Should I Get Involved as a Condominium Director?

From time to time we have condominium owners asking if they should get involved in the decision making and operation of the Condominium Corporation. In our experience the Condominium Corporation works best when there is an active interest by all members.

The Condominium Act requires that there be at least three (3) Directors on the Corporation’s Board. Your Corporation’s By-Laws may specify that there are to be more than three (3) Directors. The owners electing the Directors do not determine which person will hold which position on the Board (ie. who is President, Treasurer, etc.) the elected individuals decide who will hold that position.

Directors may be elected for terms of up to three (3) years and may run for re-election. As elected representatives of the owners, the Board takes responsibility for managing the Condominium property and its business affairs. The Condominium Act requires that at least a majority of Directors be present for the Board to transact business. Board meetings are generally held on the pre-arranged basis, usually monthly.

Every Board has certain duties which are specified in the Act. The Board must ensure that the Corporation’s monies are held in trust and properly invested, keep records as required by the Act, and ensure that they are available for inspection. In addition, the Board is responsible for enforcing the provisions of the Act, the Declaration, the By-Laws and the Rules.

The Declaration and By-Laws of the Corporation elaborate on the duties of the Board. In general, the Directors are responsible for the upkeep and maintenance of the property and other business matters, usually by supervising the actions of the Property Manager.

Directors also have other specific powers as elected representatives of the Condominium Corporation. They can hire personnel either individuals or management companies to maintain the Common Elements. They can enter into legal contracts and, with the consent of a percentage of unit owners specified in the Act acquire additional property or sell existing property.

Since the Treasurer and the Board of Directors have ultimate responsibility for the business affairs of the Corporation, no management company should be given a free hand with expenditures and it should be reporting regularly on all financial matters. The Treasurer and/or one other board member should be required to co-sign any cheques made out by the property manager.

To avoid potential personal liability, the Act says that Directors should seek out and rely on the advice of professionals whose expertise applies to the issues being considered. For example, if the Board of Directors consults the Corporation’s Accountants on a financial issue or lawyer on a legal issue, and makes a decision based on that professionals advice and the decision results in a loss, the Board members will be protected from personal liability. If however board members do not seek the necessary professional advice and make a decision which results in a loss to the Corporation, they may not be protected from personal liability, as they may not have met the standard of care imposed upon them by the Act.

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