Condo Governance: Choosing the Right Board

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Board Interview.jpgDoes it really matter who is elected to the board of directors?

ABSOLUTELY!

Electing the right directors to your condo’s board is one of the most important steps you can take to protect your investment and home. The board makes dozens of decisions relating to the ongoing and future operations of your condo. Day-to-day decisions such as renovation approvals or larger one-time decisions regarding repair of common elements are all within the ambit of the board’s duties.

The board can even pass or amend rules preventing you from getting a(nother) pet – for more info, sign up for our upcoming Pet Seminar, It’s Raining Cats and Dogs! Whether or not the board must consult with or gain approval of the owners before implementing these decisions is a complex issue, outlined in our three-part series on the topic.

With this in mind, it is quite surprising how many owners are so apatehtic when it comes to attending condo meetings or submitting proxies to vote for a director. In a recent blog post, Rod Escayola discussed a case where a director committed physical and verbal assaults aimed at other directors, owners and services providers. Director’s actions and decision-making truly can change the trajectory of a condo, both positively and negatively.

The director position comes with a lot of responsibility but is also very rewarding (typically not financially so, although section 56(1) of the Condominium Act (the “Act”) allows the board to make a by-law relating to director remuneration). Being on the board of directors is wildly interesting! Boards are consistently challenged by the conflicting concerns of unit owners and trying to create solutions to unique problems. They are always learning about new products on the market and discussing ways to improve the condo. And best of all, directors are intimately involved in the decisions that affect each and every owner and resident in the building.

The primary obligation of a board is to manage the affairs of the condo corporation, as stated in section 27(1) of the Act. This is a far-reaching duty that requires the board to manage the condo in the best interests of the entire corporation. It is important for owners to conduct their due diligence in assessing the candidates for directorship to try to ensure that a condo will be managed effectively and in accordance with the Act.

Three qualifications are required of a director. According to section 29(1):

  • the person must be 18 years of age or older
  • the person shall not be an undischarged bankrupt
  • the person shall not be incapable of managing property within the meaning of the Substitute Decisions Act, 1992.

There are no other necessary prerequisites, unless the by-laws of the corporation require additional qualifications. Since the threshold under the Act is not incredibly onerous, owners must expend extra effort to make sure that a qualified director fills the board’s vacancy.

To better assist unit owners at making this important decision, my condo recently held its inaugural “Meet the Candidates Evening,” whereby candidates schmoozed with the owners and answered their questions. All those who attended appreciated the event and were better informed when deciding whom to vote for at the annual general meeting. It will certainly become an annual tradition and our board will recommend the event as a “best practice” to other condo boards.

 

Published In: Business Organization Updates, Elections & Politics Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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