What does Board of Directors in a condo do?


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The role and responsibilities of the Board in a condo corporation in the GTA

 If you are considering joining a Board of Directors for a condo corporation in Toronto, there are many nuances to consider before making a commitment. First, understand the role of the board, what its’ members typically do, and their obligations.
All condos have a Board of Directors to manage the property. In order to sit on the board of directors, consider the required qualifications and responsibilities. Let’s take a look at the role that the Board of Directors plays in a condo corporation.

What qualifications are required to sit on a Condo Board of Directors?

Qualifications will vary from condo to condo based on by-laws passed by the board. Qualifications might include members to be:

·        An owner or spouse of an owner

·        Residents of the condo as opposed to just owners

·        Non-employees of the condo corporation

·        Non-relations to other board members

These by-laws are often influenced by the size of the condo, and the number of residents. One of the challenges faced by condos is that there are often many residents who simply rent, but do not own the condo unit. Why is this a challenge? Condo owners that aren’t residents sitting on a board of directors might not be as effective on the board, simply because the decisions will not directly affect them. Whereas a condo resident, living on the property, might seem more invested in all affairs pertaining to his home.

What are the duties of the Board of Directors for a condo?

The board runs the condo corporation, representing the owners. The board’s directive is to ensure the standards of the building management, including every aspect from maintenance of the property to the treatment of staff, are protected. It also keeps everyone honest, without any undue power being given to one particular individual. A good board will ensure the property is effectively maintained so the value of the condos remains at or above their market value.

Boards of Directors’ responsibilities include:

·        Planning and overseeing the fiscal health of the corporation

·        Hiring a management company to manage the day-to-day work[mk3]  and duties

·        Ensuring that the staff is qualified performs their duties and is treated with respect

·        Collecting condo fees from owners

·        Paying invoices

·        Keeping records of management, maintenance, etc.

·        Preparing a budget

·        Awarding contracts through a tendering process

·        Insuring the condo

·        Managing reserve funds

·        Maintaining status certificates

·        Addressing residents’ complaints

·        Meeting the needs and rights of residents

·        Ensuring people live peacefully in accordance with the Condo Act

·        Communicating with residents about condo updates and news

·        Remaining accountable to residents

general a nutshell, the board’s job is to protect the property and its residents.

What happens if the Condo Board is not following the rules of the Condo Act?

If the owners of the condo find the board is failing to enforce or follow rules, they can take legal action to force them to comply. In this case, the condo corporation has the right to charge 100% of any legal fees to the owners who filed the complaint.

What constitutes an effective Condo Board?

An effective Condo Board will ensure the following:

·        Clear communication with owners and residents regarding decisions, problems, and maintenance projects

·        Transparency with its policies

·        Regular information meetings are held

·        Residents’ complaints/concerns/requests are handled in a timely manner

·        Useful suggestions from residents are acted upon

·        Condo rules are enforced

·        All residents and owners are treated equitably

·        All rules are followed

·        Due diligence regarding contracts for repairs, maintenance, and staffing

·        No conflicts of interest for tenders and maintenance service providers

·        Proper management of a condo’s finances, assets, and owners’ monies

In other words, a good Board of Directors will consistently put the interests of the residents, owners, and value of the property first.

How many people sit on a Condo Board of Directors?

While this will vary based on the size of the condo, typically the board consists of three to five members. It is important that there are enough people to allow for a majority vote with a minimum of three directors required at each meeting.

How are Condo Directors elected?

Board vacancies are often first filled with a temporary director who is assigned by the remaining directors. This is done to help maintain the balance for votes until the next annual general meeting. At the next meeting, new directors can voice their interest to be elected.  

Often a special meeting is called so a new director can be elected. Condo resident owners can elect one director for three years. This position is an “owner-occupied position” mainly because many condos are resident heavy, with owners renting out their condo units. Because they do not have a vested interest in the condo itself other than collecting the rent, it is always in the condo boards’ best interest to have a representative for the people who actually live on the property.

Can a Condo Director be fired?

When it comes to existing board members, a director can’t be fired or ejected. This can only happen if a specific by-law exists within the condo to do so. This type of by-law, however, is frowned upon as it can lead to issues if honest board members are faced with a corrupt board. For this reason, only owners can “vote out” directors.

Are there other people involved with the Condo Board?

The board will also include “officers” assigned by the board. A condo corporation has three officers:

1.     President: This person oversees the business and affairs of a condo corporation. They are responsible for developing policies for board approval, communicating with residents and owners, ensuring the declaration and rules are followed and inspiring trust for the management of the board members. They also fill the role of leader for condos that are self-managed

2.     Treasurer: As with any other treasurer, this officer manages the finances of the condo. This includes accurate financial statements, balancing the budget and ensuring there is a reserve fund.

3.     Secretary: This person is the custodian of the condo’s records. They take minutes at meetings, send out notices to residents, etc.

While directors are elected to sit on the Board, officers are appointed by board members.

What happens at Condo board meetings?

Board meetings are usually held monthly with all directors required to attend. Property Managers may also attend to present important information and receive direction. Managers do not necessarily need to attend all meetings. Instead, a decision is made by the board whether or not their presence is required.

These meetings are used to review issues and vote on decisions. Motions (suggestions or requests) are made, must be seconded and then voted upon. The board members each have one vote, and a majority carries. If a board member feels decisions are made without due diligence or in bad faith, their objection or negative vote can be recorded in the minutes.

Minutes from the meetings are then made available for owners to review.

As you can see there is much time and effort required for the Board of Directors in a condo corporation. Careful consideration should be given before voicing your interest in candidacy.
For more information pertaining to condominium management in Toronto or to hire a property management company for your condo corporation in the GTA and surrounding areas, please reach out to anyone on our team at CPO Management Inc. We are a full-service property management company specializing in residential and commercial condominiums. With a full spectrum of services, we cover strategic and financial planning, accounting, building maintenance, and capital improvement, and other operational work.

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