Li­a­bil­ity de­pends on com­plaint

Calgary Herald - Calgary Herald New Condos - - New Condos - LES VANDOR

Ques­tion: Are in­di­vid­ual con­do­minium board mem­bers per­son­ally li­able for the var­i­ous acts and de­ci­sions they make while hold­ing of­fice?

— E.D. An­swer: Li­a­bil­ity de­pends on the na­ture of the com­plaint or prob­lem.

For ex­am­ple, if the park­ing garage col­lapses on a vis­i­tor’s car, a sub­se­quent judg­ment against the cor­po­ra­tion is con­sid­ered a judg­ment against each owner.

Since direc­tors are own­ers, each would be li­able, but only for his or her pro­por­tion­ate share as a unit owner.

A judg­ment for un­paid wages is treated the same, al­though un­der cor­po­rate law, direc­tors may have to bear the cost without re­im­burse­ment from the other unit own­ers.

Direc­tors can get out of this type of per­sonal li­a­bil­ity if their ac­tions were based on ad­vice they re­ceived from an in­de­pen­dent pro­fes­sional, such as an en­gi­neer, ac­coun­tant or lawyer.

Many cor­po­ra­tions buy direc­tors in­sur­ance to cover per­sonal li­a­bil­ity.

The cost of this cov­er­age is paid by the cor­po­ra­tion and, ul­ti­mately, by ev­ery owner through their condo fees.

In­sur­ance, how­ever, will not cover an ex­ec­u­tive mem­ber if one of them as­saults an owner or com­mit acts out­side of his or her du­ties as a di­rec­tor.

Ques­tion: Have you ever heard of a po­si­tion called di­rec­tor at large on a con­do­minium board?

I have heard of it on some com­pany boards, but never in a condo com­mu­nity. In my project, the di­rec­tor was not even elected.

What are your thoughts about this sit­u­a­tion?

— M.A. An­swer: A di­rec­tor of a con­do­minium cor­po­ra­tion must be a unit owner and must be elected by the own­ers.

The board can as­sign ti­tles and re­spon­si­bil­i­ties to each di­rec­tor.

It mat­ters not whether they are called direc­tors or direc­tors at large. The key is that they are elected and do their job.

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