Recently, I attended a live and interactive webinar course: Condominium Governance Fundamentals (101). This course is the first in a series of courses that are part of the CCI Condominium Director Certificate program. The webinar was organized by CCI Toronto and Area.
I also attended CCI Toronto and Area’s “Condo Strength” session, which was held one week after the course. In this session, condo board members discussed topics relating to governance, so they could learn from one another.
I’m a volunteer member of CCI Toronto and Area’s Education Committee, but I wasn’t involved in organizing or planning this course or the Condo Strength event. I’m writing this post from my perspective as a condo board director, not in my capacity as CCI committee member.
I can confidently say that this webinar course provided a lot of value on a variety of topics relating to condominium governance. In this post, I share my learnings and elaborate on the topics covered. Let’s dive in!
Let me start with a brief overview of the audience participating in the course. There were close to 70 participants, a majority of whom seemed to be condo board members. There were some property managers in attendance as well. Interestingly, there were condo board members from across Canada in attendance, including Nova Scotia and Alberta. Some participants joined while traveling in Vietnam and Japan. What a showing!
The slides were presented by Patrick Greco of Shibley Righton LLP. Patrick kept the course interesting by asking questions and leading discussions about each governance topic.
The presentation was split into three parts:
Patrick analogized the hierarchy of condo laws and regulations to the rungs of a ladder. The Ontario's human rights code is the top rung of the ladder (though it doesn’t always apply). The condominium act and its regulations are the second-highest rung of the ladder. The third rung is the declaration of the condominium. Then next come the corporation’s bylaws. And lower on the ladder are the rules adopted by the condo board. The higher the rung, the higher the authority. So items lower on the ladder (e.g., the rules) aren’t effective if they conflict with items higher on the latter (e.g., the by-laws).
In this course, webinar participants asked several questions about a condominium’s by-laws and rules created by condo boards. For instance, participants learned that a standard-unit by-law clarifies for a condo and its owners what repairs the condo corporation will be responsible for in the event of certain accidents or disasters, such fires or floods.
Participants were curious to know whether a standard-unit by-law had to cover things like the original counter tops in a kitchen or the original flooring installed in a unit. But as it turns out, it isn’t necessary for standard-unit by-laws to include all the original finishings of a unit. A condominium can choose what it includes in a standard-unit by-law.
In fact, some standard-unit by-laws will exclude, among other basic finishes, the flooring of the unit or the kitchen and bathroom countertops. By excluding some finishings, condos effectively lower the potential expenses that the condo's insurance provider might be liable for. And as a result, this lowers the insurance premiums a condo would be required to pay, which in turn keeps maintenance fees low.
Another popular topic related to borrowing bylaws. Some participants asked if such by-laws had to be limited to certain projects or if they could continue to exist regardless of the specific project or job that would be paid for by the loan. The response? The condominium act doesn't impose too many restrictions on borrowing by-laws, which makes them flexible tools that can be used by condo boards. Borrowing by-laws don't necessarily have to be limited a single project, but the wording of the by-law will ultimately dictate its scope.
Borrowing by-laws may be the favoured method of funding major repairs and replacement projects in condos where the condo’s reserve fund doesn’t have a big reserve fund cushion and the condo’s owners aren’t sitting on piles of savings. In these cases, owners don't have the option to or simply don’t want to pay lump sums for special assessments, which would otherwise be needed to pay for the work that has to be completed. Borrowing by-laws have their benefits too - the expenses of the maintenance are spread out over time rather than being paid by present owners in a lump sum. So the costs are paid by the people who own the units over time and who are benefiting from the results of the completed repairs.
Later during the presentation, Patrick walked the group through the duties and responsibilities of board directors. One challenge raised by multiple participants on this topic was the difficulty their condo had filling all of the open seats on their board. The cause seemed to be a combination of disinterest and apathy, or, in some instances, owners didn't want to serve on a board that was dysfunctional.
It's interesting to note that boards can elect officers to participate in board activity who are not elected board members. For instance, an owner that is not elected may be appointed by the elected board members to be the secretary of the board. Only the position of president must be filled by an elected board member.
For instance, a condo board could name a retired engineer or lawyer (or anybody else for that matter) as an officer of the board. The officer’s duty would be to assist the board in carrying out its responsibilities or to administer the operations of the respective corporation. These appointed officers are not permitted to cast votes at board meetings. However, they may offer advice, review material and provide assistance to the board in navigating day-to-day issues including evaluating quotes, engineering reports, conflicts, etc.
Participants in the course also asked questions about whether boards can appoint owners or residents to fill vacant board seat. A board seat becomes vacant when a board member resigns from their position before the end of the term they were elected for, which is typically three years. Indeed, Patrick confirmed that a vacant board seat may be filled in this way. The board may appoint a non-elected owner or resident to serve on the board in the vacant seat until the following annual general meeting. Remember, this is only possible when such appointments abide by the declaration and bylaws and when the new directors complete a disclosure statement. The interim directors must also conduct the necessary director training from the CAO (Condominium Authority of Ontario).
Just like other participants, I had many questions. I asked Patrick what factors boards should take into consideration when doing business or making decisions between board meetings, which are often held once per month. Patrick explained that ideally, board decisions would only be made during board meetings in accordance with a condominium's by-laws and the condominium act. But in practice, as we all know, this isn't the case. Boards don’t have the luxury of waiting until they can convene a formal meeting to conduct board business. So, one recommendation was to make sure that boards who do business in between board meetings confirm whether they are allowed to conduct business and make decisions electronically (e.g., via email). Boards should also document their decisions and track approvals closely, so that they can ratify them at their next meeting.
In a perfect world, all relevant correspondence between board members regarding a decision the board needed to make between meetings would be recorded, and at the following board meeting, decisions made could be ratified. At a minimum boards and managers should retain their emails containing approvals to evidence that the majority of the board members have approved a particular course of action, which may then be ratified at a board meeting. This, in my opinion, is very possible yet can be very difficult to trace or find later. To make sure a board is conducting itself with good governance, I think it would be beneficial to use a system to track activity and associated approvals. Relying on emails is challenging.
Patrick went on to explain the function and responsibilities of property management in condominium governance in part 3 of the webinar. He explained that condominium boards choose property managers to handle a number of their duties, including administrative, financial, and physical management.
There appeared to be general agreement that property managers are essential to running a condominium building or townhome complex. There was worry that owners, residents, and, in some circumstances, other board members don't treat managers as well as they ought to. Patrick emphasized that there are many constraints and circumstances at play that have put pressure on the property management sector and have led to a shortage in the number of managers available, such as:
One recommendation to boards was to allow and facilitate communication between property managers and other experts, including lawyers, accountants, engineers, reserve fund study experts, mediators and arbitrators, social workers, members of law enforcement, and representatives from industry and regulatory organizations like the CAO and CMRAO (Condominium Management Regulatory Authority of Ontario). By giving managers the support and guidance they require, condo boards are better able to fulfil their obligations to their communities.
Although the webinar was schedule for 1.5 hours, it ended up running for over 2.5 hours! Most participants stayed the entire time as it was an engaging and informative session. To sum up the entire experience of the webinar: it was a lively discussion. Plus, Patrick did a great job of answering everyone's questions while also remaining on topic and offering his (non-legal) advice on the crucial subject of governance.
Recently, I attended a live and interactive webinar course: Condominium Governance Fundamentals (101). This course is the first in a series of courses that are part of the CCI Condominium Director Certificate program. The webinar was organized by CCI Toronto and Area.
I also attended CCI Toronto and Area’s “Condo Strength” session, which was held one week after the course. In this session, condo board members discussed topics relating to governance, so they could learn from one another.
I’m a volunteer member of CCI Toronto and Area’s Education Committee, but I wasn’t involved in organizing or planning this course or the Condo Strength event. I’m writing this post from my perspective as a condo board director, not in my capacity as CCI committee member.
I can confidently say that this webinar course provided a lot of value on a variety of topics relating to condominium governance. In this post, I share my learnings and elaborate on the topics covered. Let’s dive in!
Let me start with a brief overview of the audience participating in the course. There were close to 70 participants, a majority of whom seemed to be condo board members. There were some property managers in attendance as well. Interestingly, there were condo board members from across Canada in attendance, including Nova Scotia and Alberta. Some participants joined while traveling in Vietnam and Japan. What a showing!
The slides were presented by Patrick Greco of Shibley Righton LLP. Patrick kept the course interesting by asking questions and leading discussions about each governance topic.
The presentation was split into three parts:
Patrick analogized the hierarchy of condo laws and regulations to the rungs of a ladder. The Ontario's human rights code is the top rung of the ladder (though it doesn’t always apply). The condominium act and its regulations are the second-highest rung of the ladder. The third rung is the declaration of the condominium. Then next come the corporation’s bylaws. And lower on the ladder are the rules adopted by the condo board. The higher the rung, the higher the authority. So items lower on the ladder (e.g., the rules) aren’t effective if they conflict with items higher on the latter (e.g., the by-laws).
In this course, webinar participants asked several questions about a condominium’s by-laws and rules created by condo boards. For instance, participants learned that a standard-unit by-law clarifies for a condo and its owners what repairs the condo corporation will be responsible for in the event of certain accidents or disasters, such fires or floods.
Participants were curious to know whether a standard-unit by-law had to cover things like the original counter tops in a kitchen or the original flooring installed in a unit. But as it turns out, it isn’t necessary for standard-unit by-laws to include all the original finishings of a unit. A condominium can choose what it includes in a standard-unit by-law.
In fact, some standard-unit by-laws will exclude, among other basic finishes, the flooring of the unit or the kitchen and bathroom countertops. By excluding some finishings, condos effectively lower the potential expenses that the condo's insurance provider might be liable for. And as a result, this lowers the insurance premiums a condo would be required to pay, which in turn keeps maintenance fees low.
Another popular topic related to borrowing bylaws. Some participants asked if such by-laws had to be limited to certain projects or if they could continue to exist regardless of the specific project or job that would be paid for by the loan. The response? The condominium act doesn't impose too many restrictions on borrowing by-laws, which makes them flexible tools that can be used by condo boards. Borrowing by-laws don't necessarily have to be limited a single project, but the wording of the by-law will ultimately dictate its scope.
Borrowing by-laws may be the favoured method of funding major repairs and replacement projects in condos where the condo’s reserve fund doesn’t have a big reserve fund cushion and the condo’s owners aren’t sitting on piles of savings. In these cases, owners don't have the option to or simply don’t want to pay lump sums for special assessments, which would otherwise be needed to pay for the work that has to be completed. Borrowing by-laws have their benefits too - the expenses of the maintenance are spread out over time rather than being paid by present owners in a lump sum. So the costs are paid by the people who own the units over time and who are benefiting from the results of the completed repairs.
Later during the presentation, Patrick walked the group through the duties and responsibilities of board directors. One challenge raised by multiple participants on this topic was the difficulty their condo had filling all of the open seats on their board. The cause seemed to be a combination of disinterest and apathy, or, in some instances, owners didn't want to serve on a board that was dysfunctional.
It's interesting to note that boards can elect officers to participate in board activity who are not elected board members. For instance, an owner that is not elected may be appointed by the elected board members to be the secretary of the board. Only the position of president must be filled by an elected board member.
For instance, a condo board could name a retired engineer or lawyer (or anybody else for that matter) as an officer of the board. The officer’s duty would be to assist the board in carrying out its responsibilities or to administer the operations of the respective corporation. These appointed officers are not permitted to cast votes at board meetings. However, they may offer advice, review material and provide assistance to the board in navigating day-to-day issues including evaluating quotes, engineering reports, conflicts, etc.
Participants in the course also asked questions about whether boards can appoint owners or residents to fill vacant board seat. A board seat becomes vacant when a board member resigns from their position before the end of the term they were elected for, which is typically three years. Indeed, Patrick confirmed that a vacant board seat may be filled in this way. The board may appoint a non-elected owner or resident to serve on the board in the vacant seat until the following annual general meeting. Remember, this is only possible when such appointments abide by the declaration and bylaws and when the new directors complete a disclosure statement. The interim directors must also conduct the necessary director training from the CAO (Condominium Authority of Ontario).
Just like other participants, I had many questions. I asked Patrick what factors boards should take into consideration when doing business or making decisions between board meetings, which are often held once per month. Patrick explained that ideally, board decisions would only be made during board meetings in accordance with a condominium's by-laws and the condominium act. But in practice, as we all know, this isn't the case. Boards don’t have the luxury of waiting until they can convene a formal meeting to conduct board business. So, one recommendation was to make sure that boards who do business in between board meetings confirm whether they are allowed to conduct business and make decisions electronically (e.g., via email). Boards should also document their decisions and track approvals closely, so that they can ratify them at their next meeting.
In a perfect world, all relevant correspondence between board members regarding a decision the board needed to make between meetings would be recorded, and at the following board meeting, decisions made could be ratified. At a minimum boards and managers should retain their emails containing approvals to evidence that the majority of the board members have approved a particular course of action, which may then be ratified at a board meeting. This, in my opinion, is very possible yet can be very difficult to trace or find later. To make sure a board is conducting itself with good governance, I think it would be beneficial to use a system to track activity and associated approvals. Relying on emails is challenging.
Patrick went on to explain the function and responsibilities of property management in condominium governance in part 3 of the webinar. He explained that condominium boards choose property managers to handle a number of their duties, including administrative, financial, and physical management.
There appeared to be general agreement that property managers are essential to running a condominium building or townhome complex. There was worry that owners, residents, and, in some circumstances, other board members don't treat managers as well as they ought to. Patrick emphasized that there are many constraints and circumstances at play that have put pressure on the property management sector and have led to a shortage in the number of managers available, such as:
One recommendation to boards was to allow and facilitate communication between property managers and other experts, including lawyers, accountants, engineers, reserve fund study experts, mediators and arbitrators, social workers, members of law enforcement, and representatives from industry and regulatory organizations like the CAO and CMRAO (Condominium Management Regulatory Authority of Ontario). By giving managers the support and guidance they require, condo boards are better able to fulfil their obligations to their communities.
Although the webinar was schedule for 1.5 hours, it ended up running for over 2.5 hours! Most participants stayed the entire time as it was an engaging and informative session. To sum up the entire experience of the webinar: it was a lively discussion. Plus, Patrick did a great job of answering everyone's questions while also remaining on topic and offering his (non-legal) advice on the crucial subject of governance.
