Condo democracy has had a fair bit of bad press recently. Vote rigging, fraudulent proxies and director collusion made headlines in May. But is it really all gloom and doom in condos under Ontario skies? In this post, we provide 10 tips to improve condo governance and reduce frustration associated with condo living.
Recent media reports
The month of May saw its fair share of sensationalist articles on the state of Ontario’s condominium democracy. In his article of May 17, 2017, Konrad Yakabuski of the Globe and Mail painted a portrait of complete condominium “anarchy”. He reported that condo boards are the fourth level of government “without the required checks and balances” and with “unethical governance”, all leading to a “living hell”. Yakabuski reported that these city-states are “engulfed in civil warfare”, with board elections often being the subject of “collusion to gain control of the board”. Filled with superlatives and hyperboles, the article presented very little in support of the “totalitarian regimes” the author described.
CBC also reported on allegations of condo voting irregularities and contentious contracts. In its piece of May 23, 2017, CBC’s Solomon Israel published a list of tips to evaluate whether your condo board is “above board”. Israel suggested that owners should be suspicious of who is on the board and should “test” their board by seeing how quickly owners get access to condo records. If owners are concerned, Israel wrote, they should “shake things up” and requisition a meeting to remove the board.
Not to be left behind, Prajakta Dhopade published a piece in MacLean’s on May 26, 2017, on what is described as the “dictatorial nightmare” of condo living where tenants have “limited powers to fight back” the “powerful condo boards”.
What the new Condo Act is supposed to fix
The province is reported to have come to the rescue with the passing of Bill 106, ominously titled the Protecting Condominium Owners Act. Who the owners were being protected from remained somewhat unclear. Builders? Managers? Boards of directors?
The Legislative Assembly of Ontario debated Bill 106 for some 10 hours in the fall of 2015. There, our elected representatives had much to say about how condo owners are stuck in the “Wild West … world of corrupt condo managers, rigged repair contracts, unexplained maintenance fee increases, abusive and unresponsive boards that refused to be open and accountable to the owners whose money they spent”. Gila Martow, Thornhill’s MPP, compares it to “high school, where you have the cool people… on the board, and they’re doing things that they want to do”.
This left me to wonder how many of these commentators have lived in a condo and how many have served on their board of directors.
In today’s society of alternative facts and easy generalizations, it is easy to conclude that the exception is the general rule. Let’s consider a few facts and figures.
Ontario is said to have some 10,000 condominium corporations. These legal entities are run, maintained and held together by some 35,000 volunteer condo directors, who spend countless hours devoted to the wellbeing of their communities. These directors are responsible for the dwellings of some 1.4 million Ontarians. This is more than the respective populations of Saskatchewan, Manitoba, Nova Scotia, New Brunswick and PEI. Stated otherwise, condo owners represent an entire province – and a big one at that.
The job of a condo director
Most condo owners will tell you that they bought condominiums because they wanted carefree living. They had enough with traditional homeownership, with all the trouble, maintenance and upkeep it required. They wanted to be able to leave their unit, lock the door behind them, and not have a care in the world. They wanted someone else to deal with snow, grass, landscape and maintenance.
But if owners won’t do it, then who will?
It is from these very same owners that we expect to find volunteer directors ready to manage multi-million-dollar corporations, operating on six or seven-figure budget. We count on these directors to maintain, repair and operate complex equipment such as HVAC, plumbing, boilers, heaters, risers, chillers, elevators, etc. These directors also manage human resources, resolve conflicts and interpret legislation and complex governing documents. They must also develop and implement maintenance plans. In order to do this, they spend hours on end, pouring over numbers and spreadsheets, reviewing stacks of documents, contracts and correspondence, meeting late in the evenings and on weekends. They write communiqués to owners, set up blogs, respond to complaints, act as umpires and respond to leaks and other emergencies. These directors often maintain private roads and parks, look after garbage collection and ensure reliable electrical and water distribution to some 700,000 Ontario dwellings. They maintain elevators, emergency backup systems and all of the fire alarm and fire equipment systems. In many cases, they operate gyms, pools and recreational centres.
The best part of it all is that the near totality of them do it all for free. No compensation, no overtime, no pension plan and often… no “thank you”.
Naturally (and thankfully), directors don’t do this alone. They are supported by property managers who often get the brunt of owners’ discontent and who give up their evenings to meet with boards and to tirelessly explain and educate owners and directors alike.
Why no one wants to be a director
Once a year (or more often if owners requisition meetings), these condo directors report to owners. Courageously, they sit in front of their peers and neighbours and report on the good, the bad and the ugly. In the context of these annual general meetings, the assembly of owners often forgets that these directors (those whom they have elected) are owners too. They too pay condo fees and special assessments. They too feel the disruption of the out-of-service elevator and the frustration of non-responsive contractors. They too would like a state-of-the-art gym, faster snow removal and better landscape. They too would like this to be done at lower cost. Yet, for some reason, too many of these AGMs turn into a “them versus us”, with owners thinking that their elected directors are incompetent, dishonest or even in cahoots with one another or with contractors.
Being a condo director is a bit like being in politics, with none of the perks and with everyone one of your constituent knowing exactly where you live.
CBC reported on the unbelievable story of non-resident “serial board members” who allegedly attempted to take over control of various condo corporations in Toronto. That may be the case. I don’t know. But I can tell you that people don’t line up to become condo directors. In fact, more often than not, boards have difficulties finding volunteers to take on this job – often despite (or perhaps because) of the criticism, complaints and attacks from the owners in attendance at the AGMs. Everyone has great ideas on how things should be done, but won’t volunteer to help. I was told long ago that you don’t criticize the painter unless you too are holding a paint brush.
Don’t get me wrong. While most directors act diligently, honestly and in good faith, there are bad apples out there – mainly as a result of a lack of knowledge or education. Rarely as a result of bad faith or dishonesty. In most cases – perhaps the near totality of them – you have knowledgeable, caring and generous directors doing the right thing day after day.
So, are we faced with condo anarchy or are we collectively suffering from a common case of owner apathy?
How to improve the governance of your condo?
How can we improve condo governance in such circumstances of misunderstanding and distrust? Here is my list of 10 sure tips to improve the lives of condo owners… and of their directors:
- Before moving in, pick your condominium carefully. You may not be able to BBQ on your balcony. There may be pet restrictions. It may be a smoke-free complex. You may not be allowed to park your kayak in your parking spot and not all condos allow short-term rentals (see our post on Airbnb being incompatible with single family provisions);
- Read the corporation’s declaration, the by-laws and the rules;
- Abide by the corporation’s governing documents and rules. Condo living is not for everyone (see point #1 above). While there are many benefits to common living, it requires you to give up some freedom. All are required to abide by the condo rules and all have a right to expect that others will. The corporation has a statutory obligation to take all reasonable steps to ensure such compliance;
- Educate yourself on the working of condominiums. There are tons of seminars available on the topic out there;
- Read the AGM package and familiarize yourself with the budget;
- Attend the AGMs and special meeting of owners. Most corporations struggle to reach the required 25% quorum. In fact, the new Condo Act will reduce this quorum to 15% if quorum is not reached by the third attempt. What does that tell you about owners’ apathy and disinterest?
- If you really can’t attend the AGM, sign and return a proxy. It is difficult to understand why corporations don’t achieve quorum closer to 100% considering that all that owners have to do is date, sign and return their proxy;
- Run for election. Give up your free time (and some of your work and family time). Put your money where your mouth is and make a difference;
- Make constructive suggestions. But, more importantly, when you do, be prepared to also volunteer to take the lead on the work required. I often hear of owners requesting newsletters, for example. That sounds like a perfect project for the person suggesting it;
- Volunteer! Help the gardening committee. Help with communications to owners. Get involved with the neighbourhood watch. There are tons of ways to help your community.
The New Condo Act is not going to be the El Dorado that some want it to be. It will not fix everything and certainly not overnight. Like any new “operating system”, there will be growing pains. These may actually last a few years. In the meantime, we can only hope that the new Condominium Authority of Ontario will provide owners and directors alike with additional information and education which will help bring some understanding to the roles and obligations of directors and of owners.
At the end of the day, democracy (in condos or elsewhere) only works if it is exercised properly.