What is a Condominium Corporation?
A condominium corporation is a legal entity created upon the registration of a condominium plan. It is responsible for the management and operation of common property and shared assets within the condominium. The corporation is composed of all unit owners and is governed by the Condominium Property Act (CPA).
Key Features of a Condominium Corporation:
It is automatically created when a condominium plan is registered.
It operates as a legal entity, separate from individual owners.
Its primary responsibility is managing and maintaining common property on behalf of all unit owners.
Legal Obligations of a Condominium Corporation
A condominium corporation must comply with various legal responsibilities outlined in the Condominium Property Act and Condominium Property Regulation. These obligations include:
Maintenance and Repair Responsibilities
A condominium corporation is responsible for maintaining, repairing, and replacing:
Common property (e.g., hallways, elevators, lobbies, roofs, shared plumbing and electrical systems).
Exclusive-use areas if specified in the corporation’s bylaws.
Structural components of the building that impact safety and habitability.
If a corporation fails to maintain common property, it may be in violation of the CPA.
Financial Management Responsibilities
The corporation must:
Establish and maintain an operating fund and reserve fund.
Collect condominium fees from owners to cover maintenance and repairs.
Prepare an annual financial report and disclose it to owners.
Ensure financial transparency and avoid misuse of funds.
Failure to maintain proper financial records can result in legal penalties under the CPA.
Governance and Compliance Responsibilities
A condominium corporation must:
Follow its bylaws and the Condominium Property Act.
Hold annual general meetings (AGMs) and allow unit owners to vote on key issues.
Maintain insurance coverage for common property.
Enforce rules related to common property use and resident behavior.
Identifying and Addressing Non-Compliance
Condominium corporations may be non-compliant if they fail to meet the legal obligations outlined above. Below are common violations and corrective actions:
Non-Compliance Issue | Legislative Violation |
Failure to repair leaking roofs or broken elevators | CPA, Section 37 (duty to maintain and repair) |
Delayed or missing reserve fund study | CPA, Section 38 |
Misuse of reserve fund (e.g., using it for daily expenses) | Condominium Property Regulation, Section 23 |
Failure to disclose financial statements to owners | CPA, Sections 30 and 44 |
Ignoring resident complaints about safety hazards | CPA, Section 37 |
Non-Compliance Issue | Corrective Action |
Failure to repair leaking roofs or broken elevators | Board must immediately arrange for repairs and update owners on the timeline. |
Delayed or missing reserve fund study | The corporation must conduct a reserve fund study every five years and ensure adequate funding. |
Misuse of reserve fund (e.g., using it for daily expenses) | Funds must only be used for major repairs/replacement of common property. The board must return funds if misused. |
Failure to disclose financial statements to owners | The board must provide financial statements annually and allow owners to review records. |
Ignoring resident complaints about safety hazards | The corporation must address safety concerns promptly and document corrective actions. |
Scenario-Based Application:
Imagine that a condominium corporation has not repaired a broken heating system in a common area for several months, despite multiple complaints from owners.
What steps should a condominium manager take?
Confirm whether the repair falls under the corporation’s responsibility.
Review the CPA and CPA Regulations to ensure compliance.
Notify the board of directors and document the issue.
Advise the board on potential penalties for non-compliance.
Coordinate repairs and communicate the timeline to owners.
