If you own a condo or manage a condo building, you are probably familiar with the potential for conflict when it comes to condo boards and the Condominium Act, 1998. There are all kinds of laws about how a board needs to operate and it’s no secret that some of these laws cause frustration for condo managers, unit owners, directors, and lawyers.
We try to keep track of what’s going on in condo law because as condo electricians, our clients need to abide by these laws and some of them apply to the work we do in their units or in common areas. One of our favourite places to read about condo news is at The Ontario Condo Law Blog. They recently posted something we knew that our readers would be able to relate to and would be interested in: the owner-occupied director position.
Condo boards have rules about who can sit on them and the most controversial one is that each board needs to have one member who lives in the unit that they own. I’m sure you can understand why this rule seems like a good idea, as people who actually live in the building want to make sure that they have a voice in how it operates. Unfortunately, there are all kinds of blurry lines to deal with and the position is often a source of conflict.
“For the past 12 years, Ontario condo managers, directors, unit owners and lawyers have bemoaned the unfortunate and ill-advised creation in the Condominium Act, 1998 of the owner-occupied reserved position on condo boards. That position, which is mandatory in condominiums where at least 15% of the units are “owner-occupied units,” is reserved for voting by the owners who occupy their units, and only the those owner-occupiers can vote to remove such a director.
The concept behind the reserved position was two-fold. First, to protect owner-occupiers where the declarant would otherwise control the board during the first year or two of the condo’s life. Second, the position would provide counterbalance in cases where the majority of unit owners are non-resident investors who might elect a board to serve their own interests (presumably to the exclusion of the owner-occupiers). While admirable, these concepts are not particularly compelling, for the following reasons:
- Neither of these two scenarios is terribly likely;
- Off-site owners generally don’t vote, let alone conspire to stack the board;
- All condo directors have a duty to act in good faith and balance the interests of competing stakeholders and could always be held to account for being oppressive to any class of owners, including owner-occupiers; and
- One position on a 3 or 5 member board does not a majority make!
In over ten years of working with hundreds of condo corporations, I have yet to see a single instance where the owner-occupied reserved position served any useful purpose. In fact, each of the condos I’ve worked with who fill that role would eliminate it in a heartbeat if they had their way.”
Read the entire post on the Ontario Condo Law Blog.
If you currently manage a condo building, have you taken a look at our electric condo services?