Understanding the Legal Scope of Authority
Definition of a Condominium Manager’s Authority
A condominium manager is licensed under the Real Estate Act and is responsible for assisting the condominium board with financial, administrative, and operational tasks. However, managers do not have independent decision-making authority; they must act under the board’s direction and within legal limits.
What a Condominium Manager Can Do
Provide financial reports and assist with budgeting.
Enforce bylaws at the direction of the board.
Coordinate maintenance and repairs as authorized.
Organize board meetings and AGM notices.
Keep records of corporation documents and communications.
What a Condominium Manager Cannot Do
Make independent financial decisions (e.g., approving expenses beyond delegated authority).
Sign contracts on behalf of the board unless explicitly authorized.
Amend or create new condominium bylaws.
Sell or lease condominium property.
A condominium manager must act in the best interests of the condominium corporation and ensure compliance with the Condominium Property Act and its regulations.
Analyzing Real-World Scenarios of Exceeding Authority
Common Situations Where Managers Exceed Their Authority
Unauthorized Spending – A manager approves a major repair without prior board approval.
Bylaw Enforcement Overreach – A manager issues fines for bylaw violations without following proper procedures.
Contract Mismanagement – A manager signs a service contract without board authorization.
Neglecting Owner Requests – A manager denies access to documents that unit owners are legally entitled to view.
Consequences of Exceeding Authority
Legal action against the condominium corporation.
License suspension or fines from the Real Estate Council of Alberta (RECA).
Financial losses due to unauthorized expenditures.
Board-manager disputes, leading to termination of the management agreement.
Case Study: Unauthorized Repair Expenditure
A condominium manager authorizes emergency repairs costing $15,000 without consulting the board. The corporation’s bylaws require board approval for expenditures over $10,000.
Question:
Was this action within the manager’s authority?
What could the manager have done differently to remain compliant?
Evaluating Governance Structures for Compliance
How Condominium Boards Ensure Manager Compliance
Clear Written Contracts – Management agreements must outline the manager’s scope of authority.
Board Resolutions & Policies – The board should formally approve all major decisions in writing.
Regular Financial Oversight – The board should review all financial statements and expense approvals.
Mandatory Meetings – Monthly board meetings should ensure managerial actions align with board directives.
Best Practices for Preventing Overreach
Board training – Educate board members on their responsibilities to oversee management properly.
Defined spending limits – Establish clear financial thresholds for management expenditures.
Audits & compliance checks – Conduct regular reviews of management actions to ensure legal compliance.
Governance Self-Check: Is Your Condominium Board Managing Its Manager?
Does the board have clear spending approval limits?
Are board meeting minutes properly recorded?
Does the manager receive legal guidance when needed?
