A. No. The management company cannot replace the board and cannot make substantive decisions. Nothing of significance can be done. Contracts cannot be entered into and steps cannot be taken to enforce payment of common expense contributions.
It is unlikely that a responsible management company will remain if there is no board, especially if cheques in payment of its management fees must be signed by one or more of the directors.
It should be pointed out to the owners that, without a board, the value of their units will plummet. As the functioning of the condominium grinds to a halt and the building deteriorates, one or more owners, or perhaps a unit mortgagee, will find it necessary to make a court application for the appointment of an administrator in accordance with the Condominium Act to carry out the functions of the board.
The administrator’s fees and expenses will be payable by the corporation and will be part of each owner’s common expense contributions.
Q. One of our directors made derogatory comments about other directors at a board meeting attended by all of the directors.
The board member now maintains that there should be no minutes of the meeting setting out those remarks, as the meeting was not properly constituted because the 10 days notice of the meeting was not given. Is he correct?
A. The Condominium Act provides that a director who attends a meeting shall be deemed to have waived the right to object to a failure to give the required notice, unless the director expressly objects to the failure at the meeting.
Q. I have requested an examination and copies of certain board records. Management has advised that I will be charged $1 per page. Is that proper?
A. The Condominium Act provides that a corporation will provide copies of records to a person examining them, if the person requests copies and pays a reasonable fee for labour and copying charges.
The fee is only for copying and may not be charged for the assembling of the records for examination by an owner. A fee of 25 cents per page might be considered reasonable.
Q. The president of our condo did not stand for re-election to the board at our annual meeting but has continued to act as president. Is that legal?
A. No. The president must be a director.
Q. Is it a good idea to limit the number of terms a director may serve in order to prevent the president from becoming too close to professionals serving the condominium, such as its law firm or property management company?
A. There are disadvantages in passing a bylaw limiting the number of terms a director may serve.
It is sometimes difficult to find the required number of people prepared to serve on the board, and strong directors who have served the corporation well will be lost.
If the concern relates to the president, a bylaw could limit the number of consecutive years a person may hold that office, without prohibiting the person from being elected for further terms as a director.
The board may replace the president with another director without affecting the former president’s status as a director. I believe that few corporations have chosen to limit the number of terms a director may serve.
Lawyer Gerry Hyman is an expert in condominium law. Send questions to firstname.lastname@example.org or fax to his attention at 416-925-8492. Letter volume prevents individual replies.
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
467 Speers Road, Oakville, ON L6K 3S4