Draft Reg#2 - Part 4

The draft regulations also address another issue that causes a lot of disputes in condominiums - record requests. It also sets out requirements for how long records must be retained and the permitted methods of retention. These changes are scheduled to come into force in the fall of 2017.  Record Retention  According to the regulations, there will be two primary retention periods: 1) a default 7 year minimum period for financial records and other operating records; and 2) an unlimited period for fundamental documents (i.e. declaration, by-laws and rules, current agreements and insurance policies). If a record is maintained but it is not one identified in the regulations, the board will be able to determine the appropriate retention period. There is a useful chart included in the short version of the draft regulation that outlines the records that must be retained and the appropriate retention period for each type. In some cases, the minimum retention period could be extended. For instance, if there is a dispute regarding ballots or proxies, they must be kept until the dispute is abandoned or resolved. Similarly, if there is an outstanding record request, the condominium cannot destroy the record until the request is abandoned or resolved. Finally, the regulations permit the condominium to maintain records in paper and/or electronic format so long as the certain requirements are met. For instance, if it is a paper record, it must be kept on the property (if appropriate) or if not on the property, at a location that enables the condominium to perform its duties and that is also "reasonably close" to the property. This requirement is targetted at the condominiums that require owners to travel long distances to attend at their manager's office to access records. For electronic records, they must be capable of being reproduced within a reasonable time, and they must include a password or other method to protect against unauthorized access. Steps must also be taken to protect against loss, damage or inaccessibility, such as automatic back up or recovery. Access to records The process for examining records is getting a big shake up, in large part, because of the restrictive interpretation of many boards, managers, and lawyers when faced with a request from an owner. The aim of the amendments and regulations is to ensure that the owners have more liberal access to the records. The process has been standardized to make it easier for owners. There will be four steps: 1) request; 2) board's response; 3) requester's response; and 4) access and accounting for charges. There will be standard forms for the first three steps. The length of time for providing access to the record will depend upon the type of record requested.

• Core documents (i.e. declaration, by-laws, rules; current budget; recent financial statements; record of owners; minutes within past 12 months; recent reserve fund; and more) must be provided: 1) within 15 days of receiving the request if the requester selects electronic delivery and it is available in electronic format; 2) within 7 days of the requester's response to the board's response if paper copies are selected; and 3) within 7 days of the requester's response and payment if the requester chooses to examine the documents in person.
• Non-core documents use the same process, but the condominium has 30 days from the date the requester's response and payment are received to provide the records or access to examine them.

There will also be limits on the fees charged. For printing or photocopying, the maximum will be 20 cents per page. If the requester accepts electronic format and the records are available in that format, the person may choose to receive electronic copies or pay to have them printed for examination or delivery. Labour and copying charges must be "reasonable" and should only reimburse the condominium for the actual costs incurred (i.e. charges from the manager). The owners will be entitled to core records at no cost for copies provided in electronic format, or paper copies if they requested electronic format and were provided paper. If they received paper and did not request electronic, a maximum of 20 cents per page can be charged for core records; no labour charges can be charged for core records. There will also be an obligation to account for the actual cost versus the estimate. If the estimated cost is lower than the actual cost, the condominium can insist upon payment up to a maximum of 10% above the estimated cost. If the estimated cost is higher than the actual cost, the condominium must reimburse the requester. Requests will be considered abandoned in two situations: 1) if within 60 days of receiving the board's response, the requester does not return the requester's response or start a dispute process (i.e. tribunal or court); or 2) if within 6 months of the request, the requester does not start a dispute process. The regulations also clear up some common misconceptions about what records may be accessed. Records related to persons in their role as director or officer (i.e. disclosure of conflict of interest) will be eligible for access even though they relate to a specific owner or unit. Email addresses of owners will not be eligible, for access, unless the owner agrees. Opinions from lawyers or paralegals with respect to specific units, owners, or purchasers would be exempt from access, unless the condominium decides to produce them. Ballots and proxies that identify specific units would also be exempt, unless a by-law provides otherwise. The process is changing and so is the penalty for non-compliance. Where a condominium, without reasonable excuse, does not permit access to the records, the new penalty will be a maximum of $5,000.00 (up from $500.00). Interestingly, the Act and regulations now expressly authorize managers to access records reasonably required to manage the condominium. The regulations address the situation of access to records by a manager, including access to records when a manager is no longer the condominium's manager. That is it for now on the second draft regulation. I encourage you all to take the time to review it and provide your feedback to the government before the end of March.