they must be an individual; they must be at least 18 years of age; cannot be an undischarged bankrupt; cannot be incapable in a legal sense, not in a colloquial sense, of managing property, and must have complied with their disclosure obligations; must have completed their requisite directors training and cannot have a condo lien registered on their property for more than 90 days for a year.

Rod: I think we've got that a bit later on there. I think you're getting ahead of yourself.

David: Yeah, well.

Rod: But that's good. That's good. So that's the minimum number is 3. You can increase it with a bylaw, as you just indicated, and so that brings me to the next question: what is the right number? What is the right number to have on a board of director? I'm going to turn to you, Debbie, first. What's the right number?

Debbie: Yes. So one of the things that I've observed, and certainly this is more of an Ottawa phenomenon than a Toronto phenomenon, because the size of condominium corporations in Ottawa tend to be smaller. What I have found is that a lot of condominium boards are too big or there are too many people, by governing document, too many people on the board for the size of the condominium corporation. I've seen 10 unit condos with 5 member boards, by governing document, and the boards don't know, or have never been told, that they can amend that. The challenge is with getting people to come on the board when you have a smaller condo are extreme. You don't want to get in the situation where you're twisting arms, bribing people, coercing them to get on the board just to have bodies. You want people on the board that want to be there. So it's very important to consider the size of your property, the number of people that your governing documents stipulate you should have on the board and then make changes if need be. I think any complex, or any condo entity, under 50 units should not have more than 3 directors. It's not about when the property was built, or what the ownership is at the time that the property was declared, it's when that property becomes 80%25 rental units and then your dynamic changes completely and the number of people you have that are even interested becomes smaller and smaller.

Rod: Okay. That's a good point, and actually speaking of a declaration that has just an out of whack number, right now we're helping a very small condo corporation with 16 units where the declaration requires them to have 5 people on the board. Well, you might as well have everybody on the board at that point in time. It just doesn't make any sense. That leads me to you, Murray. What would be the challenges with having too small of a board or too big of a board? Just to help us sort of determine what number is the sweet spot.

Murray: Yeah, I think it really depends upon the physical layout of the condominium. In Toronto, probably 5 is a good number, because our condos are getting larger and larger. It's not unusual now to see between 900 and 1,200 suites in a building. Sometimes it's more than one building. So when you're looking at the physical layout, if you've got two buildings as part of one condominium corporation, you want representation from both. Maybe that's 5 then. It really depends, I think, the size of the property and how much the board wants to get done. You might have a director of communications. You might have a director of contracts or whatever. So it really depends and I think the boards will know when they have the right number.

Rod: Mmhmm. So one of the difficulties I guess when you have too many cooks in the kitchen is getting a consensus, finding the availability, when can they meet. There's always somebody that's not available and so on and so forth. I guess that's maybe a problem with too many people around the kitchen.

Murray: Yup, absolutely.

Rod: Of course, if it's too small, then you're just going to burn them out. I see on the chatroom, I see a lot of criticism. Fair or not fair, I'm not sure, but directors and the suggestions that they're all in it for their personal glory and for their advancement and the kickbacks, I got to tell you and maybe I'm coming from a different place because I'm also a condo director, there's 45,000 condo directors, roughly, in Ontario and these boards are full mand I mean that full of dedicated, honest, caring competent directors. I have not received a box of chocolate as kickbacks and I can tell you that the personal glory that comes from being on a board of directors, I don't think people actually tip their hat to me in the elevator. Actually, sometimes I have to take the stairs to avoid the elevator, because people are so unhappy with this, that and the other. It's such an unpopular position and I don't accept, for a second, the suggestions that people are hogging the power, or they're doing this for kickbacks, or they're hiring their friends. I don't accept that. It would be an infinitely small minority, I think, in my view. Again, everybody has their own experience but I just wanted to say that because it just, like, in any event let's switch topics before we run out of time. Let's talk about board meetings and how they're being conducted, and what's proper quorum, and we'll talk about virtual meetings. So let's talk about that. I think, Graeme, you're the one dealing with this.

Graeme: Yeah. So very quickly, as Rod said at the beginning, in order for the corporation to do anything, to take any steps to get its reserve fund, to maintain what it needs to maintain, the board of directors needs to make decisions. In order for the board of directors to make decisions, or transact business, it has to be at a properly constituted meeting. The purpose of this isn't so that there can't be a situation where one board member maybe decides something, and then another board member decides something different, and they both give instructions to property managers, separately, and what are we supposed to do then? The point of this is that these decisions have to be made at a meeting where there is quorum of the board. So that means there needs to be a majority of board members present. So if you've got a board of 5, you need 3 members there. If you've got a board of 3, you need 2 members there, etcetera. Now, one aspect of these meetings that's become more and more relevant kind of since 2020 is the prospect of virtual meetings. Can you hold them virtually? Ordinarily, under the Condominium Act, directors meetings could be held by teleconference or other kind of electronic means, only if each and very director consented to it. So that would mean if there was one director who absolutely refused to meet electronically, then that's it. You can't do it. However, due to COVID-19, the Government of Ontario has temporarily amended the Act to allow the board to hold meetings electronically, even if not every single board member consents, and even if the bylaws say something different. That is going to be the case until September 30, 2022, unless it gets extended again, which it already has been extended several times.

Rod: Right and there's a consultation right now taking place in Ontario to make that a permanent change. There's no doubt in my mind that these changes will be permanent, allowing condo boards to meet virtually by phone or by Zoom or whatever it is, without having to either have a bylaw and without having to get the consent, the unanimous consent of everybody. The important element for these kinds of meetings to take place is there needs to be real time concurrent sort of discussion. So people need to be able to communicate live with one another. I'm actually going to jump to you, Murray, and I'll come back to you, Debbie, in a second about emails but I'm going to jump to you, Murray, because we're talking about virtual meetings. Tell me maybe more about that. The benefits, if there are any. The downsides, if there are any, because that was a game changer here.

Murray: It really was. I want you to picture this. You've got a marathon board meeting going on. You've got 3 or 5 directors there who don't mind sitting until midnight and the managers in there, helping them out, doing what the manager does and then the directors simply get out of their chairs, walk to the elevator and they're home. The manager has to take everything down to the office, get in the car, drive home, probably wired, going to be up for a while. There's quite an imbalance there so I think for the manager this is good because we can dedicate more time and we're not worried about the travelling. These days you can access everything online and for years I've been promoting something called PBMs. Most people don't know what that means. It's a paperless board meeting. We used to use the projector to put documents on the screen. Everybody looking at the same thing. Extremely efficient. That's essentially what virtual meetings are now. It's also good for the directors. As you said earlier, most directors are coming from a good place. They want to do the right thing. They want to protect everybody's investment, but if you're somebody that travels a lot for business or if you're a snowbird, you're going to miss an awful lot of meetings. Whereas virtually you can be at every meeting. There's lot of benefits here. Some of the downside we just went through that in Ontario. We heard about access to early voting and things like that. I think that's all been corrected now so I think this is a positive change for the industry.

Rod: Right. I think also accessibility is a big improvement in a sense that, sure you mentioned the snowbirds and so on, but people with limited mobility. People with limited sight that may need a screen to enlarge whatever they're reading. People that are caring for their mother, or their son, or even their pets that would normally feel that they can't sort of go to a board meeting now they can have these board meetings from home, and so it really sort of widens the group of people that can actually participate, and that's phenomenal. Debbie, going back to you now. One of the questions, and I've seen it already in the chat, is whether people can take decisions by email. Can board decisions and board business be done by email?

Debbie: So from a manager's perspective, it is <frozen screen> the number of meetings that any property manager will have with a given board is <frozen screen>

­Rod: Is it just me or?

Debbie: Pardon me?

Rod: Yeah, you're cutting in and out. I think The Gardens is taking some of your Wi-Fi.

Debbie: Do you have me back?

Rod: Yeah, but I think it's spotty. Let's try it one last time. Okay, so, Debbie what I'm going to suggest

Debbie: Can you hear me, Rod?

Rod: Yeah. I'm going to suggest two things. I'm going to turn your image off and see if that gives us more bandwidth. Try now.

Debbie: Okay. So typically the number of meetings is governed by what's in the management contract. Most condominiums get one meeting a month, but some smaller condominiums, their contract may give them four meetings a year instead of one meeting a month. So the length of time between meetings makes it essential that you have the option of making some decisions, whether they be emergency decisions, emergency spending, a request from an owner to modify that's extremely time sensitive and you've just had your meeting the night before. The important thing to note here that it's very, very important that the decision, the email where the board made the decision and it should be one email chain is retained and saved by the manager, and that decision is noted on the meeting package for the first board meeting after it was made, and it is ratified by the board of directors in person. This is very, very important and if your manager isn't doing it they should be. It's really what's needed to protect everybody.

Rod: Right. So the starting point, folks, as Graeme and Debbie said is that you cannot have really a meeting by email. You have to have a meeting where the communication is concurrent. Live communication and now with virtual meetings it's easy to snap a quick meeting and discuss it. But for urgent decisions, or routine decisions or non-contentious decisions, and most importantly I would say unanimous decision, you can take these decisions quickly to give instructions for your manager to start running, but then you've got to ratify them at the next meeting. So there it is. You've heard it here first. Debbie, another question for you. Do you record your virtual board meetings?

Debbie: I do. Always record my meetings.

Rod: Okay.

Debbie: I know what you're going to ask me next.

Rod: Yeah, so tell me more. What's the benefit of doing that in your view?

Debbie: So the benefit of doing that is to ensure that the minutes accurately reflect what went on in the board meeting. It's ironic because I have a set of minutes come into me today and then followed emails from members of the board saying, "Amend the minutes to reflect this." I have to remind the board that the minutes should not reflect information you have been able to obtain after the meeting was held. The minutes need to reflect what was actually discussed and decided at the meeting. So and I was happy to share the recordings so they could verify. So having those reportings is very, very important. Some recordings I will retain, particularly if there are contentious issues or issues that I just know, because I've worked with the board for a great deal of time, that the recording may be needed to review by the board down the road, but the board of directors is made aware of the fact that the recordings being retained and they're in favour of doing so.

Rod: So because we're running out of time rather than ask you the question I'm going to actually tell you the answer that I'm looking for. So a couple of things if you're going to record. Debbie's right. For the purpose of drafting minutes it may be a good idea. There's a couple of things to keep in mind. One of them is, is the conversation being stifled by the fact that it's being recorded? Are people more careful? That's one sort of concern to keep in mind. The other one is, is someone using that recording to kind of do a board meeting by ambush. Basically sort of trying to line things to try to gather evidence, able to say, "Look at that. Rod said this at that meeting.", because at the end of the day the true record of that meeting are the minutes, not that recording. So I'm just going to put it out there. I think for the purpose of creating minutes it makes sense. I think you want to turn your mind to a policy pertaining to the retention of these recordings. When do you delete them and so on and so forth? Just a lot to think about if you're going to record them. That's all I'm going to say I guess at this point. An amazing question, and this is not in the program, so I want to hear what maybe the managers have to say. Alan has asked a fantastic question. It's got to do with the email addresses. Are you letting them use their own email address? Are you creating a president@.ccc whatever email address? What's the best way maybe to not lose all the corporate knowledge when somebody leaves with their Gmail address? Any sort of suggestions?

Murray: In Toronto here, what we see a lot is that for the purposes of meetings they're using their own email address. But for the purposes of the community getting in touch with the board we set up an email address there. So the directors take turns going into that and checking out what's in their. So it's a good direct communication to the board and you still have the corporate memory.

Rod: Yeah.

Debbie: I do the same, Rod. I do the same. Set up a board address but I get a cc on that email. So I've set it up so the board is aware but cannot respond and the manager gets the email as well.

Rod: Sure. So I'll tell you how we've done it at The Gardens. Not that it's the best way and the only way but I'll tell you how we've done it. So we set up a board email address, like Murray and Debbie indicated, so owners can write to that if they want. But we set it up in such a way that every director gets a copy of whatever is being emailed to that Gmail. It automatically goes in and it goes to all the directors. When we write to each other, whatever exchanges we have amongst ourselves, we simply write to that Gmail address. The board's Gmail address. So that way that is the repository. That is where the corporate memory is, and so when Rod leaves with his own rod.gmail address, it doesn't take away from the fact that all these conversations were recorded in that Gmail address which is the boards. When I leave the board I'm no longer going to have access to that Gmail address. You change the password and so on and so forth. That is how we've done it. Rather than have necessarily like a president@gmail address, or whatever it is and then passing that to somebody else, just think about that, folks, and come up with your best sort of practice. Murray, quickly, who should attend board meetings?

Murray: We get this all the time, where the general population is saying, "It should be an open board meeting. We want to be there." I'm of the opinion contrary to that. I think it's good to entertain delegates. If somebody has an issue and wants to talk to the board, you do that at the beginning, you thank them, they leave the meeting and the board can discuss that issue, openly, and without recourse. So they're not embarrassed to say something because that person isn't there. What you want to do is come to a decision and then relay the decision to that person. There's a big difference between delegates and total meeting observers. It stifles the free speech.

Rod: Yeah, for sure. A question that was not rehearsed yesterday, Debbie, and I'm going to send it your way. Somebody's asked, what about continuing the meeting after the manager leaves or does that make sense? In what circumstances would it happen that that meeting may or may not continue?

Debbie: There are certain times where I have excused myself from a board meeting and said, "This is really something you should discuss without me present.", and I'm quite confident and comfortable in doing that. It depends on the issue at hand but we work at the direction of the board. So if the board of directors wants to have a conversation without the manager, then the manager has to leave the room. I mean there really isn't anything else to discuss. The manager would leave the room.

Rod: Right and sometimes when the decision really sort of focuses on the minutiae, the colour of the carpet or the colour pattern of the flowerbed, at one point you can talk about it until you're blue in the face. I don't think Debbie needs to be there, necessarily, and frankly, at midnight she really doesn't care one way or the other. In fact, at that point in time, you'd probably want to put concrete in that flowerbed and just get it over with. Okay. So let's move on. Qualification. Director, formal qualification. Graeme is going to tackle this. So what are the qualification and disqualification of your director?

Graeme: Yes, so David kind of hinted at this earlier, but as you can see here we've got a little list here of the qualifications that are prescribed in the Condo Act. So you've got to be an individual. That means that a corporation, for example, couldn't be a board member. You have to be 18 or older. You must not be bankrupt. You must be capable of managing property and, similarly, you must not have been found by any court in Canada, or anywhere I think, to have been found incapable and you must have made the mandatory director disclosure. So that's something that can either be given orally at a meeting or usually in writing when somebody runs for the board. You have to disclose a series of things before you run for the board and that's available on the Condo Adviser website as well.

Rod: Sure, and why do you say check your bylaws?

Graeme: Well, I say check your bylaws because in fact we got a question about this in chat and it's something we hear a lot, can tenants, for example, be board members? That's one of the common ones. Or can we have 2 board members who both reside in the same unit? Under the Act, alone, absolutely. I could go potentially be a board member at one of the condos of any of the people who are here tonight. However, each condo obviously has its own operating bylaw and a lot of the times these bylaws will have their own director qualifications. Sometimes it will require the directors sign a code of ethics. Sometimes it will say that only owners can be board members and sometimes it will say that only owners and occupiers can be board members.

Rod: I'm going to push you forward, Graeme. A couple of people said, "Wait, wait, wait. You're not talking about the training. The mandatory training." That's because it falls under disqualification, I think.

Graeme: Exactly. So the disqualification. You'll see here, this is another list again taken from the Act, and this is quite similar to the qualification list expect that if you tick any of these boxes, if you are a director you're not anymore. One of those is that you haven't completed the prescribed directors training within 6 months of being appointed to the board. Another is that if you haven't provided the prescribed disclosure, if there's a lien registered on your unit and you don't have a discharge within 90 days, if you become bankrupt or if you become incapable.

Rod: Okay.

Graeme: Or, I suppose, if someone were to find a way to turn back the clock and turn themselves under 18 years old, you know, if you figure out how to do that, let me know. But that would probably cut the mustard as well.

Rod: That's coming from someone that just turned 30. I can't believe that. Can't believe that. Oh my goodness.

Graeme: Very recent birthday boy.

Rod: So, Debbie, these are the qualifications. What makes a good director?

Debbie: Oh boy. In an ideal world every single person that gets on a condo board would get on the board because they are genuinely interested in putting in the work. They have no hidden agenda. They have no vendetta. They just want to learn and be a cooperative member with the other directors and work as a team. They should be willing to take more than the mandatory training. The mandatory training is a brief overview. It doesn't give you any of the meat. CCI has some excellent courses. There's other ways to get educated but they should be willing to do that. It's challenging to get good board members. You shouldn't go on a board because you're forced. You should do it because you really, really want to be there.

Rod: Mmhmm. So I'm going to tell you something. I remember once, right after the election, first board meeting, Pat had just been elected, Patrick, and we take a tour of the facilities and we get to the roof and he looks around and he says, "Oh darn. We won't be able to install a rooftop terrace here." Then he tells us, "That's the only reason why I ran." So the poor sucker was on the board for the following 3 years because we wouldn't let him leave. So one of the questions I hear often, Debbie, is whether or not there should be a limit to the number of terms that some director should serve on. I have a strong opinion but I'd like to hear you state my opinion.

Debbie: Okay. So I think it depends. I think there are some long term directors that are just wonderful. They check all the boxes. They're there for the right reasons. They do really good work. I think there's other long term directors that do not check the boxes. So the challenge is how do you put in place some sort of legislation, policy, what have you, that ensures you can keep a director that's been there a long time but really does do good work. So, what's your opinion?

Rod: I'm going to say this. If you have a good director, and if they're doing a good job, why on earth would you get rid of them? Why on earth would you say, "Sorry, buddy. You've actually served more than 2 terms. You've got to go." It's difficult enough to get directors, and it's certainly very difficult to get good directors, and so to put that artificial barrier which is really copied on the United States sort of constitution, that just makes, to me, it makes no sense. So some people will say, "What about the power huggers that like sit on the board forever in a day?" If they're doing a good job that's great. So the threshold that they have to pass is they have to get elected. If they keep getting elected by the owners, that should kind of be the end of that debate. That's how I see it. Some people say, "How come Rod has been the president of this condo board for so long?" That's because Rod has lost a bet. Rod doesn't decide to be a president. At my first meeting, every time I say I will gladly take directorship at large, I would be very happy. They all kind of vote and, again this year, I ended up being the president. Not because I want it. There is no glory in that, by the way, but that's kind of my view. Okay, so, Murray. Let's talk about the demographics of a board. What goes into a good mix for the board?

Murray: Yeah, that's a really good question and I think to get to the answer of that, you've got to be outside of the board looking in. I think that a good demographics, a good makeup of a board, is a good representation of the condominium community. So if you have a diverse ethnic community then it would be nice to have some representation on the board. Earlier we talked about what's the right number. Well if your documents say 3, but you have a really diverse community, you might want to go to 5 just so that you can reflect more of that community. Issues like age, education, language, things like that, those can all be overcome. I don't think that that's the kind of demographics we look at. People bring life experience which is great. If we see some projects, especially in Toronto where you've got a high-rise and townhouses, so I'd say to you the demographic there is that you should have at least somebody from the townhouses representing them on the board. So it's really unique to the site and to the community.

Rod: Yeah, I agree. I think what you need to do is you need to be alert and awake to different communication styles which may be related to age, education, gender, ethnicity, cultural background. Not everybody communicates the same way. Some people may need a bit more probing to speak. I often say to a specific director on my group, "Oh, we haven't hear from you for a while. What do you think [insert name here, right]?", because I realize, for whatever reason and it may be a personality trait, or it may have to do with the cultural sort of gender sort of education or background of that person. So just be alert to that. Be awake to that to make sure that you get everybody a similar amount of time at the mic, I think. Okay, director training. Who's going to do this? David, you're going to have to do this at the light of speed.

David: Super speed. New directors of 6 months, following their election, to take their required mandatory training consists of 21 modules online. No, you don't have to sit through all of them from start to finish. It takes between 6 to 12 hours. You can do it in pieces. Once you complete, your training is valid for 7 years, and as we mentioned failure to take this training within 6 months results in your automatic disqualification. So no steps need to be taken or no one has to declare it and the CAO doesn't have to come in and police you. You are no longer a director if you do not take the training and this is all is available free and online, through the CAO website and we have some resources that you could look into for more information on that.

Rod: Okay. Wonderful. Thank you so much. So now I want to hear on the ground how Crossbridge, and how CMG, how do you train the next generation? How do you tackle that? Because the CAO training is fantastic but it's the bare minimum. It's just so you understand. You're able to find your way out of a wet paper bag but there's a lot more to it. So, Murray, how do you do it? How do you make sure your directors are up to speed?

Murray: There's no question that I'm influenced by being on the board of CCI. But CCI has some really good courses and we always recommend them. You have to understand that walking in and managing maybe a 50 million dollar, 60 million dollar asset is going to require more than 4 or 5 hours online. It just is. There's a lot to undertake and a lot to understand. I think that besides that you try to instill, or we do, at the AGM that there should be qualifications. They should set expectations for the people that are empowered to look after probably their largest investment. Especially at the beginning we do a lot of startups in Toronto. We try to get them to establish policies that say these are the qualifications and you've got to do it by this amount of time. But there's a fine balance there. If you put too much you'll never have somebody put up their hand and say, "Pick me."

Rod: That's the thing. Debbie, how do you do it? How do you shape the next generation?

Debbie: One of the things that I always encourage is that we extend an olive branch at an AGM and try to encourage people to attend a board meeting, to ask questions and get more information. I know what I'm going to say next is going to lead into the next thing that we're going to talk about, but I really push succession planning with my boards. If you have an election and you have 2 people that run in one position, the person that doesn't get elected, invite them on the board anyway. Invite them to sit in at meetings. Invite them to attend. Groom them to be on the board for the next election and do that every year. Have somebody in the wings. Pass down the knowledge and the information to somebody else. So that if you decide to leave, of there's a vacancy on the board, you've got somebody ready to take on that roll. If they're not elected, invite them to continue. Have a succession plan, it's important.

Rod: Right. Absolutely. So maybe those would be perfect officers to appoint, and you probably want them to also sign a code of ethics and confidentiality agreements, and so on and so forth. So I'm supposed to now cover the director's role and responsibilities. I've kind of covered that very briefly in the intro but basically you do everything. But you need to have a look at your bylaws because sometimes your bylaws, especially older bylaws, they kind of define what the president did, and what the secretary did, and so on and so forth. So have a look at that to see whether or not there's an expectation that goes a bit beyond what you'd expect. But at the end of the day you're duty is to conduct the affairs, to manage the affairs of the corporation. So that leads me to the next question. If we, the directors, are managing the affairs of the corporation what does the manager do? Murray.

Murray: Yeah, you know what, there's a misnomer out in the industry where everybody calls it the management contract or the management agreement. I call it the agency agreement. Right? So it lays out exactly what the manager will do, on your behalf as a director, as a board, to meet your obligations. It also is silent on a lot of things and so if it's silent on something then, in my opinion, that's something the board needs to do on their own. Or hire a professional. But I'd say look at the agency agreement, the management agreement, have a look at that and if you're going to judge the level of service you're getting from a manager, judge it against that contract.

Rod: Mmhmm. Okay. Another very hotly contested topic, I guess, yesterday when we were preparing and I saw the question go in the chat room, who should be taking the minutes? So I'm going to be asking all of you. So, Debbie, who should take the minutes? The directors, the manager, a minute taker?

Debbie: So in my opinion, it should be a revolving director taking the minutes. No one specific person. Whoever takes the minutes, they cannot effectively participate in the meeting. If they do effectively participate in the meeting, then the minutes suffer and some essential details are going to be missed. If you don't have the budget to hire a professional minute taker, then a director should do the minutes, and it should be a different director every meeting because it's a job everyone hates to love.

Rod: Yeah. Murray, who should take the minutes?

Murray: I totally disagree with that. I think it should go out and hire and professional minute taker. Anybody that's associated with the condominium has got their own paradigm. They've got their own filters and the way they hear things are the way they want to hear things. Professional minute takers have no vested interest other than providing you an accurate set of minutes. They hear what was said, not what they want to hear.

Rod: Right. Good point. So I'm going to go, my opinion, it should be the manager. I realize that it all varies on the size of the condo, and so on and so forth, but I remember my first term. In those days we were taking our own minutes and I hated it. It was like 10:30, 11:30, midnight and I'm in bed and I'm typing up what we've just discussed and it was just kind of a disaster. I prefer to have somebody else take the minutes and in my view the manager would be able to do a good job at that. But I hear Debbie, I hear you, Murray, I don't disagree with your position but certainly not Rod. Rod doesn't want to take the minutes. And as you said yesterday, Murray, you said it's got to be a neutral participant in a way. In fact, I think what you said yesterday, you said if one of them is taking the minutes you tell them, "Put your pen down. Have the debate and then

Murray: And all agree. All agree on what the minutes will reflect.

Rod: Yes. Perfect. I'm going to skip this topic because we're running out of time because I want to cover the standard of care. I think it's David that will cover that. What is the standard of care of a director? First, what does that mean? What do we mean when we say standard of care, David?

David: Yes, so the standard of care means the standard to which a director's decision making is legally analyzed. So someone, I saw a number of questions in the chat, what happens if a director makes a wrong decision? Can we sue them? What standard are they held to? Here's your answer here. The director's standard of care is to act honestly, in good faith and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. So, this does not mean that a director always has to be right. Always has to make the perfect decision. Their decision making, after the fact, is looked at from this lens of what would a reasonably prudent person, in comparable circumstances, have decided? This has come up a lot recently with decision making during COVID, when it's been such a rapidly changing and difficult situations to have to read and react to. The courts will definitely, I think, consider what would a reasonably prudent person, in these circumstances, these crazy circumstances have dealt with? A director is generally, in most situations, indemnified by their corporations governing documents means that they have the director and officer insurance. There's the errors and omission insurance and all that and they're generally indemnified, meaning the insurer will cover the defense or any cost that arise out of it, and that only doesn't occur if the director breaches their standard of care. Depending often on your language of your insurance documents and all that. But this is the general framework to keep in mind.

Rod: Yeah, and the courts are going to forgive errors. Even errors of judgment, to some extent, and even negligence because you are not expected to be perfect. As long as you've acted honestly, and in good faith, and as David said you exercise the care, diligence and skill. David, do we have time, 30 second sort of dive into the Ballingall case, because I think that case gives us a very good idea of what is acting in good faith and what's not acting in good faith.

David: For sure. I think the Ballingall case is a perfect example of what not acting with what the requisite standard of care is. It's a case that I think goes back to 2014, and it basically dealt with the enforcement of a single unit definition in the declaration, and one director was very personally invested in the outcome, let's say, and when on a campaign to do everything possible to make sure that the enforcement of this definition didn't occur and the court basically made a number of findings that I'll quickly name a couple. A reasonably prudent director of a condo would not undermine board decisions. Would not mislead unit owners. Would not encourage you unit owners to distrust the board. Would not undermine the legal advice from the corporation's counsel. Would not provide his own legal advice to unit owners. Would not make the board dysfunctional. Would not promote antagonism and dissent on the board. Would not threaten other board members and would not put his own economic interests ahead of the legitimate interests of all categories of unit owners, and a reasonable prudent director, on the other hand, would try and seek compromise that respected the disparate legitimate interests of all the unit owners. So that is, in a nutshell, what not to do as a director. You can't, from your perch of power, air your dirty laundry in public and try and bring forward personal vendettas and, always keeping in mind there is this legal standard of care, to which you can be held if you do that.

Rod: Okay. So, David, there's a special request. You're going to have to send me that list. We're going to put it on the slide and we'll put it up. Oh, actually, is it here? Is it all here?

David: No, it's not all in there but I can add it. It's from our trusty blog post on Condo Adviser.

Rod: Fantastic. So, please add the slide and then I'll upload it.

Murray: Rod? If I can, there's one more thing that I think directors need to understand. Property managers are now licenced and we have a code of ethics that we have to follow and the companies, the management company, is licenced. Directors should not be asking managers to do something that's contrary to their code of ethics. Sometimes managers will feel pressured and they'll do it, even though they know it's wrong, but that places their licence and the licence of their employer at risk. I think that's an important thing to remember and if a manager says to you, "I can't do that because of my licence.", you need to respect them.

Debbie: 100%25 agree. 100%25.

Rod: Wonderful. So we're out of time already and so I'm going to go around. I'm going to thank you, of course, and I'm going to ask you a question. That was not rehearsed so you better get ready for this one, folks. Just because we're running out of time so I want to kind of squeeze that in. So maybe I'm going to start with you, Murray. Murray Johnson from Crossbridge, thank you so much for being with us tonight. It's a fantastic pleasure. You're an amazing resource. I hope we can bamboozle you to come back some other time. Let me ask you maybe this question, should the minutes of a board meeting be circulated to the owners automatically or is there another option?

Murray: I think it's good to circulate those and I think it's good to make it automatic. So that also forces the board to do what we've all referred to as 'in camera' but a separate set of minutes with those confidential decisions. I think it's good. I think it's good for people to see what's going on.

Rod: I'm going to have the same question for you, Debbie. Debbie MacEwen with the Condo Management Group in Ottawa, which is the biggest condo management provider in Ottawa. So, Debbie, what do you think? Automatic circulated, or do you let people ask for it, or do you circulate newsletters? What's a good way?

Debbie: I think information is power and the more information you give owners the happier they will be. So yes, 100%25, minutes should be circulated without being asked. It's difficult to get a board to agree to that, unfortunately, but it should be done.

Rod: Okay. Well I'm going to have to give my views on that, because I'm not entirely sure I agree with all of that, because I think information is like alcohol. A bit too much of it gets people drunk. So I'll get to that in a minute. Let me go and thank my good condo twins here tonight and I have a tough one for you, folks. So of course we have David Plotkin. David, thanks so much. I guess no helicopter flying over?

David: It's left us alone. The helicopter pilot is watching the webinar.

Graeme: They landed to watch.

Rod: Nice. Nice. So, maybe words of wisdom for you, David. I'm going to save my question for Graeme because he actually heard my answer yesterday. Hopefully he was taking notes.

David: Words of wisdom. Just be reasonable in the circumstances and recognize the roles and responsibilities of each of the different managers, directors. Everyone plays their part in condo governance and owners play their part as well in being members of the community. That's what I would say.

Rod: Okay. Fantastic. Graeme. Graeme MacPherson, your condo lawyer with Gowling WLG, what can a director do if he or she disagrees with the decision that's being taken? You're there. You disagree. What would be sort of a recourse you think?

Graeme: Well, in that circumstance there's a couple of things you can do. One, nobody's chained you to the board. You can always step down but it is also open to directors, and we've been a part of cases where a minority group of directors has come to us and said, "This is what's going on at our corporation. Is this really pursuant to the Condo Act? Is this really in the best interest of the corporation?"

Rod: Right. So what I often tell people is this. First, if you disagree with the way the board is going, because once the vote is taken the vote is taken, and then you have to just follow the train. So what I tell them is if you disagree, make sure that the vote is recorded. Yes?

Graeme: Here it comes. Here it all comes flooding back. I hear Rod in my head saying, "Make sure it's recorded in the minutes of that meeting that I do not agree with this."

Rod: Right. Make sure it's recorded in the minutes and if you still disagree, if they're really going off at the edge, if what's taking place is illegal or is improper, resign. If you have to, resign. Resign in the meeting and then go to your suite and send an email, I resign from the board at 8:55 today for the following reason. That way when the manure hits the fan you're not stuck sort of holding the basket. Okay, so what else do I need to say very quickly? Folks, this was a very quick webinar. A lot of participation in the chat. Thank you so very much. We're going to meet again, Wednesday, March 2. If you have any suggestions as to what the topic you'd like us to cover, send us your topics, your suggestions. We're open to that. Thank you so much for taking the time to log in. I realize that this is an hour of your life that you'll never get back and hopefully you felt that it was useful. So that's it for me. I'm signing off for another month. I'm going to put my flak jacket and army hat to go and do my groceries in the streets of Ottawa. Wish me luck. To register, by the way, next webinar you'll need to register again. You'll be able to register by clicking on the webinar tab and that's it. That's it for us. Be nice to each other. Wear a mask. Get a vaccine shot if you can and let's meet next month with a different topic. Thank you so much, everybody around the panel, and that's it for us. Good night, everybody.

It says again February 2 but it's going to be March 2, folks. March 2 is when we meet next. Thanks, everybody. That was fun.