CONDO OWNERS SURPRISED TO DISCOVER NEW INSURER, NEW PROPERTY MANAGER
Q I live in a condominium complex for people over the age of 55. The board neglected to notify owners of a change in the insurance company and deductible. The new insurance certificate was not provided to owners. Further, the board changed management companies with no notification to owners. We found out about the change when we received the information package from the new management company requesting our banking information. The owners are upset, but where do we take our concerns? Bylaws are not enforced and those who demand change are bullied, disrespected and criticized. Please help!
A In accordance with the Condominium Property Act and the bylaws of the condominium corporation, the board is responsible for carrying out the functions and duties of the corporation. Therefore, the board has the power to find a new insurance company and make the appropriate changes to the deductible to suit the needs of the condominium corporation and owners. This, of course, assumes that the board is doing its due diligence and is acting in good faith. The board should inform the owners immediately of any change in insurance and provide the owners with an updated certificate of insurance. As always, communication is key.
Further, the board is well within its powers to negotiate and enter into an agreement with a new property management company without advising or involving the owners.
The Condominium Property Act is clear that condominium corporations (through their boards) have a positive legal duty to enforce their bylaws.
The case law with respect to bylaw enforcement further clarifies the extent of that duty, and how condominium corporations may take enforcement action while at the same time remaining fair and balanced with respect to the interests of the affected/offending owner(s). Specifically, a condominium corporation is required to follow an incremental approach, to ensure owners are given a fair and proper opportunity to come into compliance before the condominium corporation is entitled to take more significant steps such as a court application for an order to enforce bylaw compliance.
If owners are not happy with the board, they have several options available to them to make changes within the condominium complex. First, they could organize an extraordinary general meeting to replace the board with new members. Condominium boards may be required to convene meetings where a petition of owners gathers sufficient support to compel them to do so (see s. 30.1 of the Act). Second, owners can wait until the next annual general meeting to elect a new board. Third, if the board is not complying with the law, an owner or owners can make a court application alleging improper conduct on the part of the board. The court has wide discretion and may grant any order that the court considers appropriate in the circumstances. The court application route can be expensive. I should also point out that the Government of Alberta is looking at creating a condominium dispute resolution tribunal that may deal with some of the issues you have raised in your question.
Helpful Hint: All condominium corporations in Alberta must have a board of directors. Every member of a board, in exercising their powers and performing their duties, must act honestly and in good faith with a view to the best interests of the condominium corporation, and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Roberto Noce, Q.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at albertacondolaw@millerthomson. 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 at @ Robertnoce.