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Friday , 19 September 2014
Condo board bore heavy cost of thwarting owners’ will

Condo board bore heavy cost of thwarting owners’ will

When condo owners put themselves forward for election to their community’s board of directors, they are probably motivated, at least in part, by a genuine desire to ensure that the rules and regulations of the community are upheld and enforced fairly, for the good of the community at large. That is the primary function of a board: to manage the affairs of the condo corporation and make sure it carries out its obligations. Given that most of us are more likely to take the attitude that “someone else will take care of it,” we are fortunate that in any given community there always seem to be a few who relish taking on the responsibilities and duties that come with being on a board.

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A condo board that tried to thwart the wishes of the owners took legal action, but the strategy backfired and the board had to pay more than $36,000 in costs.

But boards of directors, it turns out, are the source of more complaints by condo owners than any other. The Condo Information Centre says that 63 per cent of the letters it receives are about problems caused by boards. What seems to happen all too often is that an adversarial attitude develops between the board and the condo owners, a “we-they” way of seeing things. Boards are often accused by owners of being remote, secretive, high-handed, condescending, autocratic. They adopt the attitude that they know best what’s good for you and you’d better just accept it. Then there’s the natural instinct to protect one’s turf and hang on to whatever power and privilege one has acquired. All of these can and usually do add up to conflict.

Like the board at one London, Ontario condo that found itself at odds with the condo owners over a repair bill of three-quarters of a million dollars to prevent water leaking into the building. It would have meant a special assessment of $5,665 for one-bedroom units and $8,195 for two-bedroom units. The owners were understandably reluctant to accept this burden, and they defeated the motion at a general meeting.

Democracy means simply the bludgeoning of the people by the people for the people.

Oscar Wilde

But in a spasm of self-preservation, the board then ended the meeting before the owners could vote on a subsequent motion to remove the board from office. Rather than submit to the will of the community it was elected to serve, the board turned to the courts. It sought a court appointed administrator to manage the building, and attempted to get an injunction preventing the owners from holding another meeting.

Both of these requests were denied in court. The judge saw through the board’s motives in seeking the injunction, which were simply to prevent the owners from exercising their rights. The judge did not accept what the board stated in its application, that “a small group of owners is frustrating the work of the board.” The board also alleged that without them , the building would fall apart, residents’ safety would be jeopardized, and relations among the owners would deteriorate further. The judge bought none of it, and the application was described as “without merit.” He ordered the board to pay $15,000 in costs.

Regarding the application for a court-appointed administrator to take over the running of the building, that too was turned down. The judge in this case ruled that such an appointment should be a “last resort,” adding that good reason must be shown when such an extraordinary measure is taken. “Self-governance is the norm; administrators are the exception.”

Calling the board’s actions “deliberate and egregious,” the judge ruled that the board members’ behaviour required sanctions. “If there is confusion,” he wrote, “it is caused by the board’s immovable positions. . . their determination to thwart those opposed to their view of what needed to be done.”

He ordered that they pay costs of $21,300, on top of the $15,000 they had already been fined by the judge in the injunction case. Each of the five members of the board was thus left owing about $7,250.

The owners eventually held their meeting and threw out the board.

Note that the board’s original intentions here were not nefarious in any way. They saw a need to make repairs in the building and they presented a plan to do so. But their reaction when the owners disagreed with their solution was completely out of line. They acted both defensively and autocratically, as if they could bully the owners into submission.

They forgot the public-spirited motives that drew them to serving on the board in the first place: to serve the community, not themselves.

About Nicole Ryan Editor

I am Nicole Ryan, a contributing editor at Condo.ca—Canada's Condominium Magazine.

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