Is your condo board above board? Tips for evaluating condo governance
CBC News
By Solomon Israel
23 May 2017

Condominium governance is in the spotlight after an investigation by CBC Toronto reporters unveiled questionable practices at a series of downtown Toronto buildings.

Owners and property managers in those buildings say a group of people have aggressively sought control of the boards and budgets of multiple condos. The allegations include voting irregularities and contentious contracts.

If you're wondering whether your condo board is operating in a trustworthy manner—or if you simply want to get a better grip on how your condo works—here are a few tips from experts in the field of condo governance.

Learn who runs the place
Not just anyone should sit on the board of directors of a condo corporation, experts say.

"You want people who are financially literate, who have some business experience, preferably," said Audrey Loeb, a lawyer with Miller Thomson who specializes in condo law.

"You don't want the board of directors managing the building, you want the board of directors overseeing the manager."

That property manager should be independent of the board, with a good reputation, Loeb added.

Condo board directors should own a unit in the building, and ideally live in that unit, said Loeb. If not, that's a potential red flag for owners.

Conflicts of interest on condo boards are another red flag, according to Brian Antman, who audits condo boards as a partner with accounting firm Adams and Miles and serves as a director of the Canadian Condominium Institute's Toronto chapter.

Board directors shouldn't have any financial interest in transactions with the property manager or their vendors, Antman said. Directors, he added, should also sign and follow a code of ethics.

Put on your reading glasses
Condo owners ought to take the time to read their building's declaration, said Antman. (A declaration is essentially a condo's charter or constitution.) They should also read any bylaws and rules instituted by the board, according to Antman.

Potential owners of new condo buildings need to read the disclosure statement provided by the developer, and should have it reviewed by a lawyer with experience in condo law, Antman said. (For resale condos, a "status certificate" replaces a disclosure statement.)

"It's probably the most significant purchase they'll ever make, and they shouldn't be surprised by anything going into it," he said. "I see a lot of people who don't do their due diligence up front, and are surprised."

Communicate with the board, and participate
"The best way to tell how well-run your condo is… is to ask for documents, and see if you get them," said Loeb, the condo lawyer.

Minutes of board meetings are a common record that a board should share.

"If you get them in a timely fashion, ask for the monthly financial statements," said Loeb. "Any owner is entitled to see that stuff."

Most condo board meetings are closed, but Loeb said owners should absolutely take the time to attend annual meetings.

If owners can't attend an annual meeting but still want to vote on condo issues by proxy, Loeb recommends electronic proxy voting, by which proxy documents are emailed directly to owners.

If a condo owner is concerned about their condo corporation's board, they can try to shake things up.

​"If they're unhappy with the board, or a board member even, they can requisition a meeting to replace the board or the board member," said Antman.

The owner can even try and join the board themselves, if they feel up to the task.

"This is their biggest investment, and if they want it to be run properly maybe they need to get involved," Antman said.

Be warned, though: sitting on a condo board can be "a hugely time-consuming job, if it's done well," said Loeb.

"People have no clue what hard work it is, especially in the first two years of a condo's life when you're just trying to figure out what's going on," she said.

Make sure professionals are involved
Good condo administration often requires professional expertise, said Antman, an auditor.

"The [condo] corporation should hire a solicitor, an auditor, an engineer who's doing the reserve fund study," he said. "And all of these people that you're hiring should be people that are experienced in the industry."

A solicitor is especially important when things go wrong, said condo lawyer Audrey Loeb, who described how condominiums have become "very complex entities" over the years.

"My philosophy has always been that the condo is the fourth level of government," said Loeb. "After the feds, the province and the city, you've got your condo [corporation]."

Comments from readers
Jay Mann
Condo boards should operate more like municipal councils. All members should be required to be both owners and residents, agendas should be published ahead of time, meetings should be open to all residents to observe, there should be an opportunity for residents not on the board to make presentations, and minutes should be freely available to all residents and prospective purchasers afterwards.

Mariette West
Strata living is a failed social experiment, at least in BC... the best advise is to STAY AWAY.... this CBC article, like so many articles on Strata/Condo living ends the same as all of them, suggesting that you hire a lawyer... at your own expense of course, to fight with your Strata Corp that uses again YOUR money to fight back, plus they have errors and omission insurance for council (board) members and council members are often protected by the insurer even when there is blatant fraud (which they are not supposed to cover) and as is described so well by posters on the Facebook page that is now becoming very popular. (see Strata Theft and Bullying website on FB)

Prattly Ponsarello wary of moving into a condo building where no one wants to be on the board but the building is full of whiners.

Peter Campbell
One thing that was missed in an otherwise good article, is the condo fee. Low fees ($200) means you have a condo running on the warranty and that warranty is good for about 2 years. If so, be ready for a massive hike in maintenance fees. If it is an older condo and still has low fees, really look out for surcharges being slapped on for repair items such as roofs and landscape and especially, under ground parking lots.

The average price I have seen for maintenance fees runs between $600-$800/month. A lot of that depends on the services being offered. No pool or gym or meeting rooms etc, just basic housing that is kept clean and safe will be around $600.00/month.

The big thing is to do the your diligence and I love the part about the paperwork. I had one place look at me like I asked to have sex with their granddaughter in the lobby when I asked for copies of their by-laws and the last years financial records. Guess who didn't move in.

The entire real estate industry from home buyers and sellers, to condo boards through to agents and lenders to oversight agencies needs to be investigated thoroughly. Where there is money to be made, there is often corruption and malfeasance.

Robert Remillard
I live at the Barriefield, a condo in Kingston where the manager hired his brother in law without tender to redo the main floor & party room decoration. The board also gave without tenders: contracts for the replacing of all plumbing lines (over $500K) and balconies repairs (over $300K), despite our corporation having a purchasing policy that requires tenders for anything over $50K.
When I found suspicious transactions for money spent in the suite of an executive, I asked for a meeting with the board. Instead, they hired the lawyers at a cost of over $13K to try to justify the expense of $350, then asked me to pay for those legal fees. I fought them and won.

I have since been made to be the villain through an extensive campaign by the board to isolate me. I could write a book.....

Bob Kindle
Who would want to buy one of these things? It's like buying a headache! I could understand if your only intention was to flip the thing, but to live in one? Dear lord!

Especially in Vancouver, you'll be spending a small fortune to buy a room in a building that you don't technically own. You can be evicted, or worse, you could be saddled with huge bills as a result of poor management. If the cost was what is was 10 years ago, it made sense... Today? At the price these shoe boxes are going for...

Rick James
My first AGM I went to a guy had a couple beer he brought with him. He popped his first when they called the meeting, and I didn't get it. Thought maybe he had a drinking problem...nope, turns out he just brought a brew to the best show in town. Yelling, pointless questions, pettiness, avoiding answers, extreme examples of mismanagement and cluelessness—condo meetings can't be beat for those of you into trash reality TV.

Edward (E) Merij
I was at a condo meeting in Florida a few years ago and a fight broke out. And I mean a fistfight. And who was it between? Two ladies.

Bo Ngan
It is about time the the provincial government should revise the condo act. Condos used to have small numbers of units. Now condos have over 300 units at some downtown locations, Money attracts speculators.

At the last board meeting where election was held at Five Condo the three persons who ran aggressively to be in our condo board claimed they own the same unit but CBC revealed only Mr MacGregor is a registered owner. So they were not truthful and voters had no means to check at the time of voting. I was still appalled how three people in one living unit can run for the board of director position. The proxy votes were never revealed at the meeting.

These were serious flaws. The province should change laws/Condo Act to ensure that owners in each unit should have a bill of rights. Board members should live in the condo and there should be one candidate per unit to be a member of the board. The election of board members is a democratic process and it fair representation and honesty should be the rule.

Bob Winter
Condos are not something I want to be involved with.

top  contents  chapter  previous  next