Condominium corporations

Corporations, whether they be businesses owned by shareholders, privately owned companies, non-profits such as hospitals, charities, animal shelters, trade unions and condominiums need to be governed by directors and they need to hold annual meetings of their owners and/or stakeholders.

These meetings must follow a set of meeting rules. Most condominiums use Nathan's Company Minutes. It is a wise choice as Nathan's rules have all been tested in the courts.

The only issue is that condo owners, and most directors, don't know the rules that must be followed when conducting owners and board meetings.

Failure to follow the "rules" can result in all sorts of legal problems including judgments against the corporation and the individual directors.

Common interest
This means that all unit owners own a portion of all the common elements as set out in the declaration.

Personal liability
The unit owners are responsible for the corporation's liabilities equal to the percentage set out for their unit or units in the declaration. There is no limit to the unit owner's liability.

So if you buy $300,000 of shares in a company, say Nortel, the most you can lose—and many did—is $300,000. However, if worse comes to worse your purchase of a $300,000 condo can drive you into personal bankruptcy.

Declaration
The declaration is the incorporating document and is the equivalent to the articles of incorporation of a business corporation.

By-laws
The board can pass by-laws that are reasonable and are consistent with the Act and the declaration. However, the owners of a majority of the units, must pass all by-laws and amendments to the by-laws and the by-laws must be registered with the land registry office.

Rules
The rules are a set of obligations relating to the use of the common elements and the units. They promote safety, security and the welfare of the employees, owners, residents, their guests and the corporation's employees and contractors and protect the assets of the corporation.

Rules cannot be arbitrary or discriminatory.

Budget
Before the start of each fiscal year, management's and the board will prepare a budget for the upcoming year. The unit owners will be then notified of the estimated expenses and informed of the amount of their monthly fees for the upcoming year.

Compliance
If the board fails to enforce the declaration, by-laws or rules, an individual owner, or a group of owners, may apply to Superior Court for an order to compel enforcement.

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