Understanding Self-Regulation and Board Obligations
Transparency and compliance with legal and ethical obligations are foundational to maintaining trust between the board and unit owners.
WHAT YOU'LL LEARN
Self-Regulation and Board Obligations
Registration and Disclosure Requirements
Creating a Compliance Checklist for Condos
Understanding Self-Regulation and Board Obligations
Transparency and compliance with legal and ethical obligations are foundational to maintaining trust between the board and unit owners.
Under the CPA, the board of directors is legally required to:
Act honestly and in good faith.
Exercise the care, diligence, and skill of a reasonably prudent person in carrying out their duties.
Transparency is a key element of self-regulation. For example, the board must provide owners with clear and timely financial disclosures, updates on major decisions, and access to meeting minutes. This level of openness ensures that owners are informed and confident in the board’s ability to manage the condominium corporation responsibly.
Key Aspects of Self-Regulation
Accountability: Boards must be accountable for decisions impacting owners, including budgets, bylaw enforcement, and major projects.
Transparency: Boards must disclose key information, such as financial statements and capital reserve fund plans.
Compliance: Boards must ensure compliance with the CPA, bylaws, and rules, and take proactive steps to address breaches.
Registration and Disclosure Requirements
The CPA outlines the obligation for the condominium corporation to register with the Land Titles Office upon its creation. This registration formalizes the corporation’s legal existence.
Once registered, the board must meet ongoing disclosure and reporting obligations, including:
Providing annual financial statements to owners.
Maintaining a capital reserve fund report as required under the CPA.
Updating the corporate registration with changes in board members or the registered address.
The board must also ensure compliance with other reporting requirements, such as submitting documents to courts or stakeholders when disputes arise.
Practical Application
Scenario:
A newly elected condominium board realizes that the previous board failed to provide financial disclosures to owners.
Task: Identify the steps the new board must take to fulfill their obligations under the CPA.
Expected Outcome: Determine the appropriate process for preparing financial reports, and issuing them to owners to restore transparency.
Creating a Compliance Checklist for Condominium Corporations
To ensure legal and regulatory adherence, a condominium board must implement a compliance checklist that covers essential obligations.
Here is a sample checklist to guide boards:
1. Registration Requirements
Confirm the corporation is registered with the Land Titles Office.
Update the corporate registry with changes in directors or registered address.
2. Financial Reporting Obligations
Prepare and distribute the annual financial statements to owners.
Maintain an up-to-date capital reserve fund study.
Ensure proper accounting practices for condominium fees and expenses.
3. Bylaw and Rule Enforcement
Ensure bylaws comply with the CPA.
Document enforcement actions for bylaw breaches.
Inform owners of any changes to rules at least 30 days in advance (per the CPA).
4. Transparency and Communication
Provide owners access to meeting minutes.
Communicate major decisions, projects, or fee changes promptly.
Schedule annual general meetings (AGMs) and distribute meeting notices per CPA timelines.
5. Legal Compliance
Consult legal professionals as needed to ensure compliance with the CPA.
Resolve disputes using approved mechanisms such as mediation or arbitration.
Activity: Policy Development
Task: Create a professional compliance checklist for a hypothetical condominium corporation. Ensure the checklist includes items related to registration, financial disclosures, bylaw enforcement, and transparency.
