Canada's Condominium Magazine
New rules now passed by the Ontario Government will change Condo Governance, strongly favouring and protecting residents. [See our coverage of the changes to the Condominium Owners Act here, with copy of the full document here>> ] Like any law, though, residents still have to be watchful and aware of their Condo Board governance.
While a lot of these changes, by default, will remedy some of the weaknesses in the system — such as who can serve on the Condo Board — it’s still important for you, as condominium owner, to safeguard your community by being active with your Condo’s governance — at least from the level of “staying informed.”
How can you be sure that your board is run in accordance with the law and that they have your best interests in mind?
Who runs things?
The first thing you should know is who runs the board. The board of directors should oversee the property manager. Everyone involved should be in good standing with the community, and the board members should all own units in the building. If they do not, then residents should question their motives and their interest in the serving on the board. [This is addressed in the new Act, but this is new legislation, not fully enforced as of yet.] Do they have something to gain from certain rulings? Do they have a particular interest in gaining control of the budget? They should have no financial interest in the property itself, vendors, investors, etc. If they do, you should look for any other red flags as well.
You should also be aware of their credibility, reputation, and expertise. Ideally, you will want the board to be run by residents who have experience and knowledge that will aid them in their position. The people running the board, particularly those who maintain the budget, should be financially literally and fiscally responsible. If they have a history of suspicious activity or poor spending habits, then they should not be in control of anyone else’s budget.
Transparency is also a must. There are times when residents might be excluded from a meeting — such as when the agenda is confidential due to complaints or some investigative matter [See “Ask the Lawyer” Richard Hoffman answers a reader excluded from a meeting>>] They should be completely open and honest about their credentials and their motives for running the board. If they seem to be hiding anything or refuse to answer questions on topics that really should not be kept secret, then this is a sign that something is wrong. Be sure to do background checks on property management, board members, investors, and anyone else who has anything to gain from certain rulings. If they have connections that they have kept hidden, then that could very well be a huge red flag.
Additionally, you will want to take the time to read your condo’s charter. Be sure you are aware of all rules, bylaws, and disclosure statements and that you understand them fully. Familiarize yourself with the board’s code of ethics. If you know how the board should be run and how the property should be maintained, then you will be more likely to notice if anything is amiss. If you have any questions about the rules and statements or you do not fully understand them, then you should seek the assistance of a lawyer who has experience with condominiums and their laws.
Minutes and Statements
You should also have access to meeting minutes, financial statements, and other important documents to which residents have rights. If you receive them in a timely manner, then the board is likely running smoothly and legitimately. However, if anything is hidden or something seems off about the documents you received, then this may be a sign of trouble. Condo owners have the right to know how the building’s budget is used, what the board is doing, how meetings are run, and what plans are underway for the building. Board members should not keep you out of the loop or withhold information, unless it is absolutely necessary.
Above all, you should be confident in your board’s practices and feel as though your voice is heard. Do you and other tenants get swept under the rug, while the board continually rules in favour of the same people over and over regardless of the situation? Do you see any other peculiar patterns in the way things are run? As a condo owner, you want to be sure that your board and management are working together to ensure the best outcome for the building as a whole. No bias should be present, and the rules and bylaws should be upheld in all situations without exception. If any changes need to be made, then the board should call for a vote. They should follow a code of ethics in all their activities and proceedings, and you should have unwavering confidence in how things are run. If not, then listen to your gut and look into anything that you find worrisome.