Condo board can set eligibility terms for its directors

We have discovered that two of our five directors are not unit owners, despite our corporation’s bylaw requiring them to be owners or spouses of owners. The property manager advises that the corporation’s lawyer believes the bylaw to be unenforceable, since it contravenes the Condominium Act. Is that correct?

No. The Condominium Act permits a board to pass a bylaw setting out the required qualifications for directors. A validly passed and registered bylaw requiring a director to be a unit owner, or spouse of a unit owner, is enforceable. What can we do when our property manager tries adding new amounts to the corporation’s common expenses that are paid by the unit owners?

Budget decisions must be made by a resolution of the board of directors — and that includes the passage of, or amendment to, the condo corporation’s annual budget. It’s the directors’ jobs to ascertain the amount required to pay for the corporation’s estimated annual expenses.

The property manager may assist in the budget or amendment preparation, but the decisions must be made by the board. My condominium corporation recently signed a contract for common-element roof replacement work. The property manager signed the contract on the authority of the board president, who maintains he had the authority to do so because the work is regular maintenance. Is the president correct?

No. Approval of the work, and of the contract, required resolutions of the board. Any person signing a contract on behalf of a condominium corporation must have actual authority from the board of directors, in the form of a resolution, to do so. If a president of a condo board is terminated unanimously by the board members and fails to resign, what is the board’s next step?

An officer, such as the president, may be removed from office by a vote of the quorum of the board. While the board may remove an officer, it can only remove a director in limited circumstances.

The corporation may have a bylaw requiring directors to abide by certain ethical requirements. The bylaw may provide that in the event of a serious or repeated breach of those requirements, the directors may vote to remove the offending director — provided that the director is given the opportunity to present arguments as to why he or she should not be removed. The Condominium Act requires the annual general meeting to be held within six months of the corporation’s year-end, which, in our case, would be by the end of June. Our board advised the meeting has now been delayed because the former property management company failed to provide the auditors with the necessary financial information. What should be done? What are the repercussions for not holding the AGM in time?

The board should take all necessary steps to enable the annual general meeting to be held, including, if necessary, a court application for an order requiring the former property manager to provide the required financial information.

The Condominium Act provides that even if directors’ terms expire, the directors continue in office until their successors are elected. That will minimize any further repercussions as the board remains in office. Lawyer Gerry Hyman is a former president of the Canadian Condominium Institute and author of Condominium Handbook. Send questions to gerry@gerryhyman.com or fax 416-449-7071.