September 2019
Condo communities tend to talk of conflict of interest as it relates to condo directors. If they struggle with how to define conflict of interest it is because they have conflicting examples to follow.
Condominium managers have been known to accept compensation from vendors while receiving payment from the corporation. Local Canadian Condominium Institute (CCI) directors are volunteers who tend to earn their living by charging fees to communities for products or services. Condominium Authority of Ontario, funded by the condo community, includes directors compensated by condo corporations for services they provide. Residents and vendors can advocate for positions with perceived personal benefit.
None of this is unethical or illegal although it is below the standard some expect of condo directors. The best directors are those who are knowledgeable, have affiliations and contacts. Accepting these influences is a necessary compromise for obtaining their expertise and time. Yet some communities drag directors through the mud claiming conflict of interest rather than admit true intentions.
There is no conflict when a condo director earns income by charging vendors or condo corporations for product or services. Conflict of interest arises when a director is involved in a decision that can directly benefit them.
There is no conflict when a condo director earns income by charging vendors or condo corporations for product or services. Conflict of interest arises when a director is involved in a decision that can directly benefit them.
If the best decisions are made by avoiding conflict of interest situations communities require a different approach to obtaining information. An association exclusively representing their interests would be more effective than reliance on vendors and other organizations. This requires communities to work together for their mutual interest. To have interests represented without conflict of interest would require at least three things:
- All condo corporations would need to provide funds on an annual basis to establish their own organization with paid employees. This organization needs to work with government and industry organizations to represent the interest of the entire condo community.
- Directors in this organization, elected by condo owners, should not earn income by charging fees to condo corporations.
- Necessary expertise required by the organization would have to be funded by the organization. This would necessitate hiring consultants and others to pursue specific goals.
Such an organization is unlikely in the foreseeable future. Until such an organization exists, condo directors should evaluate much of the information they receive while considering the potential existence of conflict of interest.
