December 2021
Directors, particularly those newly elected, can be enthusiastic, eager and interested in serving their community. What many lack is experience in running a condo community. For this they require time to develop experience in the realities of community management.
Governing documents identify rules everyone is expected to follow. In practice and in the law, governing documents are the bible a board should adhere to. Deviating from them is ill-advised from both a practical and legal perspective. The sooner this is recognized by a condo board the better it is for everyone.
While mistakes do happen, contradicting or ignoring governing documents rarely produces a positive outcome. Directors are protected against being held accountable for mistakes which happen when they seek to do the right thing and use their best judgement. They are not protected against blatantly ignoring what is stated in governing documents or ignoring their own rules.
Acting against or outside of a corporation’s governing documents and rules can place directors and an entire community at risk. One of the more common mistakes is directors choosing to ignore issues and failing to make a decision when one is called for. This may occur when a board decides against taking a vote on an issue. A common reason is to avoid having a motion fail. Having failed to make a decision, protection against personal accountability for decisions may not exist. It can be better to document a board’s responsibility by addressing an issue lacking support than failing to address it.
Residents will scrutinize board decisions and may assume anything undisclosed is improper. Meeting minutes generally report only matters voted on. Ongoing issues failing to be voted on can be viewed as failing to provide full disclosure or something more sinister.
- Not all matters are serious. Constantly threatening board members for every transgression and judgement will make it difficult to find willing and capable volunteers to serve as directors. There needs to be a willingness to accept minor transgressions and judgements that may conflict with preferences of some owners.
Deliberate misuse of authority and selective enforcement can be damaging to the reputation of a condo board. It becomes harder to enforce rules and regulations. Sellers may find it harder to sell their property. Directors could face financial costs or jail if engaged in financial schemes detrimental to those they represent.
Bending the rules can appear neighbourly or an easier way to deal with difficult residents. Rarely does this work out well. Once others learn of preferential treatment they will demand the same.
Rules, policies and procedures exist for good reason. Deviating from these practices, for any reason, is rarely a good idea and can lead to serious trouble.
