Identifying Board Overreach and Available Remedies
What Constitutes Board Overreach?
A condominium board must act within the authority granted by the Condominium Property Act (CPA), its bylaws, and applicable legislation. Overreach occurs when a board:
Makes decisions beyond its legal authority.
Fails to follow procedural requirements for decision-making.
Ignores or misapplies bylaws or legislative requirements.
Acts against the best interests of the condominium corporation.
Examples of Board Overreach
Imposing unlawful fees or penalties on unit owners.
Withholding financial records from owners despite legal disclosure requirements.
Awarding contracts without following procurement rules in the bylaws.
Judicial and Non-Judicial Remedies
Non-Judicial Options (Internal Resolution Methods)
Board Discussions: Raise concerns directly with the board in meetings.
Requesting an Special General Meeting (SGM): Owners can call an SGM to discuss and vote on governance concerns.
Engaging Legal Counsel: A condominium manager may advise the board or unit owners to seek legal consultation.
Dispute Resolution Mechanisms: Mediation and arbitration can be used for resolving governance disputes without court action.
Judicial Remedies (Legal Action Options)
Court Applications: Owners or affected parties may apply to the Court of King’s Bench to overturn an unlawful board decision.
Court-Appointed Administrator: If the board’s actions severely disrupt operations, the court may appoint an administrator to temporarily manage the condominium.
Bylaw Review and Legal Challenges: The court may invalidate unlawful bylaws or decisions that contradict the CPA.
Legislative Reference: The Condominium Property Act allows a unit owner or interested party to apply to the Court of King’s Bench if the board fails to comply with the Act, regulations, or bylaws of the corporation.
Procedural Steps to Challenge a Board’s Unlawful Actions
Step 1: Gather Evidence of Overreach
Before initiating any formal challenge, the condominium manager should:
Review the Condominium Property Act, bylaws, and applicable regulations.
Document the board’s decisions and compare them to legal requirements.
Obtain written communications, board minutes, or notices that support the claim.
Step 2: Attempt Internal Resolution
Raising the Issue with the Board
Prepare a formal written request to the board outlining the concern.
Request the board reconsider or amend the decision voluntarily.
Suggest the board call a Special General Meeting (SGM) to get owner feedback.
Step 3: Seek Mediation or Alternative Dispute Resolution (ADR)
Using Mediation or Arbitration
The Condominium Property Act allows disputes to be handled through arbitration under the Arbitration Act.
ADR may be faster and less costly than court proceedings.
Step 4: Initiate Legal Action if Necessary
Applying to the Court of King’s Bench
If internal resolution fails, a formal legal application can be made to the court.
The court may overturn board decisions, appoint an administrator, or enforce compliance with the CPA.
Legislative Reference: The CPA permits a condominium corporation, owner, or interested party to seek a judicial remedy if a board fails to fulfill its legal obligations.
Analyzing Real-World Cases of Board Overreach
Case Study: Financial Mismanagement
Scenario: A condominium board increases condominium fees by 25% without providing financial justification or following required approval processes.
Analysis:
The CPA requires boards to provide owners with detailed financial statements.
Owners may call an SGM to request financial transparency.
If the board refuses, a legal application for financial disclosure may be required.
Best Resolution: First attempt internal resolution, then alternative dispute resolution, and finally, court action if necessary.
Creating a Procedural Guide for Responding to Board Overreach
Developing a Standardized Approach
Define Common Violations: Identify potential areas of board overreach.
Establish a Reporting Procedure: Who should report issues (managers, owners, legal advisors)?
Determine Resolution Steps: Outline internal resolution, mediation, and judicial options.
Document All Actions Taken: Ensure detailed records are kept in case legal action is required.
Procedural Guide Development
Scenario:
A condominium board implements a bylaw restricting owners from using certain common areas without a legally valid reason.
Your Task:
Identify if this action is lawful or an overreach.
Determine the best non-judicial approach to resolve the issue.
Outline the steps to take if legal intervention is required.
Correct Answer:
The board’s decision likely violates the CPA’s regulations on common area access.
The best initial approach is internal resolution through formal discussion and an SGM.
If unsuccessful, the next step is seeking arbitration or court intervention.
