Effective December 31, 2026, Ontario is changing the rules governing the “owner-occupied” position on condo boards. The changes go well beyond giving this position a new name. Owners better pay attention or risk losing that reserved position.
What you need to know about the new "non-leased" position
This blog post is long, so here is a summary of everything you need to know about the new “non-leased” position:
- The “Owner-occupied” position changes name to “non-leased”
- For a unit to qualify as non-leased, it must not have been leased in the 60 days preceding the notice of meeting
- The non-leased position on the board is no longer automatic, it must be requested by the owner of a non-leased unit
- The preliminary notice will give owners a deadline to request that a position be reserved to non-leased units
- If a non-leased position is not requested, all board positions are submitted to a vote by all owners
- If non-leased units form the majority at the corporation, this reserved position no longer exist
- These changes come into effect on December 31, 2026
Change of name
Under the current Condo Act, if at least 15% of the units are “owner-occupied units”, one position on the board is reserved for election by the owners of those units.
But the expression “owner-occupied units” has always been a somewhat of a misnomer. The owner does not actually have to live in the unit for the unit to qualify as “owner-occupied”. An owner could spend the entire year travelling the world, leave the unit empty or could allow a family member to occupy the unit and the unit could still qualify as “owner-occupied” despite the owner not actually occupying it.
What essentially mattered under the current definition was that the residential unit had not been leased during the relevant period.
On December 31, the Act finally adopts terminology that better reflects this reality. The “owner-occupied unit” becomes a “non-leased voting unit.”
Not quite as catchy, perhaps, but certainly more accurate.
The reserved position will change its name from “owner-occupied” to “non-leased”. If sometimes a change in terminology is just semantics. This one isn’t.
What is a “Non-Leased Voting Unit”?
Broadly speaking, a non-leased voting unit is:
- a residential unit
- whose owner is entitled to vote (ie, not in arrears exceeding 30 days) and
- which has not been subject to a lease in the 60-day period preceding the notice of meeting
Importantly, the regulations tie the determination of whether a unit is leased or not to the corporation’s leasing records: if the unit appears as a leased unit in the corporation’s record, it does not qualify as non-leased. It will be as important as ever to ensure the corporation’s records are accurate.
To be clear, it is not the candidate who needs to own a non-leased unit. It’s the voter that does.
The 15% Rule is Gone
Under the current system, once at least 15% of the units qualify as owner-occupied units, the reserved position existed. It was not optional. That threshold disappears on December 31.
New Criteria for Non-Lease Position to Exist
Under the new regime, the reserved non-leased position can apply:
- where there is at least one non-leased voting unit
- the non-leased units represent a minority of the units in the corporation
- and the owner of a non-leased unit asks for a position to be reserved to their vote
The Reserved Position Will Have to be Asked for
This is probably the biggest practical change.
The reserved position will no longer automatically spring into existence because the corporation has crossed a mathematical threshold.
Instead, after receiving the preliminary notice, owners of non-leased units will have 15 days to provide the required statement and request that someone be elected to the reserved position.
The request for a position to be reserved to non-leased units:
- Must be from an owner who has not leased their unit in the 60-day period
- This owner must be entitled to vote (ie is not in arrears for more than 30 days, for instance);
- The request must be in writing
- It must be signed by the owner (It seems odd that the new regulations continues to require a “signature” when, in this digital age, that concept has expanded to include everything from an electronic mark to a simple click.)
- It must be provided to the board within the set deadline and in the set manner
If nobody makes that request within the deadline, the special voting rights associated with the non-leased position are not triggered and all positions are open to be voted by all owners.
The Preliminary Notice Becomes Much More Important
To make this work, the preliminary notice is also changing. Where a vacancy exists (or will arise) for the potentially reserved position, the preliminary notice must alert owners to that effect.
The preliminary notice will need to:
- Identify that a position may potentially be reserved for non-leased units
- identify the deadline for an eligible owner to request the reserved position
This is important. Owners will need to pay attention to the preliminary notice. Missing the deadline could mean missing the opportunity to have that position reserved for voting by non-leased owners.
What Happens if Nobody Requests the Reserved Position?
This may be one of the more interesting consequences of the amendments. If no one asks for a board position to be reserved to owners of non-leased units, then all owners get to vote on all positions.
That makes the preliminary notice process considerably more consequential than it is today.
What if Nobody Wants to Run for the Reserved Position?
There is also an interesting flip side. What happens if an eligible non-leased owner requests that the position be reserved, but nobody expresses an interest in actually running for it?
The new regime separates these two concepts:
- one owner can request that a position be reserved to be voted on by non-leased owners
- a candidate can run for that position.
So, at least in theory, the owner of a non-leased unit could request that a position be reserved to their vote even though nobody has stepped forward to fill the position. While unlikely, that could leave the corporation with a reserved position but no candidate to fill it. And because that position has been carved out of the general election, the corporation may be left dealing with a vacancy rather than simply allowing all owners to elect another director to that seat. I’m not sure how this will be dealt with…
What We Like
1.
The new terminology is an improvement. Calling the position “owner-occupied” suggested that the law was distinguishing between owners who lived in their units and absentee owners. That was never quite accurate. “Non-leased voting unit” is clunkier, but it better describes what the legislation is actually concerned with.
2.
There is also some logic in reserving the non-leased position to instances where non-leased owners are the minority. If non-leased units are already the majority: there is no need for the non-leased position. This may mean that, in practicality, the non-leased position will not exist in the majority of condo corporations. At least one can always hope.
What we like less
1.
Not sure if I’m alone in this, but I feel like we missed an opportunity to get rid of the non-leased position all together. This has been and continues to be the source of confusion and, ultimately, I’m not sure it is worth the trouble. In my view, when it comes to voting, an owner is an owner – whether they occupy (or lease) their unit or not.
2.
If we’re going to keep the non-leased voting concept, I’m of the view that keeping the 15% threshold was a whole lot simpler. I fear that requiring owners to request that position, within a short turnaround time set out by the preliminary notice, is adding an element of complication. I suspect one of two things will happen. Either there will be a lot of disappointment when people realized they missed the window to request a reserved position or the reserve position will die a long protracted death when owners simply stop asking for it.
3.
Focusing on leases (or absence of leases) when determining a right to vote continues, in my view, to be somewhat problematic. First it requires that the owner comply with their disclosure obligations. Second, we may be having debates over whether the owner’s son who occupies a second unit does so via a lease. I also find it odd that an owner could own multiple units with that special voting right (for instance if they let a family member occupy one of their units without a lease).
4.
I’m also somewhat surprised by the fact that a single owner can trigger this statutory requirement. To my knowledge there are no other rights under the Condo Act that can be triggered by a single owner.
5.
Finally, unless I missed it, the new rules surrounding the non-leased position do not appear to address which term should be reserved for non-leased owners in the event there are multiple vacancies with different terms. It may have been simpler and avoided frictions to allocate the longest term to this position (when there are multiple vacancies with different terms).
When all is said and done, this change in name only reminds me of Shakespeare’s famous quote: A rose by any other name would … have as many thorns.
