Forms for Ongoing Disclosure by Directors
A lot has been written about the obligation of candidates to disclose information and make certain statements prior to their election or appointment to the board of directors. The Act requires candidates to satisfy the disclosure obligations prior to their election to be qualified as directors (see section 29(1)(f) of the Act). Whether the disclosure may be made orally at the meeting or in writing depends upon a number of factors, including when the person notified the condominium of their intention to be a candidate and the condominium's by-laws. There is no prescribed form for making the required statements in writing, but many law firms and management companies have created forms for candidates to complete prior to the election. The requirements for candidate disclosures are described in section 11.6 of O.Reg. 48/01.
Less has been written about the ongoing obligation of directors to update certain information and statements during their term on the board. The directors already had an obligation to disclose material interests in contracts or transactions involving the condominium (see section 40 of the Act), but the amendments have added new disclosure obligations that directors must satisfy after their election or appointment to the board. The failure to satisfy the disclosure obligations within the time required results in the director being disqualified from the board of directors (see section 29(2)(f) of the Act). The disclosure obligations for directors are described in the disqualification of directors section 11.10 of O.Reg. 48/01.
The most interesting note in this part of the amendments, in my opinion, is that the disclosure obligations for candidates and directors are not the same. Put another way, prior to their election or appointment candidates must disclose information that directors are not obligated to disclose once elected or appointed, such as whether they own a unit, if they occupy a unit, if they are in arrears for 60 days or more, and if they personally are a party to any litigation involving the condominium. This seems a peculiar omission. Why would this information not be important to owners once the candidate is elected or appointed? I'm a condo owner and I would want to know if any of the directors of my condo were no longer owners, in arrears, or involved in legal action with the condominium.
Another interesting note is that the disclosure obligations for directors are not the same for all directors. For example, directors appointed or elected by the declarant to the first board under section 42 of the Act have fewer obligations than those elected to the board by the owners or appointed by the board. The obligations also depend upon whether the election, appointment or disclosure being made (i.e. conviction, legal action involving the condominium) occurred before or after November 1, 2017.
Lastly, it is important to note that not all lawyers agree on the interpretation of the disclosure sections of O.Reg. 48/01 so it is important to discuss it with your condominium's lawyer.
Here are the director disclosure forms that Daniel and I have created:
Please let us know what you think of the forms.