Ontario Condo Law Blog : Toronto Condominium Lawyer & Attorney : Gardiner Miller Arnold Law Firm : Ontario, Ottawa, Hamilton, Kitchener

Here is this months’ instalment of condo-related goodies from around the blogosphere.

Top 10 Issues for 2010 and Beyond…. – Here’s a list of issues that associations are going to face this year and in the near term, courtesy of the Community Association Considerations blog.

ROC Presidents Must Vote at Board Meetings – Florida law blogger Scott Gordon helps shatter the misconception that association presidents can’t vote and explains how Robert’s Rules of Order is often misinterpreted.

Elections in HOAs and Condos - Can the Board Endorse Candidates? – California condo law guru Beth Grimm tackles this issue head-on. 

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The following guest post is by Athena Mailloux, a fraud examiner at ZAP Consulting Limited. Athena shares some practical solutions to help condo directors keep their new years’ resolution to be vigilant against fraud.

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Whether you are a large business corporation or a sole proprietorship you can never be too cautious when it comes to protecting against fraud. Condominium corporations have no less of a responsibility in protecting against fraud than a publicly traded company. In fact, condo corporations are often relatively small, close-knit communities that may lack stringent internal controls and thus be more susceptible to fraud.

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A February 2009 decision of the Alberta Court of Queen’s Bench should be added to the list of notable condo cases for 2009. Check out Dykun v. Cravenbrook Condominium Corporation No. 032 1893.

After changing managers on December 1, 2007, the condominium’s board discovered that the previous manager had improperly withdrawn money from the reserve fund to pay operating expenses, leaving the corporation on the brink of insolvency.

Two months later, the board announced that it was levying a special assessment to raise the money necessary for the corporation to continue operating and to replenish the reserve fund.

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With autumn now underway, Annual General Meeting (“AGM”) season is upon us.  I'm often asked to chair my condominium clients’ AGMs and I look forward to meeting face-to-face with the boards, owners and managers I've worked with during the year, mostly by phone, email or letter.  

More than that, I especially enjoy being part of a meeting where members of a condominium with difficulties band together to overcome those problems and move forward as a more united community.  Those experiences are among the most personally rewarding in my line of work.

Aside from the social call, it's often useful for condos to ask their lawyer to be chair of the AGM because many directors are not comfortable with public speaking or may not know how to navigate the procedural pitfalls that may arise.   Further, having an objective person at the helm can diffuse much of the tension that typically arises and gives greater sense of confidence and fair play to everyone present, particularly if there is a hotly contested election or vote on an issue. 

Not everyone feels that way, however, and if this year is like every other year, I will probably be asked the following question at one or more of the meetings where I'm the chairperson:

“You’re the condo corporation’s lawyer and you’re paid from our common expenses, so don’t you act for us owners?”

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In December 2008, the Supreme Court of Canada released written reasons for its ruling in the landmark case of BCE Inc. v. 1976 Debentureholders, 2008 SCC 69 (CanLII).  This important case discusses directors' duties and the application of the oppression remedy in business corporation law. Because these business law concepts are applicable to condominium law, the Court’s decision in the BCE case contains important lessons for condominium directors.

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Daniel Zimberoff at the Northwest Condo & HOA Law Blog makes the excellent suggestion that condo boards should set up discrete email accounts for key officers.   These accounts (example: ycc123treasurer@yahoo/gmail/rogers.ca) would pass from person to person that assumes the role.  

He gives a number of compelling reasons that merit your attention.    I would just add one more: 

#8 -- Most free email accounts provide plenty of storage space and offer search capability, allowing users to sort, store and retrieve important documents.   Directors can work remotely and have constant easy access to records and documents without the need to refer to a paper file.  

A further comment:   The concept of using discrete email accounts for the condo's officers makes tremendous sense, but its practicality and success depend on the goodwill of the officers using the accounts and the good sense of those that subsequently inherit the accounts.   Officers using the accounts must agree to surrender the email account at the end of their tenure.   The incoming officers must ensure that the email account is secure by changing the password and by disabling any mail-forwarding features set up by the previous account holder.    Such issues could probably be dealt with by simple amendment to the board's policies.

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