Condominium Board Governance Practices Under the CPA
Board Responsibilities Under the CPA
A condominium board is responsible for:
Managing the corporation’s financial affairs, including budgeting and reserve fund management.
Enforcing bylaws and addressing violations fairly.
Overseeing contracts for property maintenance and service agreements.
Calling and conducting meetings in compliance with CPA regulations.
Providing unit owners with timely and accurate information regarding the condominium corporation’s operations.
A board shall govern the conduct of the affairs of the corporation and may, subject to any restriction imposed by the corporation, exercise the powers of the corporation.
Best Practices for CPA-Compliant Board Governance
Maintain detailed records of board decisions and financial statements.
Adopt a code of conduct to ensure ethical decision-making.
Conduct regular audits to verify financial integrity.
Engage legal counsel when interpreting CPA requirements.
Case Study: Board Non-Compliance
A condominium board fails to provide financial statements to unit owners. How does this violate the CPA? What corrective actions should be taken?
Appointment of an Administrator Under the CPA
What is a Condominium Administrator?
An administrator is a court-appointed individual who takes over the board’s responsibilities when governance has significantly failed. This measure is typically a last resort when a board is incapable of managing the corporation effectively.
Conditions for Administrator Appointment
An administrator may be appointed if:
The board fails to call required meetings.
There is a breakdown in governance (e.g., board members resign without replacements).
The board mismanages finances, leading to financial risk for unit owners.
The board does not enforce bylaws, causing disorder within the condominium community.
Role & Powers of an Administrator
An administrator has the power to:
Manage finances, including collecting fees and approving expenditures.
Oversee board elections to restore proper governance.
Enforce bylaws to ensure compliance among unit owners.
Report to the court on the status of the condominium corporation.
Evaluating the Need for an Administrator
If a condominium board is mismanaging funds but still holding regular meetings, does it warrant administrator intervention?
Creating a Governance Framework for Board Accountability
Key Components of a Governance Framework
Clear Board Policies
Define decision-making processes.
Establish financial reporting timelines.
Set guidelines for enforcing bylaws fairly.
Manager Oversight Measures
Ensure managers only act within board-authorized limits.
Require board approval for major expenditures.
Conduct annual performance reviews for managers.
Financial Transparency Practices
Publish financial statements to all unit owners.
Maintain detailed spending records for accountability.
Hire external auditors for independent financial reviews.
Governance Checklist for Compliance
Does the board conduct regular meetings as required?
Are financial statements shared with unit owners?
Are bylaw violations handled in a consistent manner?
Does the board provide clear oversight of the condominium manager?
