Does a unit that’s purpose is to display a sign (i.e. Sign Unit and/or Pylon Sign Unit) have a voting interest?
The Condominium Act, 1998 makes reference to the following types of units:
- units intended for residential purposes;
- units intended for commercial purposes;
- units intended for parking purposes;
- units intended for storage purposes; and,
- units intended for the purpose of housing services, facilities or mechanical installations (“Ancillary Units” – this is not a defined term, but a term used here to classify units which fall under this definition).
The Condominium Act, 1998 distinguishes voting units from non-voting units by setting out in section 49(3) the following:
No owner shall vote in respect of a unit that is intended for parking or storage purposes or for the purpose of providing space for services or facilities or mechanical installations unless all the units in the corporation are used for one or more of those purposes.
The problem explored in this blog is that Sign Units and Pylon Sign Units are not explicitly prohibited from voting under section 49(3). So do these types of units have the right to vote?
No! Sign Units and Pylon Units do not have voting rights (unless all the units in the condo are used for that purpose).
It comes down to how Section 49(3) is interpreted. There are many principles of statutory interpretation we can rely upon, including giving something its “plain and ordinary meaning” and that an interpretation must not produce an “absurd consequence”.
The terms “services”, “facilities”, and “mechanical installations” have plain and ordinary meanings. A space for services would include spaces that provide services to the building (such as utilities); facilities, which would include a place, amenity or piece of equipment provided for a particular purpose; and mechanical spaces which would include a space that houses mechanical equipment. These terms are fairly broad and are intended to capture those other types of units created by a developer that aren’t really the crux of the condo.
In addition, if an interpretation leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislation, then it is considered “absurd”. Any interpretation of section 49(3) in which Sign Units and Pylon Sign Units have voting rights produces an inequitable and absurd consequence.
Accordingly, Sign Units and Pylon Sign Units are captured under the definition of an Ancillary Unit.
If developers had the ability to designate any portion of a condo corporation as a “voting unit”, such as Sign Units and Pylon Units, this would permit a developer to retain control of a significant voting interest while contributing de minimis amount towards the common expenses, since those types of units typically have minimal if any common expense allocation.
Keep in mind that even though a unit may not have a voting interest, all notices under the Condo Act (including AGM packages) are still required to be sent to the owner.
