Condos are governed by house rules that are sometimes poorly understood. Here's how they work.
Most places have house rules.
Whether it’s no feet on the table at your parents’ place, $50 buy in at the craps table or no profanity in the barber shop, the rules influence your environment.
Condos have rules, too.
Much like a family home, business or socio-political establishment, a condo’s rules are the source of both its conflict and its cohesion. Condo residents elect members who make up a board that’s supposed to prevent the condo from falling apart, build what the owners tell them to and not break the law.
This process doesn’t always go smoothly.
The provincial government sets the rules while the condo board draws up a constitution, called a declaration, and makes decisions on the building’s overall functions.
The building’s day-to-day operations are run by a property manager who acts as an expert
advising the board, setting up contracts and enforcing regulations.
Just like in politics, in business or at home, people living in and working in condos don’t always follow the rules. The difference here is that condos are all of those things: a business, a home, and governed by an elected body.
More than one million Ontarians live in condominiums and since there is no oversight board for condo boards in Ontario for now, the board members have significant power over the owners
once they’re elected.
Condo board members aren’t required to have any legal or business education either, though the Ontario government says it’s planning on changing that in 2017.
There’s also supposed to be a government watchdog and a tribunal to mediate disputes, but that’s all uncertain until Kathleen Wynne’s Liberals bring the new condo act to fruition.
In fairness, condo boards do have a lot to live up to. Transparency and accountability are ideals few institutions, if any, consistently fulfill. So is condo living really as democratic as it’s intended?
And, are the directors, presidents and treasurers running condo boards any better than your average politician?
The Great Divide
Condo owners’ rights advocates, who exist, view the balance of power in far more stark terms than condo professionals like managers and lawyers. Though a difference of opinion between owners and the professionals they employ through their condominium corporation is predictable, the details of the conflicting views are not.
Anne-Marie Ambert was a condo board president for six years and now runs a website featuring advice for disgruntled owners called Condo Information Centre.
Ambert says she’s received over 5,000 messages almost exclusively from owners since 2009 complaining mostly about misusing condo fees paid by owners and lack of communication from the board. To a lesser extent, she says owners’ grievances include repairs not being carried out, boards or managers refusing to give owners access to condo documents, and owners feeling intimidated and threatened.
Ambert says one-third of owners reaching out to her are in fear and condo managers cause more problems than the elected boards. This picture of managers misappropriating funds and aggressively holding consequences over owners heads is outright disputed by Robert Weinberg, the president of the Association of Condominium Managers of Ontario.
Weinberg says that though “Everyone’s heard one time or another about some condominium corporation or the management company or the director (of the board ) stole money,” these were examples of a few bad apples and not representative of the industry as a whole. ACMO runs a great deal of education for condo managers to avoid the very problems Ambert hears about, registering condo managers and holding them to a code of ethics.
Weinberg says approximately one-third of condo managers in Ontario are registered and made to adhere to ACMO’s code of ethics.
Owners’ rights advocate Moti Flaster, who also runs a site featuring advice, suggests that there aren’t enough good managers for condos that are “popping up like mushrooms.”
The Nature of a Political Promise
Every year, condos are required to hold an annual general meeting where new members can be voted in by owners, but only if at least 25 per cent of the building is represented. One person who owns 30 per cent of a building counts as meeting the 25 per cent threshold, and if a quarter of the building is not represented then the previous board continues its rule.
Decisions on whether the building should allow new businesses to open on the ground floor or if there should be a garden on the rooftop patio are made through board meetings. Some boards meet only once a year while others meet many times a month.
These condensed housing units come with many monthly fees, mostly for maintenance but also for amenities like barbecues and additions like parking. The decision of how often these fees are raised and how they’re used lies with the condo board under the mandate of the voting owners. The older the building, the more maintenance it requires and that can raise the cost of maintenance fees.
Candidates campaigning for the condo board will make promises to the voting owners much like politicians make promises to the voting public. And much like in political campaigns, these promises range from the inventive to the untenable. Condo board candidates might entice owners by telling them they’ll keep their fees low, without disclosing the costs for maintaining the building will go up significantly. In some cases this leads to buildings falling into disrepair because board members won on a low-fee campaign, similar to a government promising to cut taxes without spelling out the effects on services.
What Everyone Agrees On
Despite Ambert’s assertion that condo lawyers and management companies would prefer less government oversight, Weinberg and condo lawyer Andrea Lusk both expressed optimism about greater regulations from the provincial government in the near future. Though concerns remain about how condo fees are spent, all sides agree on a degree of budget surplus being maintained to compensate for rising inflation and labour costs.