By: Jayson Schwarz LLM
I have been receiving many questions and complaints about the Board of Directors (the “Board”) of a number of condo corporations. The Board appears to be one of the most misunderstood entities and frankly when buying either a new or a resale condominium you need to understand the nature and powers of the Board, as it is the Board that will set the pattern, standards and rhythms of your condominium.
S.27(1) of the Condominium Act (the “Act”) provides that “A board of directors shall manage the affairs of the corporation”. This about covers everything. S.36(2) of the Act says that “Subject to the by-laws, the directors, (a) shall elect the president from among themselves; (b) shall appoint or elect the secretary; and (c) may appoint or elect one or more vice-presidents or other officers.” So hopefully you are beginning to see how important the make up of this Board can be.
In s.37 the Act provides that “Every director and every officer of a corporation in exercising the powers and discharging the duties of office shall, (a) act honestly and in good faith; and(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.” This means that the conduct of the Board is judged on the basis of a reasonably careful person doing this kind of job but requiring honesty and integrity. As an example the Act provides that where a director has an interest in a transaction of the condominium corporation he must disclose this interest in writing to the Corporation.
Many people have written to complain about the secrecy of the Board; the unilateral actions of the Board. Like our public governments we get the government we deserve. Therefore you must be RESPONSIBLE. When it is time for election of the Board ensure you know the people running, their record and if not run yourself or put a group together to run for office.
Ok, you have bought a condo and everything looks good when suddenly the Board passes Rules you believe to be oppressive and contrary to the original Declaration There are ways to call the Board to order. S.46(1) of the Act allows owners representing 15% of the Units requisition a meeting to deal with issues and this may include the removal of a director for cause. The meeting to be called is a meeting of owners and not a Board meeting. This will give the opportunity to deal with the issues in public in front of everyone and get the consensus of what is really needed. A director can be removed if more than 50% votes that way.
I recently had an owner tell me the Board denied him access to the books of the corporation. S.55 (3) states “Upon receiving a written request and reasonable notice, the corporation shall permit an owner, a purchaser or a mortgagee of a unit or an agent of one of them duly authorized in writing, to examine the records of the corporation, except those records described in subsection (4), at a reasonable time for all purposes reasonably related to the purposes of this Act.” S.4 only relates to employees info, specific unit info and litigation or insurance claim related matters. So in the case of the Board denying access they are in breach of the Act and may become personally liable thereunder. It strikes me anyone trying to hide things should be investigated.
If you have concerns put a group together and write to the corporation solicitors. They are responsible to the corporation not the Board and if they fail to help hire someone like us for advice and when the next election comes CLEAN THE HOUSE.