Acting on Behalf of a Condominium Corporation

How a Condominium Board May Act and Speak on Behalf of a Condominium Corporation

A condominium board is responsible for managing the condominium corporation’s affairs, ensuring financial stability, enforcing bylaws, and maintaining common property. The Condominium Property Act (CPA) grants the board the authority to act on behalf of the corporation, making decisions in the best interest of unit owners.

Key Responsibilities of a Condominium Board:

1. Governance & Decision-Making

   • Act as the legal representative of the condominium corporation.

   • Make decisions on financial matters, maintenance, and enforcement of bylaws.

   • Hire and oversee condominium management companies, contractors, and service providers.

     
     

2. Financial Management

   • Manage operating and reserve funds.

   • Approve and collect condominium fees.

   • Allocate funds for building maintenance and repairs.

     
     

3. Speaking on Behalf of the Corporation

   • The board may issue official statements, newsletters, or notices to owners.

   • The board may not act on personal opinions—all communications must reflect official board decisions.

Legislative Reference:

A corporation is responsible for the enforcement of its bylaws and the control, management, and administration of its real and personal property and the common property. A condominium board acts collectively and speaks as a unified entity, ensuring that decisions align with the CPA and the corporation’s best interests.

Authority and Limitations of a Condominium Board

While a condominium board has broad powers, it must operate within the legal framework set out in the Condominium Property Act (CPA) and the corporation’s bylaws.

Authority of a Condominium Board

• Entering Contracts: The board may sign agreements for condominium management, maintenance, and legal services.

• Setting & Enforcing Bylaws: The board can create and enforce condominium bylaws governing owner behavior and common property usage.

• Financial Oversight: The board can set budgets, approve expenses, and collect condominium fees.

Limitations of a Condominium Board

• Cannot Act Outside the CPA or Bylaws: The board cannot make decisions that violate legislation or the corporation’s bylaws.

• Cannot Make Individual Decisions: Board members must act as a collective body—no individual director has unilateral authority.

• Cannot Discriminate or Abuse Power: The board cannot selectively enforce rules or unfairly target unit owners.

Conflict of Interest Rules

• Board members must disclose conflicts of interest when making decisions.

• The CPA prohibits board members from personally benefiting from board decisions unless properly disclosed and approved.

Consequences of Exceeding Authority

• If the board oversteps its authority, unit owners may:

  • Pursue legal action against the corporation.

  • Request an audit or removal of board members at a general meeting.

Key Takeaway:

The board’s authority is not unlimited—all actions must comply with the CPA, the corporation’s bylaws, and ethical governance standards.

Proper Procedures for Board Communication and Decision-Making

To ensure compliance with legal obligations, a condominium board must follow structured procedures when making decisions and communicating with stakeholders.

Decision-Making Process

1. Hold Regular Board Meetings

   • Meetings must be properly scheduled, documented, and minuted.

   • A quorum (minimum number of directors) must be present to vote.

2. Follow Voting and Approval Protocols

   • Major decisions (e.g., bylaw changes, budget approvals) must be voted on by the board.

   • Some decisions may require owner approval at a general meeting.

3. Maintain Transparency

   • All decisions must be recorded in meeting minutes.

   • Owners should receive timely updates on significant decisions.

Proper Communication with Owners and Third Parties

Application Exercise

• Scenario: The board needs to approve a $50,000 maintenance contract.

• Question: What steps must be taken to ensure the decision complies with legal obligations?

  
  

Answer:

• Obtain multiple bids.

• Discuss at a board meeting with quorum.

• Vote and document the decision in meeting minutes.

• Communicate the decision to unit owners upon request.

Key Takeaway:

Condominium boards must follow structured decision-making processes to ensure legal compliance, financial accountability, and transparency.

Case Studies: When a Board Exceeds Its Authority 

Case Study 1: Unauthorized Special Assessment

Scenario:

A condominium board imposed a $5,000 special assessment on unit owners without holding a vote or consulting owners. The condominium corporation's bylaws requires an ordinary resolution of the owners before a special assessment can be levied. Several owners challenged the decision.

Legal Issues Identified:

• The CPA requires board decisions involving financial contributions to follow proper approval processes.

• The board failed to provide proper notice and justification.

  
  

Consequences:

• Owners filed a legal challenge, forcing the board to reverse the assessment.

• The board faced audit requests and resignations due to loss of trust.

  
  

Lessons Learned:

• Boards must follow financial decision-making procedures and obtain necessary approvals before imposing fees.

Case Study 2: Board Member Speaking Unilaterally

Scenario:

A board member publicly criticized an owner in an email, claiming the owner had violated bylaws before an official review was conducted. The owner filed a formal complaint.

Legal Issues Identified:

• The board member acted outside their authority, issuing statements not approved by the board.

• The condominium corporation became legally liable for defamation.

  
  

Consequences:

• The corporation settled a legal dispute, incurring financial penalties.

• The board introduced new policies on official communications.

  
  

Lessons Learned:

• Board members must speak collectively—no individual director may act alone.

• Legal risks arise when boards fail to follow structured communication procedures.