Understanding Board Member Duties: When Condo Boards Fail
February 26, 2021
Boards of directors for condominium corporations are typically comprised of volunteers. Depending on the eligibility requirements in the corporation’s bylaws, these are more often than not members of the corporation, that is, unit owners. For residential condominiums, this means that the directors are also often lay people, with no particular specialized skills or professional knowledge. Most board members I’ve met are certainly not well-versed in the nuances and intricacies of condominium law, and many have little to no appreciable background in building maintenance, or even accounting. As a result, many condo boards tend to rely on experts, such as property managers and engineers, to provide them with advice and guidance when problems arise.
As the board of directors is the directing mind of the condo corporation, endowed with all the corporation’s legal powers and duties and tasked with making all its decisions, the board is also legally responsible for all the actions it takes, including those of its employees and volunteers. Because of this ability to control the affairs of the corporation and affect its interests, board members are also fiduciaries to the corporations they serve.
The duties of a fiduciary to a beneficiary (the condo corporation, and by extension, the individual members or unit owners thereof) are broad. In Alberta, these duties are codified by the Condominium Property Act. The Act provides that board members shall act honestly and in good faith, with a view to the best interests of the condominium corporation, while exercising the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances (see section 28). Generally, so long as the members of the board act in accordance with this statutory standard, they will generally not attract any personal liability for their conduct even where it may have an adverse effect on an interested party such as an individual unit owner. However, a recent decision by the Alberta Court of Queen’s Bench confirms that acting honestly and in good faith is not a complete answer when a claim of improper conduct is brought against the condominium corporation itself.
In Lauder v The Owners: Condominium Plan No. 932 1565, 2021 ABQB 145, a ground-floor unit owner in an apartment-style condominium had been living with severely leaky windows for several years. Initially, the board was responsive to the owner’s concerns and attempted to perform some minimal repairs. Thereafter, unfortunately, communications broke down, and the board, operating under the (in my view, unreasonable) belief that its repairs were effective, declined further investigation despite continued complaints received from the unit owner that the leaking windows had not yet been fixed.
There is a section of the Act (section 67) known as sort of an “all-terrain” vehicle that provides relief for interested parties such as unit owners. This section may apply to various situations involving different conduct by a variety of listed actors, and because of this, I often refer to it as simply “the improper conduct section”, as that is the catch-all phrase used in the Act. in particular, section 67 may apply when a board of directors has exercised its powers and duties in a manner that is oppressive, or unfairly prejudicial to or that unfairly disregards the interests of a unit owner. This is the specific subsection was relied upon by the owner in the Lauder decision.
The Court concluded that while the board of directors had not been deliberately prejudicial in its dealings with the unit owner, the conduct of the board nonetheless had the effect of being oppressive to that owner. The board’s failure to respond to or properly investigate the unit owner’s concerns in a timely fashion (which turned out to be legitimate), coupled with a failure to take seriously the owner’s complaints of a potentially dangerous problem involving the building envelope (which turned out to be a rather large construction deficiency in the common property), constituted conduct that unfairly disregarded the owner’s reasonable, legitimately-held interests.
There was evidence that the board may have misunderstood the corporation’s legal obligations, perhaps as a result of being misinformed by its agents, including the property manager. The Court acknowledged that it is possible to misunderstand one’s duties without acting in bad faith and while still acting honestly with a view to the best interests of the corporation. But the fact that the board members were acting in good faith, and had been relying on advice from purported experts, such as the property manager (which advice was incorrect), is not a complete answer. Ultimately, this did not shield the corporation from being found liable to the unit owner.
The Court ordered the corporation to complete the final window replacement in the owner’s unit (recommended by the corporation’s engineer three years earlier), and perform all necessary repairs and/or replacements of any other windows that continued to leak. The corporation was also directed to repair all interior damage to the unit caused by the leaking windows. The entirety of these repairs are to be completed within a fixed period of time. This direction by the Court was not surprising, as it is in line with the general duty of condominium corporations to maintain and keep the common property in a state of good and serviceable repair.
The Court further points out that this duty necessitates more than simply preserving a state that could be deficient or maintaining the status quo, especially if it might pose a danger to the health and safety of occupants. The corporation’s duty to maintain the common property actually extends to an obligation to correct deficiencies, or at the very least, to investigate and bring the conclusions to a meeting of the owners. In the Lauder case, not only did the board fail to investigate until the owner engaged legal counsel, 3 to 5 years after first reporting the leaks, but it actually prohibited the unit owner from raising the issue of the leaking windows at an Annual General Meeting where it could be discussed by all the members of the corporation.
The real surprise in this case was that the Court also ordered the condominium corporation to pay general damages to the unit owner, in the amount of $5,000. This was determined to be appropriate compensation for the inconvenience and stress that the owner had suffered as a result of the extreme delays by the board in effecting the necessary investigation and repairs to her unit, among other things (such as entering the unit without permission, and improperly suggesting the owner was responsible for interior repairs to the unit for damage caused by the leaking windows, etc.)
All of this highlights the importance of board members informing themselves as to their own legal powers and duties as well as the obligations of the corporation as a whole. Condo boards are tasked with making all kinds of decisions on behalf of the corporation and this necessarily involves having some understanding the content and limits of their duties and authority. Effective decision-making must be informed, and decisions must at all times be made in accordance with the policies and bylaws of the corporation, and within the scope of the law. Board members need to familiarize themselves with the Act and the bylaws, and cannot simply rely on a manager who may or may not be providing them with accurate information and advice.
Serving on a board means embracing a philosophy of proactive involvement. The following are some tips for board members and condo unit owners who may be considering a position on the board of their condominium corporation:
- Regularly review and familiarize yourself with and the Act and Regulations, as well as the corporation’s foundational documents, such as the plans, bylaws, and any rules or policies approved by the board.
- Develop and implement proper policies and practices for board members, including codes of conduct, confidentiality, human rights, occupational health and safety, and privacy.
- Understand the corporation’s contractual obligations and ensure that the board approves contracts via a board resolution passed at a properly convened board meeting after an informed discussion recorded in the minutes.
- Maintain careful, complete minutes of all meetings of the board and the corporation, and keep the minutes in a secure location.
- Distinguish carefully between roles, where the role of a board member may overlap with another role as a service provider for the corporation, and know where to draw the line and declare potential conflicts of interest.
- Stay informed by reading minutes, agendas and supporting materials, attend meetings regularly, and arrive prepared for meetings ready to vote on issues. Dissenting or abstaining on a vote may not be a complete defence to potential liability, so include reasons in the record of the meeting (the minutes).
- Fiscal Responsibility and sound financial management does not mean keeping monthly condo fees artificially low by deferring needed maintenance, repairs and replacements. A wait-and-see or self-help approach that avoids investigating and making proper repairs is not always in the best interest of the corporation simply because it might save money in the short-term. This only ever results in large, unexpected special levies to pay for such repairs, which are almost always more expensive because of having been deferred.
- Listen to unit owners and consider their interests when making decisions that affect them. At all times, deal fairly and consistently with unit owners. Don’t be accused of “hearing without listing”.
- Don’t focus overly on consensus-building at the board level. The board’s job is to make decisions on behalf of the corporation, and board members should not feel forced to vote so that decisions are unanimous, or feel held hostage by one or two members who do not agree with the majority. Conversely, once a decision is made, the board should speak with one voice.
Board member service is not for everyone, and can often be a stressful, thankless position. And as the Lauder case shows, even when members are generally discharging their duties of good faith and acting with a view to what they honestly believe is in the best interest of the corporation, decisions by otherwise well-meaning boards can still create liability for the condominium corporation. That said, having a proper and thorough understanding of the roles and duties of board members can make serving on a condo board significantly easier and more satisfying. Learning to recognize and avoid the kinds of decision-making that may trigger liability for the corporation or for the board, such as that demonstrated in the Lauder case, will go a long way toward providing greater protection for both.
If you have questions about the conduct of your board of directors, or questions about this case, please contact a member of our Condominium Group.
Thanks for this blog, Erin.
A somewhat related question: I’ve recently been told the new Condo Act allows for an owner with an active lawsuit against the condo corporation (and past Board members) to be elected to the Board of Directors, even though the corporation’s current bylaws do not permit this. I realize the Act always (or almost always) overrides bylaws but I can’t see in the new Condo Act any mention of a plaintiff being able to be elected to or sit on the Board of a condo they’re suing.
I am not aware of any provision in the Condominium Property Act or Regulations, old or new, that expressly make unit owners who are engaged in active litigation against their condo corporations either eligible or ineligible to serve on the board of directors. The one provision that could be invoked in such circumstances is section 28(3). This section only states that a board member who has a material interest in any agreement, arrangement or transaction to which the corporation is or may become a party, shall not vote in respect of that matter and shall not be counted for quorum when such a vote is taken. In my view, however, this section cannot be extended as meaning that person is ineligible for service on the board, or as requiring that board member to resign. That being said, the specific bylaws of the corporation may contain particular eligibility requirements, which, as long as they do not conflict with the legislation, could apply to make such owners ineligible for election to the board.
While to my knowledge there are no express legislative provisions that restrict board member eligibility in such circumstances, it’s not very practical for someone with an active lawsuit against the corporation to continue serving on the board. In these situations, it would be best for that member to resign. The board is the directing mind of the corporation, endowed with all its legal powers and duties, and must make all decisions on its behalf. From an administrative standpoint, having a board member engaged in litigation against the corporation makes conducting the business of the corporation extremely difficult. Convening meetings and recording minutes, for example, must be done very carefully, as that member would need to be excused whenever the board discusses and votes on issues related to the lawsuit, particularly during times when information and advice given to the corporation by its legal counsel is being considered by the board. The corporation, through the board, is entitled to assert privilege over such discussions, and that cannot be respected very easily where a party adverse in interest to the corporation is also a member of the board.
Thanks for your opinion on this, Erin. Very helpful.
Is a board playing in dangerous territory when it engages in labelling emails as junk mail, blacklisting correspondence and stonewalling? A property manager introduced the practice and the board condones it.
Potentially, especially given the finding of the Court in the Lauder decision that where the Board is refusing to listen to unit owners, it may be committing improper conduct. The facts of each particular case would need to be considered, however. I would recommend consulting legal counsel for advice in such circumstances.
How do we remove Board members? Our Bylaws provide removal for insolvency, unsound mind, indictable offence. Alberta Condo Act “28(2) A corporation may by ordinary resolution remove a member of the board before the expiration of the member’s term of office” Does this mean I need to organize the owners to convene a meeting to vote for their removal?
We have 2 new members, whose personal attacks and vitriol have rendered the Board useless. It feels like we’re being held hostage, simply because the Act assumes people will act in good faith. A lawsuit is not a timely response to the day to day operation of a corporation.
In general, Board members are elected to one year terms that expire at each AGM. If owners want to remove members before the expiry of their term, they must usually petition for requisitioning a special general meeting for that purpose. This can be done by preparing a petition clearly stating the purpose of the meeting and obtaining signatures from unit owners who collectively represent at least 1,500 unit factors (15% of the corporation’s total 10,000). On receipt of such a petition, the current Board is required to convene a special general meeting within thirty (30) days. Alternatively, if your corporation is due for an AGM and you know that one will be convened soon, you could simply prepare for that by organizing other owners to nominate you or themselves for positions to the Board in order to force an election. A motion can also be made at the AGM for the removal of Board members whose terms are not expiring (e.g. if they were elected to serve a two year term and only one year has passed). Court action should (almost always) be a last resort, but it is possible to obtain a court order for this kind of issue in a timely fashion.
Hi Erin,
Can you please clarify a few things regarding the removal of board members at an AGM?
Our bylaws state “The owners may, by way of SPECIAL resolution at a general meeting, remove any member of the Board before his term expires”
BUT the Act says “A corporation may by ORDINARY resolution remove a member of the board before the expiration of the member’s term of office and appoint another individual in the member’s place to hold that office for the remainder of the term”
… in this instance, does the Act prevail? If our bylaws say a special resolution is required, but the Act says an ordinary resolution is required, can we actually challenge our bylaws at the AGM by stating that the Act prevails?
Also, if we were to make a motion at our upcoming AGM, how do we do this? Do we just put up our hand and request a “motion to remove board members”? Or do we need it in writing as well? If so, is there any legal format that is required? Do we also need to list the reasons for the removal? Or can we simply make a motion, 2nd the motion and then vote for new members? (although we have plenty of very legit reasons, we just want to know the exact correct procedure so they can not deny us our rights as owners)? Thank you so much for your help on this confusing matter.
I would suggest that you consult a lawyer to provide you with legal advice specific to your situation. Where there is a conflict between the Act and the corporation’s bylaws, the Act prevails.
Dear Erin, a collapsed storm line for 15 years, causing cracks in basement floor and adjoining walls. Reported in 2010, told this was normal. I paid for a camera scope 2019 and discovered as I knew in 2010, that water had been slowly washing my yard away. Paid $2100 to Miller Thomson and got nowhere. Do I just cover up the cracked walls and call it a day. Never mention it when I sell. What do you think? After paying fees for 25 years, two loans worth half a million I feel robbed, cheated and insulted that all my efforts were ignored.
Your options will depend primarily on the cause of the issue, and whether or not it is a responsibility of the corporation under your bylaws. Covering up cracks in the foundation and failing to mention the problem when you attempt to sell your unit is not advisable, as this could action constitute concealment of a material latent defect. The concern is that cracking in the foundation could be eroding the structural integrity of the building, rendering the unit unsafe or uninhabitable. You may want to engage an engineer to review the problem and provide you with a report that you can then present to the Board of Directors. In some cases, the costs to engage an expert for assistance to identify a cause and recommend a plan for repair can be recoverable from the condominium corporation. Again, this will depend heavily on the allocation of responsibilities under the bylaws and the type of condominium property.
“This can be done by preparing a petition clearly stating the purpose of the meeting and obtaining signatures from unit owners who collectively represent at least 1,500 unit factors (15% of the corporation’s total 10,000).”
Hi Erin,
Could you explain the meaning of “unit factors”
I have been trying to research the meaning myself but am still confused as to what it really means to me as a condo unit owner.
my unit is 818 square feet in a condo building containing 29 units in all, if that helps.
Please excuse my naivete as I am new to the condo game.
Also, does a board member who owns multiple suites have multiple votes as well?
Thank you in advance for this blog and your most valuable insight
Truly,
Wayne J Cook
“Unit Factor” is a defined term in Alberta’s Condominium Property Act. It refers to the factor assigned to each unit in a particular corporation, out of 10,000 total units for each condominium corporation (regardless of how many units there are, the total number is the same – 10,000). They are usually apportioned based on the size of the unit (square footage) relative to the total square footage for all the units, but sometimes a developer may divide the unit factors equally between the units, or on some other basis. The unit factor determines a unit’s proportionate liability for condominium fee assessments and special levies, and also correlates with how much weight a vote for that unit will have for special resolutions (e.g. to change the bylaws) and ordinary resolutions in writing. To find out your unit factor, you can look on a copy of your condominium plan (registered with the Land Titles Office), or look on your certificate of title.
Voting is a little more complicated, and your specific bylaws may need to be consulted for questions relating to votes by Board members, depending on the type of vote. I encourage you to obtain legal advice if you need assistance specific to your situation.
Can a bylaw state a different value other than 15% of unit factors to call a SGM? Mine states 2500 unit factors.
Bylaws can and often do provide different unit factor thresholds for special general meetings (previous called “extraordinary” meetings). However where the bylaws specify a threshold that differs with the Act and it is not possible to comply with both, a conflict would result. In the event of a conflict between the Act and a corporation’s bylaws, the Act prevails.
Our bylaws state 2500 unit factors and were last updated in 2009. So this means that the 1500 unit factors would prevail?
Our pre-2020 ByLaws contain a “we are not responsible for damage to personal property” bylaw. Has any Court ruled on its validity since the new CPA? It would seem to be in conflict with the new Act.
To my knowledge, there has not been any judicial consideration of this type of bylaw provision, nor am I aware of any particular sections in the Condominium Property Act or Regulations that would be in conflict with such a provision. That is not to say, however, that such a provision would be upheld if challenged. While the bylaws are binding on the corporation, the owners and anyone in possession of a unit as if “signed and sealed”, arguably an owner would still have the ability to claim against the corporation for damage to personal property caused by the negligence or willful misconduct of the corporation or its agents. The burden would be upon the owner to prove the elements of the negligence or other misconduct that caused the damage.
Thanks. I have read your post regarding Sec. 34.1(1) as of Nov./20. The potential conflict seems to be with Sec. 67 wherein oppressive actions by a Condo Corp. can be deemed to be improper. Given the legal rights associated with ownership of personal property, any right “to damage without responsibility” provided to the Corp. in the By-Laws would seem to be in direct conflict. I am afraid that the Board will not realize that the current By-Law does not really offer much protection from liability but will depend on it.
Alleging a conflict with section 67 would be novel, but this section (the “improper conduct/oppression” section) would certainly be the section on which one could rely in attempting to resist the application of such a bylaw.
We have a board that is being ruled by a bully. He has implemented policies which do not meet the current Act, the most disturbing is stating that owners are responsible for weeding and watering the common property. Our bylaws clearly state and our plan clearly shows that the common property is the condo corps responsibility. The latest threat from the board is if we do not water the corp will charge the owner for watering at a minimum $250.00. I have notified the board twice via email that is policy is null and void, the first time I was responded to from the bully with an email to all owners stating I did not know what I was talking about and questioned my character. The second time there has been no response. I would like to confirm I am correct and also what are my options?
Dealing with difficult personalities on your condo board is challenging. You may want to consider approaching other unit owners to see if there is support for your position, and if so, it might be possible to convene a special general meeting to hold a new board election. On the whole, unfortunately this is a situation that is heavily dependent on the type of corporation at issue, and the provisions of your specific bylaws. These would need to be reviewed in order to provide you with an opinion. I recommend that you obtain legal advice to assist you with determining the correct allocation of responsibilities as between the corporation and the owners, advise you of your options, and perhaps assist you in communicating your position to the Board.
The Board president is trying to cost cut by eliminating contractors and adding those responsibilities to the board members. These are not your typical Board tasks (cleaning, maintenance) and involve at least weekly responsibilities. As a board member who has many priorities that do not allow for much additional time, I look like I am always fighting against these additional jobs and against this president who is more and more becoming a Bully. Who is going to manage the schedules for preventative maintenance, cleaning and all other responsibilities. This is starting to sound very much like the president is trying to save money at the expense of the smooth operating of the complex.
I would be concerned with the potential for a Board member injuring him or herself while performing one of these tasks, as the corporation’s insurance may not provide coverage in the event of a claim. The line between providing a service for the corporation and serving on the Board is easily blurred when directors take on these additional roles, whether they receive remuneration or not. The Board should insist that all its service providers have adequate insurance protection or WCB coverage. Remember, the Board is not controlled by the whims of a single director, but can only act on determinations (properly passed resolutions, at validly convened meetings, whether electronic or otherwise) made by the majority of the directors. Board members are also volunteers, so you do have the option to say no. When in doubt, seek legal advice to confirm your legal rights and duties as a director for your condominium corporation.
I’m an owner of a condominium unit. I’ve never lived there and always had a tenant. A toilet overflowed my unit and flooded it and units below. I’ve never had insurance on the unit, always thought the monthly dues went towards insurance. The property manager has advised that I’m responsible for the 50k deductible. There was some changes Jan 2020 which I should be aware of because they sent letters providing notice of the changes. I’ve never received that notice. The property manager advised my letters were returned. They’ve always had my email address and never notified me using it. Is there a duty on the board or property manager to ensure the owners are made properly aware of changes. If so under what section of the act normally speaks to this.
This is a complicated issue for which I recommend you seek legal advice. Generally speaking, the responsibility of insuring individual units within a building falls to the corporation, however legislative amendments in January 2020 allow the corporation to chargeback and/or otherwise recover up the amount of the corporation’s insurance deductible (to a maximum of $50,000) for insured losses that originate within an owner’s unit (with some exceptions). You will need a lawyer to review your corporation’s bylaws and documentation relating to the loss to assist you in determining whether or not you are responsible for this charge. Best practice: ensure you carry liability and loss assessment insurance for your unit, which could protect you from deductible chargebacks such as this.
Hi Erin.
Should a Board Member recuse themselves from discussions and debates within Board meetings when they have already indicated they will not vote on the matter due to a conflict of interest. It seems to me, that the board member in question could influence the vote and decision by simply participating in the discussion. I believe a “reasonable person” would not take part in the discussions at all if they acknowledge that they are in a conflict of interest when it comes to voting. Influencing the discussion in this case does not seem to be acting in good faith at all and is putting her own self-interests ahead of the Condo Association. Any thoughts on this scenario? Thank you.
While Board members are not permitted to vote on resolutions or be counted for quorum during meetings where resolutions are made in which that member has a material interest, there is nothing in Alberta’s legislation that requires that member recuse themselves from discussion or that permits the Board to exclude the member from the discussion. Condominiums are inherently democratic, and in my view the Board is obligated to hear and take different perspectives into account when making decisions. Ultimately, while the Board must act in what it decides to be the best interests of the corporation as a whole, sometimes this requires it to consider the effect of its decisions upon minority owners, who may be oppressed or unfairly prejudiced. In general, recusing oneself is a decision that should be made by the individual Board member. The only requirements are that they declare their material interest in advance and refrain from voting/being counted for quorum.
Hi Erin
A neighbour in my condo complex is very distressed by her view having become now almost entirely blocked by a tree growing in front of her balcony. Her unit faces north and gets very little light in winter. The trees were small and beautiful when she bought her unit but now that matured are a nuisance. She has written nicely to the Board on several occasions expressing her concerns and asking for the tree to be removed. The Board president advises the majority of the owners he has consulted with (he doesn’t say how many or who they are) have concluded that no trees Should be removed and he advises her to sell her unit and buy a different one. She is elderly and distressed and this is impacting her health. What can she do?
Unfortunately this question is requesting legal advice specific to a particular condo corporation and situation. This forum is for providing general legal information only. I suggest that you encourage your neighbour to seek and obtain legal advice. She will likely be required to pay for a legal opinion as to her rights and options. Generally speaking however, the Board is endowed with all the powers and duties of the condominium corporation, chief among these are control, management and administration of the common property. If the tree is on common property, then this decision most likely falls within the Board’s exclusive domain.
Hello, can a board member give a proxy to another board member for use at a board meeting?
We bought a strata condo unit in October of 2020 and have not really paid any attention to the board or management company until recently. Since there has not been an AGM since 2019, I was trying to look up the minutes of the board to find out what was happening in our complex. I only have access to board meeting from 2016 till December 2020 when meeting ceased. It has been mention that they were aware the Condo Act changed but nothing about changing of any bylaws that were in conflict. The December 2020 meeting was virtual and they were postponing the AGM because of covid but nothing was mentioned of the Condo Act saying that meetings will resume and that virtual meeting were allowed along with electronic voting. Whether they were not told or are just happy to allow the Manger to run the show, I’m not sure. Through the minutes the board ” has decided to change the year end” no motions or votes. The AGM was originally in January, they changed it to June, the last one was November 2019. They have had a board meeting in Feb and December of 2020. That’s it. My question is where should we go from here, we have had audited financial delivered but apparently no meetings to approve them. The Management Company seems to be in control or a combination with a few board members but nothing transparent, and I am not good with that. So many more issues but anything you can tell me would be greatly appreciated.
Since you mention the term “strata” I have to wonder if this condominium is in Alberta or not, as that term refers to something very different in Alberta. Without constituting legal advice, and if this condo is in Alberta, your best course of action would seem to be trying to compel the Board to convene an AGM or petitioning your fellow unit owners to convene an SGM to review the irregularities you’ve described. You may need to obtain legal advice to assist you in this regard, but the process and requirements for both are set out under the Condominium Property Act, available for free electronically on Queen’s Printer and canlii.org.
What happens if the term of the board members decide to retire at the end of their term and no residents are willing to take there place (does the property management company take over all operations!!)
If all offices on the board were to become vacant for any reason, it is incumbent upon last vacating board member to call a general meeting as soon as possible to elect a new board. If the last vacating board member is unable to do so, the property manager or corporation’s lawyer should call the meeting. If, at the meeting, there is no one willing to serve on the board, then an administrator must be appointed. Any owner can apply to court for the appointment of an administrator who can make decisions for the corporation. A condominium corporation must have a board of directors to act and speak on its behalf. Appointment of an administrator is a very costly step, that will ultimately be borne by all the owners whose collective unwillingness to serve on the board brought about that result.
Hi Erin. I am wondering how common it is that a condo board enacts a move in and move out charge. Is this common practice for certain areas or building types?
This a fairly common practice where moving through areas of the common property that may be damaged or utilizing elevators. It should only be done pursuant to a Board rule or policy, however.
Hello
Rather than get a leaky pipe or pipes repaired or replaced, the condo board has put a timer on the boiler system to restrict the flow of hot water. We are able to access “on demand” from 5am-8am and 5pm-8pm. This is not always the case and at other times the water has to run for several minutes to reach a warm temperature. We were never informed about this in any way. I had to contact the management company to find this out.
When condo boards do not act promptly to repair leaks, this can be considered improper conduct. The determination is entirely fact dependent and I would encourage you to seek legal advice relevant to your particular issue.
Does the condos officer liability insurance cover past condo board members? We had a similar situation in your example, the leak is in his unit when he was a board member and promised himself to investigate. He then resigned 2 months after and asked the new board members to investigate. The issue is still there, but we have new board members.
Directors and officers liability insurance does cover acts and omissions of past board members, however it’s unclear whether that insurance would apply in this scenario. I encourage you to seek legal advice on this matter, particularly if the leak is ongoing and has not been addressed.
In a 2 member board with the chairman has an extra vote to cast in case of a tie, how to prevent the board from getting dominated by the chairman? if the chairman easily makes reference to “talk to lawyers” when 2 members cannot agree, what can the other board member do?
This will require legal advice specific to your condominium, necessitating a review of the existing bylaws at issue. A 2-member board is exceedingly rare.
Can a board member share/discuss condo issues with other condo owners? Other board members have said the discussion of any issues would make the condo corp. liable. They have asked the board member to recuse himself form an upcoming board meeting with the owners. Is this legal or right?
Board members owe a duty to the corporation to keep proceedings of Board meetings confidential. That said, the Board needs to be transparent with the owners and properly record its decisions in the minutes of its meetings, and from time to time must discuss issues with other owners in order to receive and relay information and decisions that have been made. It is unclear from your comment whether the duty of confidentiality was breached in this instance, or in what way the corporation may be liable. Among other possible scenarios, the corporation could be held liable if for instance a Board member made a representation to an owner that the Board made a certain decision at a meeting that it did not actually make, and the owner relied upon that representation and suffered damages as a result. This is likely something on which your corporation should seek proper legal advice, including whether the member would be required to abstain from voting at any Board meetings. If the member is an owner or representative of an owner, then it is difficult to envision any circumstances in which he or she would be required to refrain from attending a general meeting of the corporation. Moreover, there are not typically any decisions made by the Board at general meetings of the corporation that would require recusal if the member was in a conflict of interest. This usually only applies to Board meetings.
What recourse does an owner have if the board refuses to follow proper procedures and processes? This has happened on a number of occasions, but our current issue is that two board members resigned following an owner requisitioned meeting. Their resignations were announced to the owners by the Board President and when the remaining two board members sent a notice to Owners requesting those interested in being considered for the board to put forth their names and qualifications, the Board President sent another email saying that the two members who had resigned had rescinded their resignations. This was done without a board vote (which I believe is required under these circumstances) – the Board president alone allowed the previous board members to rescind their resignations.
As an owner who is very concerned about the decisions, conduct and lack of oversight of these board members, my concern is they will continue to fall short in their board duties which will affect both the value of my property and cause us to incur additional fees. Am I able to take legal action against the board and/or the management company?
Depending on where your condo is located, “proper” procedures and processes may differ. Condominiums are governed by provincial legislation specific to each province. In Alberta, a person ceases to be a member of the Board when that person resigns by serving written notice on the corporation. Service includes personal service to any member of the Board, such as the President. Under these circumstances, once a written resignation is served, the only way for that person to once again become a member of the Board would be through re-election. An owner who is concerned about a Board’s failure to follow the applicable legislation, or provisions of the registered documents of a condo corporation (or strata) such as the bylaws, plan or declaration, may have legal recourse. I recommend seeking legal advice particular to your situation and provincial condominium legislation.
If all the board members of a corporation are personally sued for improper conduct, am I correct to assume they would be in a conflict of interest position for anything relating to the lawsuit, including decisions made to retain and instruct counsel with the corporation’s money?
In Alberta, if all Board members of a corporation are sued personally for improper conduct, this would likely engage the corporation’s mandatory insurance coverage for directors errors and omissions (required by the Condominium Property Act and Regulations). The board members would not be represented by a lawyer paid for by the corporation directly or by the corporation’s own legal counsel, but by independent counsel appointed and paid for by the corporation’s insurer, assuming legal defense coverage is applicable (most likely in an improper conduct action alleging a breach of some duty, negligence or oppression). If the corporation was also named as a defendant alongside all the board members in the same action, this could pose significant problems concerning conflict of interest, in that the board members are not permitted to vote on matters concerning the lawsuit, or be counted for quorum in any meeting where the lawsuit is discussed and decisions made. Issues of solicitor-client privilege are also potentially engaged. For these reasons, where all the directors are conflicted in this manner, it may be advisable to convene a special general meeting for the purpose of electing a new board to act and make decisions on behalf of the corporation.
Thanks for sharing your thoughts on this, Erin. It raises a few questions for me. I attended a CCI event back in 2019 on Board best practices, and I specifically recall the session leaders explaining that for improper conduct claims, the insurance would likely deny coverage. This really bothered me and I have tried to get answers from HUB about this, but didn’t get a reply. I’ve read the fine print of our condominium’s insurance policy and noticed they have clauses which void coverage for Directors errors and omissions, where misrepresentations might have been made by the directors signing the application for coverage. This should concern every condo owner in Alberta. Owners need to know if their insurance policies protect them for liability arising out of improper conduct claims. This is especially true where there might be conflicts of interest as you describe, and where board members would be in violation of the CPA if they were to retain and instruct counsel using corporate money in order to respond to a claim. Your insights on this aspect would be appreciated.
An insurer’s coverage decision depends on several factors, including the nature of the claim alleged and the terms of the corporation’s policy. Improper conduct can encompass a range of possible claims. Unfortunately I am unable to provide further information and I recommend that you seek legal advice for your particular situation.
Does a condo board have the power to deny a condo owner approval to proceed with proposed renovations? The renovations do not contravene any building codes, city bylaws or condo building bylaws? Without their approval the city will not grant the building permit. What recourse can be taken?
Generally speaking a condo board does have the authority to deny approval for proposed renovations within a unit if provided for in the bylaws. I suggest you seek legal advice specific to the renovation request, reasons given for the denial (if any) and the particular bylaws at issue.
I am on owner of a unit in a small townhouse complex with 20 units in total. Over 50% of the owners are wishing for the Chairman of the Board to be removed due to significantly being over charged for deck repairs and to bullying other homeowners and another board member. The management company are interpreting our bylaws as requiring a Special Resolution to remove the Chairman even though it just states Resolution. I have read on this blog and also many other sites that a Special Meeting needs to be called and to remove Chairman is done by an Ordinary Resolution. Can you please advise on this?
Removing a member of the board prior to the expiration of his or her term is expressly addressed in the legislation, under section 28.1(2) of the Act: “A corporation may by ordinary resolution remove a member of the board before the expiration of the member’s term of office and appoint another individual in the member’s place to hold that office for the remainder of the term.” If there are provisions in the bylaws that conflict with this section, then the legislation would prevail: 34.1(1) “If there is a conflict between a bylaw and this Act or the regulations, this Act or the regulations, as the case may be, prevail”. You may need legal advice to have the bylaws interpreted in order to determine if there is a conflict.
Thank you for that. It’s pretty clear from our bylaws that there is no conflict it’s just how our management company wants to interpret them.
“Except where the Board consists of all owners, the Corporation may, by resolution at an extraordinary general meeting remove any member of the board”
I am an owner of a unit in Calgary …windows and doors have been replaced at my expense, am I entitled to a receipt from the contractor. Also an assessment was done on each unit can I request a receipt from the property manager from the assessment company as well, since I’m the one paying the bill.
For a list of documents that owners are entitled to request and receive from their condo corporation, see section 20.52 of the Condominium Property Regulation, Alta Reg 168/2000.
I am a member of a 6 unit condo that is relatively new (2 yrs. old) and at an AGM recently held, only 3 members were willing to be nominated to the board – the other 3 were unwilling to consider board nomination due to their time restraints. The biggest challenge has been to try to educate all condo members as to the importance of starting condo fees (operation and reserve funds) – 4 of the 6 members would not agree and in the past two years it has been a nightmare to get members to pay their structural insurance. One condo owner proposed a budget at the AGM to address these issues as well as a proposed reserve fund study report with a monthly condo fee schedule which did not garner any support from 4 of the 6 members even though the total condo fees were modest ($200.00 per month). Although the board – 2 of the 3 members can likely pass the budget and start collecting fees, and force payment, this seems to set the stage for a lot of conflict yet a conciliatory, educating with the facts approach does not appear to be working.
You will need to check your bylaws to ensure that you have a properly constituted Board of Directors with only three (3) members. If you do not have a set of bylaws registered at the Land Titles Office, then the Schedule 4 Bylaws under the Regulations apply, and these establish a Board of anywhere from 3 to 7 members. The Board of Directors alone is responsible for preparing and approving an annual budget and levying monthly condo fee assessments on all the units. Establishing a budget, an operating account and reserve fund (from funds levied on the units at regular intervals), are, among other duties prescribed by the legislation (e.g. insuring the units and common property), not optional. The Board is obliged to follow the legislation and the bylaws and enforce compliance with same by all the unit owners. The Board should consider seeking legal advice to advise and assist with any enforcement proceedings.
This is extremely helpful information. Thank you. I have one further question – with only 3 board members even though bylaws require 4 (no one else was willing to put their name forward at AGM for the board) and if one resigns, bylaws indicate that board members can appoint a new board member to the casual vacancy as long as they meet the same criteria as original members nominated by a unit hold. My question is if there are just two remaining board members left, do both have to unanimously agree on the appt.? I can’t find the answer in either the bylaws, the regulations or the act.
Thanks again in advance.
Erin,
Our condo bylaws are pretty explicit about condominium board responsibilities for managed property and all exterior issues (roofing, siding, eavestroughs, all outside facing doors and windows, etc.) related to our condos are deemed to be the responsibility of the board, while all interior repairs are deemed the responsibility of the unit owner. Some homeowners in our condo complex have had issues related to inadequate insulation in the attic area – possibly due to original construction negligence years ago. Is it a fair assumption that the responsibility for the upgrading of this insulation would be on the unit owner?
Unfortunately that type of question likely requires an examination of not only your condo bylaws but also the registered condominium plan. If the attic space is indeed common property, and/or the bylaws are explicit in making this area the responsibility of the corporation as a whole, then it’s certainly possible. But given that there could be any number of reasons for the issues you’ve described, some form of expert’s report on the cause of the issues would probably also be crucial in helping you assign responsibility for any repairs/upgrades. Depending on the age of the property, I question whether there is a deficiency claim, particularly as a lot of properties have been experiencing attic issues this year due to the extremely cold temperatures. There is also some responsibility on unit owners to help maintain proper humidity levels within their units, utilize bathroom fans, report issues in a timely manner, etc. All in all, you should obtain a legal opinion before forming any conclusions.
Hello Erin,
My condo board recently hired a contractor to carry out snow removal services. The services rendered by this company has been subpar to say the least. This has been on-going since late October 2021. The contractors acknowledged the issue when it was reported by the Condo Board but it has only taken them until today to change the crew and start scraping ice off the sidewalk and driveway.
I felt my complaints fell on deaf ears when I reported this to the Property Manager from the Condo Board. This unit is currently occupied by my tenant so as you would imagine I had an irritated tenant who’s had to shovel and scrape snow on numerous occasions. I recently offered a one-time $150 credit to my tenant for the inconvenience caused and I’ve contacted the Condo Board as I aim to recoup this amount.
The Board said this hasn’t been accounted for in the budget and as a result they won’t be offering me a refund but I feel cheated and ripped off knowing I paid my dues since Oct 2021 till January 2022 and I didn’t get the desired level of service I paid for.
I am considering sending a warning letter to the Corporation and if this isn’t heeded, I intend to pursue a refund by filling a small claim.
What damages can I claim for asides from just the $150 credit?
I’d appreciate your thoughts.
Thank you
This is a request for legal advice and unfortunately cannot be answered in this forum. I suggest you seek a legal opinion. That said, be aware that there is a $100 filing fee for pursuing a claim in Provincial Court. However that court likely does not have jurisdiction as you will be required to allege that the corporation violated its duties to you under the bylaws to remove snow from the property. This type of claim falls under the jurisdiction of the Court of Queen’s Bench, where the filing fee is $250. It seems to me that a claim for $150 would not be worth pursuing.
How do you create a Board for a profitable condo corporation with only 2 owners and one of those owners are not cooperating? There are 7 units in a bay but only 2 owners and they have not done anything since becoming a Corporation in terms of setting up anything (mtce, upkeep etc.) for the property.
An owner can convene a “special general meeting” for the purpose of electing a condo board to take control of the corporation. The Act provides for how this can be done, and how notices must be delivered to unit owners. If the other owners refuse to attend or cooperate, then you may be left with no choice but to pursue some form of legal action and I would suggest you obtain a lawyer to assist you.
Hello Erin:
I am a condo owner who experienced significant water damage to my suite caused by the upstairs suite’s washing machine. I was the one who alerted the owner as he is so hard of hearing he couldn’t hear the massive amount of water gushing from the unit out through the doorway and leaking through my light fixture. He said it’s not his fault his washing machine self started. All the condo manager told me is that she is siding with him, and I am responsible for the upgrades to flooring and bathroom tiling (but I was given no independent proof from an engineer). I also did not have insurance at the time but does this inconvenient fact prevent me from taking court action against the upstairs owner? I would appreciate your view on this.
In general, a condominium corporation is responsible for insuring the individual units from damage caused by sudden water escape from a household appliance. Whether the corporation is responsible for replacing/repairing upgrades to your unit (improvements and betterments) depends upon the particular bylaws of the corporation and any Standard Insurable Unit Description registered with the Land Titles Office. The corporation would be your first source for coverage for this loss in regard to unit damage. In the event the corporation is not required to insure unit improvements and betterments, then you could have a claim against the upstairs unit owner personally. I suggest you seek and obtain legal advice specific to your situation, including a review of your condominium documents. I also recommend all condo unit owners carry a comprehensive owner’s policy which minimally includes coverage for personal belongings, liability and loss assessment (charge backs), and unit improvements and betterments.
Our condo board has not had an AGM since the fall of 2019. They have put out a special resolution for the owners to vote on to change the bylaws. Problem is they put 4 major issues into this one resolution. Vote is only to be in favour or against.
Making the age restriction +55, Insurance, Parkade usage, Cannabis usage
The +55 is definitely something everyone wants approved. I feel they have added the other changes in order to get them approved on the basis that +55 will be passed.
My questions are:
Should 4 majors bylaw changes be put into 1 special resolution?
By not having an AGM is the board legitimate?
Do they still have the power to do a special resolution, their term would have been over fall 2020
In Alberta, condominium Boards of Directors are constituted in accordance with the bylaws of the condominium corporation. What you likely need is a legal opinion specific to your condominium. However there is a section in the legislation that provides that all acts done in good faith by a board are, notwithstanding that it is afterwards discovered that there was some defect in the election or appointment or continuance in office of any member of the board, as valid as if the member had been properly elected or appointed or had properly continued in office. So in general, even if the current Board’s term should have expired (depending on what the bylaws specify), the Act deems the Board’s acts and decisions legitimate. It is also very common to include multiple major bylaw changes in one special resolution.
A group in excess of the 15% required, are about to ask our Board to call a Special Meeting to deal with a dysfunctional Board. A number of questions that we need some direction with include:
If we proceed with acquiring signatures on a petition to hold a meeting or signatures to remove a member must we inform the Board and/or the Management Company ahead of time?
If the Board refused to call an Extraordinary Meeting how do we proceed as condo owners?
Who chairs an Extraordinary Meeting if the resolution to remove the Chair is on the agenda?
Is the Management Company obliged to assist residents in setting up the venue, communication and costs of such a meeting? If not, how is it done? Could they chair a Special Meeting?
Is it best to remove the whole board and start anew?
Could the owners elect a new 6 member board at a Special Meeting or must it be an AGM?
When the President of a Condo Assoc. instructs a Condo Manager to contract work for the Assoc. without the authorization of the Board, is the President liable personally or the Corporation?
Liable to who, and for what amount? The question is a bit vague, and the answer may require legal advice. In general, the terms of your condominium management agreement may need to be reviewed, as well as whether or not there was a Board resolution or discussion of any kind. It is common for management agreements to require that there be a single point of contact on the Board for providing the manager with direction/instruction, usually the president, so it is not unusual or unreasonable for a manager to act on the instruction of one person necessarily. It is also common for management agreements to permit the manager to expend a certain amount of the Corporation’s funds at one time or on a contractual, recurring basis, without requiring prior Board authorization. Whether or not this was an emergency would also need to be considered, among other potentially relevant factors unique to your matter. Depending on the amount involved, you may wish to consult a lawyer for legal advice.
Thanks for your prompt reply Erin. Our President instructed the Manager to remove “unencumbered personal property” from the Exclusive Use Area of a former owner in a non-emergency situation. The items included 3 mature trees, 3 mature shrubs, retaining walls, stepping stones, a fish tank, a sun shade and artificial grass. Her rational was that the trees would damage a fence which was installed by the Assoc. She was not authorized to act solely on behalf of the Assoc. as the Bylaws state that the Manager is to act for the Board and the Assoc. The Manager is allowed to spend only $500 without Board approval and the cost exceeded that amount. The former owner has now sued the Corp. and the Manager jointly for $50,000 in damages to personal property. Normally, does the Condo Insurance cover this type of liability or is the President’s liability not covered by the insurance? What is the likelihood of the Court awarding punitive damages to the former owner? If yes, what is an approximate amount? Additionally, the former owner was responsible for the maintenance in the Exclusive Use Area. Thanks.
Hello Erin.
I recently put my Condominium up for sale in Edmonton, got a Buyer but hit a snag when seeking the financial documents. The most recent such documents available were 2 years old and the Buyers broker insisted in something newer. I have lost this sale but would like to know what I can do to obtain or leverage this essential information?
Thanks Ward
This question references several specific duties of condominium boards. First, the board is required to prepare and provide annual financial statements to all unit owners and to mortgagees who have provided notice of their registered interest. The financial statements are to be prepared in accordance with Canadian generally accepted accounting principles and provided no less than 14 days prior to the day on which each annual general meeting is to be convened, along with an annual report on the reserve fund and an annual budget for the next year. Second, condominium boards are required to provide certain information and documents within ten (10) days of receiving a written request from an owner, purchaser, mortgagee, lawyer or other authorized agent acting on behalf of any of those persons. This includes a request for financial documentation such as annual reports. If the board has not prepared financial statements for over two years, then it has not discharged its duties under the Condominium Property Act. I would question the board and/or property manager as to the reason for this lapse, and ask that if the most recently concluded annual financials are not yet prepared, that the board provide copies of the most recent monthly financials. This may (but is not guaranteed to) satisfy prospective purchasers along with an explanation for the board’s delay.
Hello, we have a condo consisting of 30 units. Our bylaws state we can have min of 3 and a max of 7 people on the board. Can a motion be made at the AGM to reduce the size of the board to 4 members? Would the bylaws need to be changed?
This likely depends on the wording in the bylaws and they would have to be reviewed to provide an answer.
The concierge at my condo in Ontario entered my unit and delivered a package for me without my consent !! I never even advised them I was out of town at my other resident!’ They must have rewound the security footage and saw me drive off and not yet return so decided to enter my unit to give me my package !!!! I am so upset my privacy is being invaded !!!! The building has a room they store packages in if condo owners do not pick them up or do not instruct staff to deliver them !! What can I do ??? I am still away and don’t know how to tell them to stay away from my unit !!!
Unfortunately as your property is located in Ontario, your matter would be subject to Ontario’s condominium and privacy legislation. You may need to consult a lawyer in your area for advice and assistance.
Hi Erin, we sent special meeting request to replace the current Board of Directors to our condo Management company and this is what they replied:- Legal counsel has confirmed that the request for a special general meeting is governed by both s.30.1 of the Act and Bylaws 26 and 28. However, the Corporation’s legal counsel has advised that the proposed ordinary resolution to remove Board members and replace them with specific persons has not been provided in the meeting request as required, pursuant to s. 30.1(3) of the Act and Bylaw 28. What do you suggest ? Thank you
When owners submit a request to the board of directors to convene a special general meeting, the wording of any proposed resolution is not strictly required, but the request must specify what business is to be conducted. Sufficient information is necessary so that the board can include any resolutions in its notice to owners of the date, time and location of the meeting. Best practice would be to prepare the resolution yourself and include this in the request to the board so that there is no confusion.
Hi Erin, Thanks for the general insights. However, where a Board crafts its Bylaws to shield itself from any responsibility especially in regards to common areas. Can a member or Owner apply for the Bylaws to be reviewed or set aside entirely
Condominium bylaws must comply with the Condominium Property Act and Regulations, and to the extent that they are in conflict, may be declared unenforceable, while the provisions of the Act and Regulations will prevail. Many condominiums include provisions in their bylaws that attempt to shield the board and/or the corporation from liability to owners for various claims. Each such bylaw would have to be reviewed and considered on its own to determine whether it would be enforceable, and if so under what circumstances. A recent court case (Dunn v Condo Corp No 042 0105, 2022 ABQB 516) considered such a bylaw and found that it did not protect the corporation from an owner’s claim in nuisance, however leave to appeal on this issue has been granted. There may be an update on this item published on our blog in the coming months.
Hi Erin.
A couple questions.
1. Is there a law in place in AB which prevents property management companies charging exorbitant fees for condo docs? Such as minutes, estoppel certificate? Etc.
2. Is a board required to provide owners with approved board meeting minutes??
Thank you for your time!
Yes, the Condominium Property Regulation establishes maximum fees that a condo corporation or manager can charge when providing prescribed documents: see section 20.52. Condominium boards are also required to provide owners with approved board meeting minutes upon the board (or manager) receiving a written request, as these are listed among the prescribed documents in the Regulation.
Hi Erin, I recently purchased a townhome in a brand new community in Calgary. I found out that the developer has tied in some common utilities to individual owner’s electrical panels without disclosing it. The board is aware of this and has not yet communicated to the other owners that have the same issue. There is a small number of owners including myself that have been paying out of pocket for these common expenses as we are the ones directly billed for this. The board is refusing to go after the developer and are trying to force the owners into contracts by dictating what they think a reasonable compensation is. There is nothing in the bylaw currently that mentions anything in regards to these common expenses besides that all common expenses are a responsibility of the Condo corp. Can a board force these owners to keep the breakers on for these common expenses and is there a way to force the board to actually do the right thing for the community?
There are a variety of approaches to addressing an issue like this, and the board may still be in process of exploring these options. You can try communicating with the board to request what steps are being taken. If you are not satisfied with the steps the board is taking, you may petition other owners to convene a special general meeting at which the issue is discussed and a vote conducted on the approach being taken by the board. As a last resort, you may want to engage legal counsel to provide you with an opinion and assistance in dealing with a non-responsive board of directors, or a board that is ignoring its duties to owners.