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Linda Palfi
CNC Properties
47033 Creekside, Calgary, Alberta
P: 403-998-7732
F: 403-592-8002
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Who's in charge of my condo corporation?

         

There are times in condominium living when we need to know who’s in charge. An issue might arise that requires a political decision, or a problem arises that requires spending considerable funds which, come to think of it, leads right back to politics. While the property manager employed by the condo corporation administers daily issues, he or she has no deciding authority. It is the condominium’s Board of Directors that must grapple with issues and make tough decisions, just like municipal council does at city hall. The property manager then implements those decisions, as do civic staff at city hall.

           

In fact, condominium law parallels municipal law with a few specific differences. Here in Alberta the elected (or acclaimed; ‘same thing) condo Board of Directors is the governing body of the condominium corporation, chosen at an annual general meeting or—rarely—at a special general meeting of owners. These people—usually three to seven of them---have the duty to make decisions in the best interests of all the owners. They also have considerable authority and discretion in order to get their job done.

           

So the Condo Board is in charge, right? Well, yes….except. Alberta’s Condominium Property Act also specifies that Boards shall take direction from an annual general meeting or a special general meeting of the corporation of all the owners, which can usually be called by owners who are not on the board. As well, a special meeting could also elect a new condo Board, which might reverse decisions made by the previous Board. Such an election or direction, of course, is subject to proper notice having been given to all owners (see your bylaws), while reversing decisions can be hard if contracts have been signed. Some things just can’t be undone. This system allows virtual recall of elected condominium Directors, which is not possible at the municipal level.

           

Also over at city hall the council makes bylaws, while in condominium living the owners must approve bylaw changes with a 75% majority vote, usually done by signing approval sheets, a process that can take months but ensures that owners really agree with the changes.

           

Those are the important differences between condominium governance and city governance, which otherwise are remarkably similar. In short, condo Boards have a large mandate, but can be turned out of office in part or in their entirety, and condo Boards must take reasonable direction from general meetings. Add to that the procedure that condo Boards choose their own table officers, such as their own chair/president, secretary, treasurer and so forth. I wouldn’t want my Mayor chosen that way, but it’s a good and simple system for the smaller world of condominiums.

           

Now comes an obvious question. Does the tail ever wag the dog? Of course! In some condominium corporations the Board is so weak that the property manager ends up running the show. It’s not good, and there’s liability involved for the manager and the management company, but what are you going to do when most owners are absentee landlords, or for some other reason can’t or won’t hold meetings and make decisions? Don’t buy into a condo community being run this way, but appreciate that a few condominium developments would have no leadership at all if the manager didn’t take the reigns.

           

Let’s review a make-believe example of some of the above. Pretend that condominium townhouse development Sleepy Hollow Condos of 100 homes has always had an outdoor pool, and that members of the Board seem to be among the few owners who actually use it. Wearing out after 30 years, the pool requires a $250,000 renovation. Lacking an adequate reserve fund, the Board votes to special assess $2,500 on each home to rebuild the pool, which a majority of owners would rather see closed down.

           

A group of objecting owners circulates a petition to all their neighbours calling for a special general meeting, and serving notice that a single motion will be on the agenda. It reads, “That the Board is directed to cancel the planned special assessment, close the pool permanently, fill it in, and create a modest rock garden.”  The meeting comes to pass, the motion is voted upon, and it passes 93 to 7 (the board members). After the meeting the Board remains in place. It has the same decision-making power as before, but on this issue it can only decide when to close the pool, which contractor to hire to fill it in, and how many cacti to plant.

           

This scenario is fanciful, and reality is usually messier. Yet it shows how the Alberta Condominium Property Act and your bylaws provide checks and balances, should you need them. Democracy; it’s a wonderful thing.

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