Governance

October 30, 2023 Published by Manitoba Chapter - By Alan Forbes

Condo Conversation Corner - October 2023

From the CCI Manitoba Fall 2023 Condominium News and Views Magazine

In this edition of Condo Conversation Corner, we have three topics of interest:

• What should a condo board director know?
• How does a condo board find a new property manager?
• What to do if a condo board is failing in its duties.

If you want to contribute to the discussion, you can make a submission via our website  or send us an email.

---

Disclaimer

CCI Manitoba is unable to provide specific legal advice. We recommend that you speak to a lawyer regarding the challenges or problems you may be experiencing. For your information, a list of lawyers who are Professional Members of the Manitoba Chapter of the Canadian Condominium Institute is available on our website. 

Note that frequent references are made to Manitoba’s Condominium Act and regulations.

---

What should a condo board director know?

We get this question a lot. In fact, it often comes up after someone says, “I missed our condo’s AGM and was elected to the Board of Directors.” 

First of all, all unit owners — especially those interested in becoming directors — should have read their condo corporation’s declaration, bylaws and rules. Directors,  in particular, should re-read these documents periodically so they are familiar with them and so that when questioned by other directors or by unit owners they can answer intelligently. 

Secondly, all directors should know that condo corporations fall under provincial legislation, not federal or municipal laws. This link takes you to the Manitoba government’s guide to the Condominium Act and regulations. We recommend directors mark it as a bookmark or favourite on all of their electronic devices because you never know when or where you will be when asked a question. 

Thirdly, all directors should understand the documentation hierarchy and order of precedence; the Condo Act is supreme in this regard. The document hierarchy, in order of precedence is

1. The act
2. The corporation’s documents, including

a. the declaration
b. the bylaws
c. the rules and regulations
d. all policies and procedures (not all condo corporations have these).

That describes the minimum that a director should know. It serves as the foundation for continuous learning. All directors should take advantage of opportunities to expand their knowledge of condominiums by reading publications such as this one, attending seminars and webinars and completing director training courses. Note that CCI Manitoba has monthly education events, courses for directors, and that members of CCI Manitoba are eligible to participatein webinars put on by CCI chapters other than their own at the member rate of that other chapter. As well, CCI Manitoba has recordings and/or presentations from prior education events in the members-only area of our website. (Note that login credentials are required. If you don’t know yours, just email us.)

“The more that you read, the more things you will know. The more that you learn, the more places you'll go.”

― Dr. Seuss, I Can Read With My Eyes Shut!

---

How does a condo board find a new property manager?

Before asking this question, the directors of a condo corporation board should ask themselves why they think they need a new property manager. Directors should understand the management agreement between the corporation and the property manager, which will describe the services provided, the fees, renewal and termination terms and conditions, etc. If there is a perceived performance issue, make sure it is in regard to a service you are paying for, and note that it is always easier to improve an existing relationship than it is to establish a new one.

Condo directors should understand that they are ultimately responsible and accountable for the governance of their corporation. The property manager takes direction from the condo board (hence the term Board of Directors) but can also provide advice or recommendations based on his or her experience. However, the property manager cannot make decisions for the board.

If your condo board does reach the point where it feels it does need to find a new property manager, it should put together a plan that includes sending out a request for proposal (RFP), and a means to evaluate the submitted proposals. For those interested, CCI Manitoba can provide copies of a plan and RFP that has been used by other condo corporations. Just send us an email to request copies.

---

What to do if the condo board is failing in its duties

We get questions periodically from unit owners complaining about one or more directors on their condo board and asking what can be done about them. Complaints include directors with ethical or moral deficiencies, being vindictive, being self-serving, being ineffective due to lack of effort or lack of knowledge, and for other reasons.

The answer is straightforward but not necessarily easy. First of all, the Board of Directors is elected and governs the condo corporation. Just as for municipal, provincial and federal governments, directors can be voted out of office. Clause 101(1) of the Condominium Act sets out how directors can be replaced.

Removal and replacement

101(1) A director may be removed before the end of the director's term of office by a vote at a general meeting of unit owners. Another director may be elected for the remainder of the term.

This vote can take place at the Annual General Meeting or at a special general meeting. 

Annual General Meeting

110(1) Within six months after the end of each fiscal year of a condominium corporation, the board must hold a general meeting of unit owners.

Special general meeting requested by unit owners

114(1) A unit owner may request that a special general meeting be held by giving the condominium corporation a written request signed by those unit owners entitled to vote who, at the time of the request, own at least 25 percent of the units.

While it sounds easy, much effort is required. Recall that we just went through a provincial election, with speeches, door knocking and promotions to not only get you to vote but to vote for or against something or someone. The same applies to a condo board election. If unit owners want change, they should organize, go door to door to get the required support and have credible candidates lined up. 

---

Alan Forbes is a director of CCI Manitoba and its vice-president. He has been the chair of the Communications Committee for the past few years and has served on the Government Relations and Advocacy Committee as well as the Membership Committee.