Dealing with evicted board member who refuses to step aside
Board caught in middle of this mess should review bylaws — and get the keys back
Q
I am an owner and board member in a new 24-suite condo. There is a dispute ongoing between the builder (who has a representative on the board) and another board member over the purchase of a suite. A proxy was given by the builder to the individual, who was a tenant with a deal to purchase, but the deal fell through and the board member has subsequently been evicted by the builder. The board member who was evicted refuses to resign, and the builder simply wants the individual to go away.
The rest of the board is now caught in the middle of this mess. To complicate matters, the evicted board member still has keys to the building, and the board is of the view that this is trespassing.
Since the board member no longer has a vested interest in the building, as neither an owner nor a tenant, the rest of the board wants to arrange a special general meeting of owners to remove the board member, as per the bylaws. Any tips to ensure due diligence is properly followed?
A
You find yourself in a real mess. First, take the time to review your bylaws to determine whether or not you have to be an owner to be on the board. Are tenants allowed on your board? The Condominium Property Act states at least two-thirds of the membership of the board must be owners unless the bylaws provide otherwise. What do your bylaws say?
Second, given the fact that he is neither an owner nor a tenant, I would strongly urge you to demand that he return the keys. This individual should not have access to the building.
Finally, review your bylaws to determine what process you can follow to remove a board member. Does your condominium have a property manager who is assisting you in this regard? Have you retained a lawyer to help you in the event that this individual refuses to comply with your demands?
Helpful hint: This individual, who has no interest in the building as an owner or tenant, is being disrespectful. The whole purpose of being on a board is to improve the quality of life for your fellow residents. If you cannot live up to that basic standard, then get off the board.
Q
I sit on the condo board in my building, and we have a tight budget. At the end of the year, any remaining money is put into a contingency fund and we start out the “bank” with zero. The budget that is passed allows us to do things throughout our fiscal year, but we have a cash-flow problem.
While there is money in the budget for gardening projects, for example, we cannot carry them out at the beginning of our fiscal year because we have to wait until the maintenance fees are collected throughout the year to pay the bills. This does not make sense for us in terms of when is best to buy and plant items. At our next annual general meeting I would like to discuss the possibility of keeping money in operating funds to help with cash flow. Can I do this?
A
Yes. Your condominium corporation has a unique way of budgeting that is not against the law, but puts particular stress on the overall budget for the corporation. At the next AGM you can make a motion directing the board to budget differently. You will need to come up with the proper wording for your motion, and you must ensure that you have adequate support among your fellow owners to pass such a motion. You may have to lobby your fellow owners. If the motion passes by a vote of 50 per cent plus one, then the board must follow that direction in accordance with s.28(7) of the Condominium Property Act. You should give the board advance notice of your intention to make a motion, so that it is placed on the agenda and everyone is aware of the purpose of the motion. If you just bring the motion up at the AGM, there may be some concern that the owners cannot vote on it now because other owners were not aware of this significant vote. Helpful hint: Owners have a tremendous amount of power when it comes to the direction of the condominium corporation. Boards are charged with the responsibility of making decisions on a day-to-day basis, and also make decisions that impact the corporation in the future.
If owners are not happy with that direction, they can use their power under the Condominium Property Act to direct the board otherwise.
Robert Noce, Q.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at condos@ edmontonjournal.com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances. Follow Noce on Twitter @RobertNoce.