August 2017
Condo directors are expected to rely on consultants to help manage their condo corporation. Consultants may be accountants, lawyers, engineers, insurance agents, or anyone with expertise or insight required by the condo board.
Good condo boards have learned to rely on their consultants. They know who to contact, and when to contact them, prior to making decisions involving liability and risk.
Condo directors are volunteers in a management role. They generally lack authority or expertise to speak on legal, technical, business or insurance issues and are encouraged to defer to their consultants when such matters arise.
It is advisable to consult your condominium corporation lawyer before taking actions that can have legal implications – not after. A good condo lawyer should be able to save the condominium corporation more than the cost of their advice.
When contacting a condo lawyer, the best results occur when condo boards have acted properly, in compliance with governing documents and with transparency. The following suggestions will help to achieve this:
- Fiduciary duty implies making the best decisions based on available information. Directors should not rely on past practices or decisions of former directors.
- Understand governing documents. Many rules and bylaws can be outdated and should be revised before issues arise. By the time an issue arises, it can be difficult to obtain the necessary votes to make a change.
- Communication is crucial. Be transparent with owners in the event that an honest error in administration or judgement has been made. Mistakes happen. Once an error is noticed, engaging a lawyer to cover it up is not a solution to fixing the problem. A simple phone call or conversation may be more helpful than engaging legal counsel.
- It is important not to disclose personal information. Sensitive issues arise, such as late payment of condo fees, where the identity of an owner is not the business of anyone beyond the board.
- Corporation records are not to be kept secret. Owners are entitled to view these records within reason.
- It is best when a condo board is open with owners although some issues are best not discussed outside of a board meeting.
- Condo boards should always present a unified front to the community. Disagreements are acceptable and expected at board meetings. Once a decision is made it is important that the board speak with a single voice.
- One individual should be the point of contact between legal counsel and the condominium corporation. Having three directors calling about the same issue is time consuming, repetitive and costly.
- The purpose of retaining legal counsel is to avoid breaking laws and to avoid litigation. Litigation is an expensive, long and time consuming process. It can decrease property values and increase condo fees. Most litigations could likely have been resolved if parties worked together before disagreements escalated.
- Nobody ever wins in court. Never take things personally and allow minor disagreements to escalate into public confrontations.
