As the public response to Coronavirus (“COVID-19”) expands, it has become clear that the best course of action to reduce the risk of transmission is to practice social distancing. In addition to impacts on daily life that are quickly becoming apparent, there will be repercussions on the corporation’s operations and legal functions, such as board meetings and AGMs.
Board Meetings and AGMs
As of March 16, 2020, Ontario’s Chief Medical Officer of Health, Dr. David Williams, has recommended the suspension of all events and public gatherings of 50 people or more. Given the trajectory of recommendations and restrictions in locations with more advanced stages of COVID-19 transmission, it is likely that the attendance limit for gatherings and events will continue to rapidly decrease.
At this point in time, we recommend that board meetings and annual general meetings be held through alternative means or postponed. Board meetings, in particular, can be held through teleconference or video calls. Subsection 35(5) of the Condominium Act, 1998 (the “Act”) permits a meeting of the directors to be held by teleconference if all board members agree to the procedure. In our view, there is no rational reason to distinguish between a traditional teleconferencing service and popular video conferencing apps, such as Skype, in the face of current public health concerns.
Alternatively, formal board meetings could be postponed until the current situation improves, with the necessary business of the corporation being conducted by email.
AGMs, many of which traditionally take place throughout the spring months, pose different issues. First, the number of people present at one time is much larger than what would be present at a board meeting. Second, the Act makes no specific provision for alternative methods of conducting AGMs. While it is possible for a corporation’s own by-laws to specify alternative methods of attending a meeting, to our knowledge very few corporations have passed such provisions.
There are three possibilities for corporations that, in normal circumstances, would be required to hold their AGMs in the near future (Subsection 45(2) requires an AGM to be held within six months of the end of each fiscal year).
- Continue with the AGM as planned. While there are certain circumstances where this could be feasible, such as corporations with few units or most units being represented by proxy, for most corporations continuing with the AGM at this time would not conform with current public health recommendations. Accordingly, we recommend against proceeding in person at this time, wherever possible.
- The AGM could be postponed until such time as public health officials advise that it is safe to resume normal activities and hold large gatherings of people. Depending on the make-up of your own particular community, for instance the level of electronic participation that could be expected from your owners, postponement may be the preferred option.
- Make arrangements to conduct the AGM through teleconference, videoconference or other remote participation options. While many corporations may not have the explicit authority to proceed with electronic participation, it is our view that it is justifiable to hold the meeting remotely in the face of current public health concerns. However, this option should only be explored as a last resort and in consultation with legal counsel.
While we are unaware of any precedent to allow delay in compliance with Subsection 45(2) of the Act, the current COVID-19 concerns are frankly unprecedented since the first Condominium Act came into force over fifty years ago. At this point in time, the recommendations and/or restrictions put in place by public health authorities and other government agencies in response to COVID-19 take priority over any other requirements.
We further note that other legal processes, such as the vast majority of court cases, are currently suspended. In our view, a decision to postpone an AGM until conditions improve is easily justifiable.
We strongly encourage all corporations to adopt and communicate recommendations and best practices from trusted sources, such as Toronto Public Health and provincial and federal agencies. As already discussed, social distancing, proper hygiene and sanitization are the best line of defence.
As restrictions (whether self-imposed or ordered by public health officials) on businesses, ranging from reduced hours to temporary closure, spread, many corporations are considering what, if any, amenities should remain open. In our view, it is reasonable for boards to place restrictions on use, such as reduced hours, or to temporarily close building amenities.
The board may ultimately rely on the information and recommendations of public health officials and its obligations to manage the property and assets of the corporation to close the amenities. The closure of amenities during other situations, such as construction or after a fire or flood, would not be seriously questioned where the intent is to protect the health and safety of residents. It is unlikely that a corporation could be found liable for making decisions that conform to public health recommendations and broader business practices, such as the closure of certain gyms throughout the province.
Many corporations are also considering to what extent, if any, couriers or other deliveries should be allowed inside of the building. Where possible, deliveries should be left with the concierge or healthy residents should meet couriers at the main entrance door to the building.
If a resident is in self-isolation, in addition to the other recommendations set out below, some flexibility may be required. Options such as having the concierge accept a package and leave it outside the unit door or “no-contact” deliveries, which are increasingly becoming available, can be used. While corporations are not health care providers, decisions and restrictions should be made in consideration of residents’ need to obtain basic essentials in the event that they are in self-isolation or quarantine.
If a corporation receives notice that a resident is in self-isolation or quarantine, we recommend that notice be provided to the residents that:
- Informs them a resident in the building is in self-isolation or quarantine. The notice should not specify the individual or any other identifying information. Any direct requests from residents as to the identity of the individual, what floor they live on etc. should not be answered and the resident should be referred to the general notice;
- Re-states the health and safety measures that the corporation continues to take, such as additional cleaning and the availability of sanitary products; and
- Advises that the corporation will be in contact with the relevant public health officials, will follow their directions and provide further information, as necessary.
Contractors and Employees
Employers must take reasonable precautions to protect the health and safety of their workers. We currently recommend that corporations follow all public health recommendations and make contingency plans for potential service disruptions (concierge, cleaning staff etc.).
We recommend that corporations require all employees, staff and contractors:
- To disinfect their own hands frequently and take further protections, such as wearing and frequently replacing disposable gloves;
- To focus on sanitizing essential common element areas, such as entry doors and elevator buttons; and
- To consider whether entry into any unit is essential, and provide a notice with detailed information on the reason for entry and the health and safety precautions that will be taken, if entry must be made.
With limited exceptions, occupational health and safety laws permit employees to refuse work if they reasonably believe the work is unsafe. If a corporation receives a work refusal, it should immediately investigate the concerns in accordance with the requirements of Ontario’s Occupational Health and Safety Act. If any health or safety improvements are identified, the corporation should take adequate measures to respond.
While corporations cannot ban the personal travel of employees, restrictions can be placed upon the employees’ return.
Corporations may wish to consider implementing and communicating that residents must disclose all travel within the last 14 days. For employees who have just returned from travel within the past 14 days, advise them:
- To refrain from attending the building for the period of self-isolation recommended by public health authorities;
- To monitor their health, follow the recommendations of the Government of Canada, as set out in PHAC’s COVID-19: Information Sheet – Travellers returning to Canada, and comply with the recommendations of the applicable provincial and local public health authorities; and
- That, at the end of the period of self-isolation, if the employee does not develop any symptoms, they may return to work at the employer’s premises.
The ultimate duty of each corporation and its board is to manage the property and assets on behalf of the owners. The correct course of action to be taken in fulfilling this duty depends on the current situation and challenges faced at particular moments in time. Taking appropriate steps, based on the current recommendations of public health officials, to protect the health and safety of residents, owners and employees fulfils your corporation’s fundamental obligations.
Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment. For articles, information updates and firm developments, please visit our COVID-19 Resources page.