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24 March 2016 - 16:47,
by Colin McKay,
in Condo Management, Condominium, Property Management, Comments off
Whether they are in high rise buildings or townhouses, condo ownership is all about community. When we looked at what condominiums are, we talked about how they’re all about property owners coming together and pooling their resources to afford amenities and services they may not be able to on their own. In fact, buying a condo is a little bit like buying a suite inside a large communal ship. This article is all about governance: how condo owners come together to steer their ship.
Specifically, we’re going to talk about the Board of Directors – who they are, how they function, and what this means for owners.
The Board of Directors
Who are they?
The Board of Directors is a volunteer council of unit owners elected by their peers to govern the condominium corporation’s common elements and finances. Typically, the board will hire a property management company like Mareka to guide their decisions and manage the day-to-day operations of the property. Boards of directors hold meetings on a regular basis to discuss important issues such as reviewing finances, setting common element fees, and making repair and upkeep decisions.
It is a reality of condominium governance that board members come with a widely varying background and degree of qualification for the position. Though most often boards are the competent individuals who are interested enough in their investment to ensure it’s proper upkeep and maintain it’s value, sometimes boards don’t act in the best interests of owners. Sometimes, board members feel that they are capable of managing the daily operations of their corporation without needing the guidance of a property management company. This can save money but is very challenging, since such boards require a sound knowledge of budgeting, the details of building maintenance, insurance, and condominium legislation… plus an enormous amount of time on their hands. It also presents obvious challenges in ensuring responsible governance. Perhaps most important, the property manager provides protection with regard to liability, as the Condominium Act of Ontario is very specific that if the board relies on the professional opinion of a property manager in making a decision, they are exempt from any liability that may arise from that decision. We recommend the strong support of an experienced and trustworthy property management company.
How do they function?
Many decisions are made by the board of directors without the need for consulting owners, but not all – it depends on the corporation’s declaration and the legislation of the province you live in. Some matters require an owner vote, and require a minimum percentage of owners to participate for the vote to be valid. As such, it’s your responsibility to look after your property by keeping abreast of the governance of the condominium corporation to which you belong, and to participate in votes and attend annual general meetings and / or Town Hall meetings when required.
Another reason to keep abreast of your condominium’s governance is that the decisions made at board meetings are legally binding upon all unit owners… you can’t opt out! In certain cases 15% of owners can call a requisition meeting to have an owners’ vote if they disagree with the board, but this is only allowable in specific circumstances.
If an important meeting is being held and you can’t attend, however, you might be able to send someone to vote for you, called a “proxy”. You need to sign a document appointing them beforehand, so look into this option if you know you won’t be around for an important meeting and want to make sure your interests are represented.
Want to read more?
It’s important to understand the governance of your condominium, and to keep informed of and participate in the process if you want to ensure your property is a safe, enjoyable, and highly valued place to live. Mareka Properties has a history of success in guiding condominium corporation boards. Contact us to find out more about how we can help.
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