Understanding Delegation Conditions
What is Delegation in Condominium Management?
Delegation occurs when a condominium corporation assigns certain tasks to a condominium manager or management company.
Legal Restrictions on Delegation
According to the Condominium Property Regulation, a corporation may delegate any power or duty conferred on it, except the power to impose sanctions.
Cannot be Delegated:
The power to impose fines or penalties on unit owners.
Voting authority for board decisions.
Can be Delegated:
Financial management duties (e.g., bookkeeping, budgeting).
Maintenance and vendor coordination.
Day-to-day administration (e.g., handling owner inquiries, record-keeping).
Example:
A board cannot delegate the decision to fine an owner for a bylaw violation, but it can delegate the task of sending violation notices to the manager.
Evaluating Contracts for Delegation Potential
When reviewing a contract for delegation, condominium managers should look for key indicators that delegation is legally and operationally sound.
1. Explicit Delegation Clauses
Ensure that the contract clearly states which tasks can be delegated.
If delegation is not mentioned, seek written approval from the board before proceeding.
Example:
A contract that states, “The manager shall have the authority to oversee maintenance contracts but may not enter into financial agreements on behalf of the corporation,” sets clear delegation limits.
2. Bylaw Compliance
Ensure the corporation’s bylaws allow delegation.
If bylaws restrict delegation, the board must retain authority over certain tasks.
Example:
A bylaw stating, “Only the board of directors may approve financial expenditures over $10,000,” prohibits the manager from signing large contracts without board approval.
3. Scope and Limitations
Clearly define which responsibilities are delegated and which remain with the board.
Specify any financial thresholds, reporting requirements, or oversight processes.
Example:
A board delegates vendor selection to the manager but requires board approval for any contracts exceeding $5,000.
Drafting Delegation Agreements
What is a Delegation Agreement?
A delegation agreement is a formal document that outlines the responsibilities being transferred, ensuring clarity and legal compliance.
1. Clarity in Scope
Define exactly which tasks are being delegated.
Ensure there is no ambiguity about responsibilities.
Example:
Instead of stating “Manager oversees maintenance,” the agreement should specify:
"Manager is responsible for scheduling and supervising routine maintenance services, obtaining quotes, and reporting to the board for approval of major repairs over $5,000."
2. Adherence to Bylaws
Confirm that the delegation does not violate the condominium’s bylaws or governing documents.
If necessary, the board should amend bylaws before delegating responsibilities.
Example:
If a bylaw requires financial decisions to be approved by two board members, the delegation agreement cannot give the manager full financial authority.
3. Retention of Non-Delegable Powers
Clearly state that certain powers remain with the corporation.
Ensure that board oversight is maintained for critical functions.
Example Clause:
"The condominium manager may handle unit owner complaints and coordinate dispute resolution procedures, but the authority to impose fines or sanctions shall remain exclusively with the condominium board."
Best Practices for Effective Delegation
To ensure smooth delegation and compliance, condominium managers should follow these best practices:
1. Maintain Open Communication with the Board
Managers should provide regular reports on delegated tasks.
The board should review manager performance at least quarterly.
Example:The manager submits monthly financial summaries to the board, ensuring full transparency.
2. Document All Delegation Agreements in Writing
Verbal agreements can lead to misunderstandings or legal disputes.
A formal delegation document should be signed by both the board and the manager.
Example:
A board member verbally instructs the manager to approve invoices under $1,000, but later disputes a payment. A written delegation agreement would have prevented confusion.
3. Regularly Review Delegated Responsibilities
The board should periodically reassess delegation agreements.
If new responsibilities arise, the agreement should be updated accordingly.
Example:
The board expands the manager’s role to include vendor selection. The delegation agreement is revised to reflect this new authority.
