Key Responsibilities Under the Condominium Property Regulation
The Condominium Property Regulation outlines the duties and authority of the board of directors, who act as the governing body of the condominium corporation.
WHAT YOU'LL LEARN
Key Responsibilities Under the Condominium Property Regulation
How Managers Support Compliance
Fiduciary Duties of Condominium Managers
Scenarios for Evaluation
Key Responsibilities Under the Condominium Property Regulation
The Condominium Property Regulation outlines the duties and authority of the board of directors, who act as the governing body of the condominium corporation.
General Duties: The board of a corporation must control, manage and administer the real and personal property of the corporation and the common property.
Acting in the Best Interests of the Corporation: The members of the board must act honestly and in good faith and exercise the care, diligence, and skill of a reasonably prudent person.
Key Governance Areas:
Financial Oversight: Approve budgets, oversee reserve funds, and ensure proper financial reporting.
Example: Boards are responsible for ensuring the condominium manager maintains accurate financial records and provides them to owners upon request.
Property Maintenance: Ensure common property is adequately maintained and repaired.
The corporation must maintain and repair (or replace) its real and personal property to ensure its value and function.
Decision-Making: Make decisions on behalf of the condominium corporation in areas such as rule enforcement, contractor selection, and major capital projects.
How Managers Support Compliance
Condominium managers help boards fulfill these responsibilities by providing expert guidance, operational support, and administrative services.
Providing Expert Advice:Managers guide boards on legislative requirements, ensuring decisions align with the Condominium Property Regulation.
Example: Managers may advise on proper financial management practices to ensure compliance with reserve fund requirements.
Handling Administrative Tasks:Managers organize and maintain corporate records, prepare budgets, and coordinate meetings.
The manager ensures that notices for annual general meetings and board meetings are sent in accordance with the regulation’s requirements.
Fiduciary Duties of Condominium Managers
Fiduciary Responsibilities Under the Real Estate Act Rules
The Real Estate Act Rules establish specific fiduciary duties that condominium managers owe to their clients (the condominium corporation).
Acting Honestly and in Good Faith:A licensee must act honestly and in good faith in the best interests of the client.
Duty of Care:Managers must exercise reasonable care and skill in performing their duties.A licensee must exercise reasonable care and skill in providing condominium management services.
Avoiding Conflicts of Interest:Managers must avoid conflicts of interest and disclose any potential conflicts to the condominium board.A licensee must immediately disclose to their client any conflict of interest.
Practical Applications of Fiduciary Duties
Example 1: Avoiding Preferential Treatment in ContractingA condominium manager must not recommend contractors who provide personal incentives (e.g., gifts or kickbacks) as this violates their fiduciary duty to act in the best interests of the condominium corporation.
Action Required: Disclose any potential conflicts and recommend contractors based solely on merit and cost-effectiveness.
Example 2: Protecting Financial InterestsA condominium manager must ensure that all funds are properly accounted for and disbursed only for approved purposes.
Action Required: Reconcile trust accounts monthly and provide financial updates to the board.
Scenarios for Evaluation
Governance Scenario
Scenario:
A condominium board fails to maintain adequate reserve funds, resulting in a cash shortfall when major roof repairs are required. How should a condominium manager intervene to support compliance?
Key Steps:
Review the Condominium Property Regulation requirements for reserve funds.
Advise the board on strategies to rebuild the reserve fund, such as implementing a special assessment.
Coordinate with financial professionals to provide accurate reporting to owners.
Fiduciary Duty Scenario
Scenario:
A contractor offers a condominium manager a gift card in exchange for recommending their services to the board. How should the manager respond?
Key Steps:
Immediately disclose the conflict of interest to the board.
Reject the gift and recommend contractors based solely on their qualifications and bid competitiveness.
Document all recommendations and decisions for transparency.
