Legal

July 7, 2022 Published by Eastern Ontario Chapter - By James Davidson

What Protects a Board or Manager from Excessive Questioning?

From the Volume 32 issue of the CCI Eastern Ontario Condo Contact Magazine

We hear it again and again from condominium Managers and Board members:

“Eighty percent of my work comes from just a few of the owners.”

In general, this work comes in the form of questions or demands for extra information.

Most of the time, the questions received from owners are reasonable and can be easily answered. But in many condominiums, there is a small group of owners (perhaps only one or two) who insist on receiving all sorts of extra detail. In many cases, these owners essentially want all detail that is available to the Board (and sometimes even more detail) without actually being on the Board.

As confirmed by the Condominium Authority Tribunal (CAT) in the recent case of Sava v. York Condominium Corporation No. 386, condominium corporations are not required to “explain” the corporation’s records. As long as the corporation’s records are clear, owners have no right to “extra” information (beyond what is contained in the records).

In the same case, the CAT confirmed that condominium corporations are not required to create records (requested by an owner) that don’t already exist (unless of course the record is required by the Condominium Act or by the condominium’s governing documents).

So in summary, owners are generally only legally entitled to the information contained in the corporation’s records.

Here’s the problem: Suppose an owner requests extra detail, and you cordially respond as follows: “I’m sorry, your request goes beyond the obligations of the condominium corporation.” Some owners may understand, and may accept this response. Some may not.

If the owner does not accept your response – if the owner “won’t take no for an answer” – the owner will quickly identify some other options:

1. The owner may decide to make numerous requests for records, including requests for records not previously mentioned by the owner.

According to the Regulations under the Condominium Act, owners are only permitted to make requests that are “solely related to that person’s interests as an owner”…”having regard to the purposes of the Act”. But the Regulations also say that the owner is “not required to provide a statement of the purpose of the request”. Therefore, if the owner has an improper purpose (for instance, a desire only to create extra work for the Manager or the Board), this is extremely difficult to prove.

2. The owner may make application to the CAT for clarifications based upon an argument that the corporation’s records are not sufficiently clear.

In the Sava case, the CAT confirmed that the corporation may be ordered to pay costs (to the owner) in circumstances where the corporation’s records are not sufficiently clear.

The bottom line is as follows: Owners who want extra information can take steps to place huge additional burden upon the condominium corporation (namely upon the Manager and/or the Board Members). They can do this by making numerous requests for records or by challenging the adequacy or clarity of the available records. Note as well that owners can make
records requests at very little cost. Core records (if requested electronically) must be provided at no cost. And the CAT has also set quite low costs applicable to non-core records.

It's a system that is full of opportunity for difficult owners. And the practical result is that – in most cases – the corporation’s best option is simply to provide all of the records, and also to provide the extra detail, requested by the owner.

Condominium owners already receive a huge amount of information: Meeting notices, Periodic Information Certificates (and updates), Annual financial statements, Annual Operating Budgets, Reserve Fund Notices of Future Funding, to name just a few examples. Owners also have the right to attend the AGM, where they can ask questions of the auditor and also raise any matter relevant to the affairs of the corporation.

If an owner has a desire or a need for additional information beyond all of the basic information (and opportunity for information) available to all owners, it seems to me that the owner should be covering the cost. This sort of amendment to the Act and Regulations would go a long way towards protecting Managers and Boards.

James Davidson is one of the founding partners of Davidson Houle Allen LLP. Jim has been practicing condominium law for over 35 years. He represents condominium corporations, their directors, owners, and insurers throughout Eastern Ontario. His experience also includes building deficiencies, shared property interests, co-ownership and construction law. Jim is proud to be an associate (ACCI) and also a fellow (FCCI) of the Canadian Condominium Institute.