Legal

January 26, 2026 Published by Golden Horseshoe Chapter - By Stephanie L. Sutherland

The Duty to Act (Reasonably) – Exercising Discretion in Decision- Making for Condo Boards

From the Volume 26, Winter 2026 issue of the CCI GHC Condo News Magazine

Every day, condo Boards make decisions – large and small – about how their condos operate. It’s a big responsibility, and one that individual directors should, and do, take seriously. I often get questions from Board members about their potential personal liability, wondering about the risks even where they are doing their best for their condo, and requesting guidance on decision-making.

The Condominium Act, 1998 is a good place to start for directors who are looking for guidance on their duties with respect to decision-making. Section 17(2) of the Act says the a condo has the duty to “control, manage and administer the common elements and the assets of the corporation”, and section 17(3) says that a condo has a duty to “take all reasonable steps to ensure” compliance with the Act and with the condo’s governing documents – the Declaration, By-laws, Rules, and policies if applicable. As the decision-making body for the condominium corporation, the Board is who carries out those duties of the condo.

Board members can also look to the Act for guidance on their personal process for decision-making. Section 37(1) states that directors must “act honestly and in good faith” and make decisions that “a reasonably prudent person would exercise in comparable circumstances.”

In addition to these duties set out in the Act, case law has recognized other duties that arise in the context of Board decision-making, and particularly with respect to enforcement: the duty to investigate, and the duty to meet.

Taken together, these duties can perhaps be summarized with two words: Exercise Discretion.

Whether it’s a records request from an owner, a complaint about non-compliance, a decision about repair and maintenance, or choosing which contractor to hire, each director on the Board must exercise discretion in forming their opinion and making the decision.

It sounds simple, but it’s a difficult thing to do. There are many factors that can affect a director’s decision-making process: pressure from owners, financial considerations of the condominium corporation, opinions from professionals, and the director’s own personal feelings and beliefs. Some may say that last factor should not be part of the decision-making process, but directors are human after all, and none of us can truly separate from our own feelings and beliefs. Directors should, however, make best efforts to keep personal issues out of decision-making when acting in their capacity as director.

There is a process that can be followed that can help directors to carry out their duties properly and in accordance with the Act, and that process starts with gathering all the relevant information. This is where the duty to investigate and the duty to meet come in, for enforcement matters, but in my view it applies equally to all kinds of decisions that Boards must make. Review relevant documents, speak with the people with the knowledge – whether that’s witnesses or experts – and make sure that you know the legal considerations. After all, making decisions in a way that a reasonable person would do in similar circumstances is going to be difficult to do if you don’t have the information you need to determine what exactly those circumstances are.

Once the Board has the information that it needs and is ready to decide on next steps, the ultimate question at the centre of the decision-making discussion should always be “What is in the best interests of the condominium corporation?”. Of course, this question should always be asked in the context of the Act and applicable law; non-compliance with legal requirements will never be in the best interests of the condo. But while what some owners may want, or what will cost the least, or even what seems kindest and most fair, are all considerations, they are not the ultimate question.

An example of this that has come up frequently both in recent case law and in some of the files our firm has dealt with is how a Board should approach a situation where a tenant or occupant in a rented unit has caused the condo to incur damages and/or costs. Perhaps there has been a fire in the unit, or the condo has needed to hire additional security to deal with the tenant/occupant and their guests, or the condo has incurred legal costs in enforcing compliance against the problematic individual. This is often happening while the unit owner is doing their best to address the situation, within the restrictions of the process for eviction set out in the Residential Tenancies Act or other legal frameworks that may apply.

In these situations, Boards often instinctively want to find a way not to charge back the amount to the unit owner, who has done nothing wrong and is working cooperatively with the condo to address the situation. This is what seems kind and fair. Unfortunately, it is likely not what is in the best interests of the condo.

If the costs incurred by the condo are not charged back to the unit, then the condo has no lien right, which is a very powerful basis for recovering its costs. It could sue the tenant/occupant for the amount incurred, or if there is a court order can pursue recovery of costs through court enforcement methods, but if the person does not have the money or cannot be found then the condo will have little chance of recovering the money. If the condo cannot recover its costs, then those costs are passed on to every other unit in the condo.

The landlord unit owner may not have done anything ‘wrong’, but they did make the choice to rent out their unit or allow the occupant to reside in the unit, and the Board cannot make the rest of the unit owners suffer the consequences of that one unit owner’s choice.

The necessity to centre the best interest of the condo regarding legal costs was set out in the recent decision of York Region Condominium Corporation No. 570 v. Edery, 2025 ONSC 4190, where a daughter moved in with her elderly mother who owned the unit, and began to cause serious problems within the condo. While the other daughters, as powers of attorney for the mother who had Alzheimer’s, attempted to remove the daughter, ultimately the condo was required to bring an application for an order that the daughter was prohibited from being on the condo’s property. The condo sought its legal costs for the application. The Judge hearing the case recognized that the daughters, on behalf of their mother, had attempted to remove the problematic daughter, and that it was unfortunate that the mother would have to incur the costs created by the daughter’s behaviour. Ultimately, though, the condo as a legal entity and the other unit owners could not be required to pay for the costs caused by one unit owner. The Judge did, however, exercise discretion in ordering that the daughter was to reimburse the mother for two-thirds of the costs award.

A Board of Directors in a situation like this must exercise discretion and take the legal options available to it to ensure that the condo recovers the costs, by charging back the amount to the unit and, if necessary to preserve the lien right, registering a lien against the unit. However, as the Judge did in the Edery decision, the Board can also exercise its discretion in how and whether it chooses to enforce that lien right: perhaps the condo and the unit owner can enter into a reasonable payment plan rather than requiring the owner to pay the entire amount upfront or can provide a reasonable amount of time for the unit owner to gather the necessary funds. Proceeding directly to the power of sale process and requiring the unit to be sold to pay off the amount owing may be an option, but that doesn’t necessarily mean it’s a reasonable step to take in the circumstances.

Another type of situation where I often see Boards struggling with centering “the best interests of the corporation” is when a complaint is received from a unit owner or resident who has historically been the source of trouble for the condo. In these cases, it is understandably tempting to downplay or dismiss the complaint given past behaviour. However, it is essential for directors and the Board as a group to treat the complaint as they would any complaint received from any unit owner or resident. Previous interactions with the individual may need to be considered, but it must be remembered that someone who tends to create problems can also themselves experience a legitimate problem, and the Board still has the same duty to address that problem as it would for anyone else in the condo community.

Again, then, the Board must exercise discretion: gather the necessary information, consider the issue from as unbiased a perspective as possible, and decide how to respond based on the relevant facts and the law. Dismissing an otherwise legitimate complaint because it comes from someone who has created problems for the condo in the past will likely not be in the best interests of the condo, as it will very possibly create further legal issues.

For every decision that a condo Board must make, there can be several potentially reasonable and appropriate options. It is the duty of each individual director and the Board as a group to exercise their discretion, consider the relevant information and legal issues, and make a decision that can be justified as being in the best interests of the condominium corporation. If that approach is taken, then the directors will have met their duties under section 37(1) of the Act, the condo will have met its duties under section 17(1) and (2) of the Act, and the condo and its community will have been well-served.

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Stephanie Sutherland is a condominium lawyer at the Kitchener office of Cohen Highley LLP. Stephanie assists condominium boards, unit owners, and managers with day-to-day governance matters, compliance issues, drafting and registration of new and amended condo governance documents, court and CAT proceedings, and mediations and arbitrations.