Condo Living

May 5, 2022 Published by Toronto and Area Chapter - By James O'Hara

The Fundamentals of Condo Living

From the Spring 2022 issue of CCI Toronto Condovoice Magazine, Volume 26, Issue Number 3

This is the First of a Two-Part Series on Condominium Living Where I'll Answer Some of the Key Questions and Must-Know Points for Owners and Residents of this Style of Living

This first article begins with what a condominium is, what a board is, what it is responsible for, the importance of its role, key points, and considerations for owners in choosing the best candidate(s) during elections.

What exactly is a Condominium Anyway?
Let's begin by understanding what the word "condominium" or "condo" really means. It's often used in our society today to simply describe the type of home we live in and to differentiate from a detached home in a conversation. However, there is more to it than name alone and it does require a different level of understanding, a higher sense of community, awareness of regulations, and potentially more involvement for you as a condominium owner as compared to a detached homeowner. I will attempt to outline some of these all-important points in this article to understand how it can affect you and the place in which you live.

The term "condominium" is based on two words in originating from modern Latin; con (together with) and dominium (right of ownership) and can be paraphrased as "joint dominion" or "co-ownership" with the latter term being the one we are most familiar with, co-ownership.

What this essentially means for us as condominium owners is having the com- The Fundamentals of Condo Living Part 1 of a 2 Part Series This is the First of a Two-Part Series on Condominium Living Where I'll Answer Some of the Key Questions and Must-Know Points for Owners and Residents of this Style of Living bined ownership of an individual unit plus a shared interest in the common elements. Common elements are generally described as those being outside our own unit and are shared by all in the community. Some examples of which are the infrastructure to support and supply power and water, fire protection and safety mechanisms, corridors, garages, land, gardens, tennis courts, pools, recreation facilities, common areas, etc. These common elements are owned by a condominium corporation in which we (as condo owners) own an interest in.

What is a Condominium Board of Directors?
The body with the ultimate responsibility for the management of this corporation is the condominium board of directors. They have an incredibly important role to play in the successful management of your condominium corporation and they are elected by you, the owner.

In addition to being responsible for the management and governance of the corporation, the board of directors are also required to ensure compliance in accordance with The Condominium Act, 1998 which regulates the legal and fiduciary responsibilities of the condominium corporation. There are additional regulatory acts which board members must also be cognizant of and responsible for, including privacy, health & safety, and workplace harassment to name a few.

It is also paramount to recognize these board positions, roles, and responsibilities are custodial in both nature and tenure. Director(s) must be extremely mindful that they are in temporary custody of both the short and long-term needs of the condominium corporation and to ensure decisions are made in the owners' best interests. In the context of tenure, while a director needs to understand they occupy this entrusted position only for a specific period, their decisions also have significant consequences for the future life of the corporation's assets and ourselves as owners.

This is of major significance and is akin to a relay race, the incoming director(s) takes the baton from the previous director(s) and board. Decisions made by the predecessor(s), including operating budgets and reserve fund studies, are inherited not only by the new directors, but by all of us as owners through the votes we cast for the candidates running as potential directors. Therefore, participation through awareness, volunteering, and voting for the very best director(s) is a major consideration of condominium ownership. The track team analogy is an apt one here since as an owner you want not only to have a team of highly skilled competitors to choose from during qualifying (elections), but to field the very best team (of directors) possible for the event which, in this case, is the responsible management over the lifetime of the building and the corporation's assets.

Another important point to note here is that the board directors and committee members are unpaid voluntary positions. Essentially this means free time is selflessly contributed by the directors and committee members who serve in all our best interests and for which they deserve our sincere appreciation and thanks.

What Does This Mean to an Owner?
Given the critical importance and function of the board, it is extremely important for an owner either to be involved as a candidate if possible and/or to participate in the election of board directors by casting your ballot since you are essentially delegating the representation of your own interests to the board to ensure both the corporation's assets are being managed effectively now and into the future and that your interests are adequately reflected.

What Does a Condominium Board Do?
There are several common types of boards such as Advisory Boards, Executive Boards, Policy Boards, each have their own characteristics. Our board is what is known as a Governing Board. This is an important distinction since our board is primarily responsible for the oversight and governance of our condominium corporation. Owners elect a board of directors to oversee the business affairs of the condominium corporation. As an owner, you are a member of the condominium corporation, so board activities affect your condominium experience every day. Therefore, it's important for you to vote for the directors or become a director yourself. Elections occur during the annual general meeting (AGM).

What are the Board's Responsibilities?
There are a variety of key responsibilities of our all-volunteer board including (but not limited to):

• Setting policies and procedures.
• Making decisions.
• Strategic planning.
• Legislative governance of the various regulatory acts e.g., Condominium Act, Health & Safety, Privacy Act, etc.
• Budgeting and tracking the condominium's financial performance.
• Selecting, procuring, and overseeing contracted professional services including property management, landscaping, engineering, etc.
• Ensure all required maintenance and repairs are carried out.
• Hire specialists, like engineers, to update the reserve fund study every three years.
• Enact rules to promote the safety, security, and welfare of all owners.
• Provide regular communication with the other owners.
• And much more.

The Important Roles of a Condominium Board of Directors
A board is an organization which represents both the community and the multimillion- dollar assets and responsibilities of a corporation. It's important to recognize that a board is a human organization just like any other. This is where a combination of common sense, effective directors, strong leadership, and the application of sound organizational, management, teamwork, communications, are all critical to success.

The right combination of qualified directors and the application of good practices serve to create and build a strong and highly effective board. Therefore, it is critical to put forward, evaluate and select those candidates who can bring all these essential characteristics to bear. Failing to do so, and the consequences of a poor decision(s) will be upon everyone and felt for years to come. It is critically important for us to participate in the board elections and to work together.

Decision Making
Decisions must be made with short-, mid-, and long-term ramifications and benefits in mind. Decisions made need to be correct for the complex as a whole and the collective ownership. Bear in mind that some decisions may not necessarily be the "popular" decision. This is particularly true when complex decisions need to be made which many are not aware of the details and require wide input and deep consideration. Such are the challenges of a competent and sound board director.

Understanding
A board director requires a solid understanding of the concept of condominium living (as outlined in my article II to be published in August) and the recognition that a condominium is not a co-op.

As a board director, understand you're not in this for yourself, you're there to represent the community at large and personal profile or bias does not play a part in the role.

Leadership and Teamwork
Leadership and teamwork are critical elements of a well-functioning and high-performing board. No matter the task, project, or decision, a board needs to work together with Condominium Management and the extended team of experts to communicate, collaborate, and work effectively to achieve our goals. The ability to work in, contribute to, and participate as part of a team while cultivating a highly effective team-based environment within the board is an important leadership attribute which a successful director must possess.

Communications
Communication is the lifeblood of any condominium board and its community. It's impossible to overstate the importance of the value of communications. To be effective, directors must possess good communications skills themselves and recognize the important role that communications play on the board and to our entire community as a whole. Directors must be committed to the broad integration of communications at the board level and to execute clear and frequent communications to owners and residents on an ongoing basis.

Upcoming in the Next Article
The next article will delve more into governance and operations, a prime example of which is the oversight of the daily functioning of the condominium. For the effective running of a condominium, the board is responsible for the selection of a property management company to run the day-to-day operations on behalf of the condominium corporation. Oversight of the property management company is accomplished through a combination of communications when a matter requires an action before the next meeting and the monthly meetings at which the board provides governance on short-, medium-, and long-term issues and plans.