What is the role of the Board of Directors in a Condo Corporation? And how are Board members selected?
In New Brunswick, condominium corporations are run by a Board of Directors as constituted by the condominium corporation’s Declaration. Board Members represent the owners of the Condominium Corporation and should be accountable to the owners. Board Members are unit owners themselves, who volunteer their time to serve on the Board. Unless specified in the Corporation’s governing documents, Board members are not usually paid for their time.
This Board is responsible for making all of the decisions regarding the Corporation’s financial, legal, administrative, and managerial matters. However, the Board may delegate some duties to an employee or professional management company, as they choose. For example, hiring a property management company to handle the day-to-day management of the property and enforcement of rules; or hiring an independent bookkeeper; or hiring a cleaner. These are common ways the Board may choose to delegate responsibilities.
The Board is responsible for enforcing the Act, Declaration, By-Laws, Common Element Rules, and other such legislation that applies within the jurisdiction in which the Corporation exists. Rule enforcement is not a popular role for most Board Members, so frequently this task is delegated to a property management company or staff member. However, the Board is responsible to ensure rule enforcement is carried out. And there are effective strategies available for fair rule enforcement that Board Members can use.
The By-Law of a Corporation outlines the roles along with the qualifications, election process, and term for Board Members. In most cases, qualifications include being a member (or legal owner of a unit); and a minimum age requirement of 19. Board Members are elected at a General Meeting of the owners and may serve a term of one to three years, depending on your By-Law requirements. An owner who is currently serving as a Board Member is normally eligible to re-offer, provided they still qualify (as above).
Most condominium corporations recruit potential Board members to stand for election. Sometimes a nominating committee will interview and select people who are interested in serving on the Board. Often terms are staggered, to ensure not all Board Members complete their terms at the same time, allowing for a good succession plan.
The Board of Directors is responsible to ensure:
- Maintenance and repairs of all common element property are completed on a timely basis.
- Payment of all invoices for common element expenses: including power, water & sewage, legal & accounting services, staff salaries, contracted services and any other expenses incurred in the reasonable maintenance of the Corporation.
- Enforcement of Common Element Rules, the By-Law, Declaration, the NB Condominium property Act, and any other legislation governing the Corporation (Public Safety, Community Planning Act, Municipal By-Laws).
- Compliance with the reporting requirements outlined in the New Brunswick Condominium Property Act. This includes providing updated copies of the Reserve Fund Study, Insurance Policy, Financial Statements, and the names of the Board of Directors to the Director of Condominiums. C-16.05-2 NB Condo Property Act, Page 52 (administrative penalties).
- An annual budget is prepared and distributed to owners in accordance with the Corporation’s By-Laws. In addition, corresponding condominium fees are to be calculated for each unit, based on the schedule entitled “Common Expenses and Common Elements”.
- Timely collection of all common element fees. This includes condominium fees, special assessment fees, charges for damage caused by an individual, fines and interest charges, as required. They are also responsible for the enforcement of rules regarding default of payment for any common element fees, damage, fines and interest charges.
- The preparation of Estoppel Certificates in accordance with the NB Condominium Property Act. C-16.05-2 NB Condo Property Act, Page 44
- To hold an Annual General Meeting and advise owners in accordance with the Corporation’s By-Laws. Adhere to the requirements of the Corporation’s By-law with regards to proper notice to owners; quorum, voting, poll votes, proxies, and voting eligibility.
- Proper arrangements for banking in accordance with the Corporations’ By-Law.
- To have a Reserve Fund Study completed according to the NB Condominium Property Act. And to have updates completed as required by the Act.
- That regular contributions to the Reserve Fund are made, as recommended by the Reserve Fund Study.
This is by no means a conclusive list of duties, but does outline the main responsibilities common to most condominiums in the province. Some Condominium Corporation’s governing documents may have other responsibilities.
What can be done to improve Condo Boards?
Owners should attend meetings, read proposals put forth by the Board, ask questions, and offer ideas and solutions. Get involved – serve on a committee, attend a seminar, and talk to condo owners in other buildings to learn about different approaches to condo management.
Board Members often rely on past experience and skills to manage their Corporation. But the condominium industry can be very different than other types of businesses. Board Members are well advised to educate themselves in condominium affairs. Better understanding of condominium financials, improved communication, more-effective implementation and enforcement of rules, and better-informed owners will create a better condo community.
There are a number of resources available in New Brunswick. 1) The Canadian Condominium Institute has a Chapter in the province. CCI offers information, education, opportunities for networking with other Board Members, and access to condominium professionals. 2) Condo-link Services provides seminars, review and clarification of your governing documents, training for initial setup of financial & administrative systems, meeting setup including voting procedures, and more.
For more information about condominium management and the responsibilities of Condominium Corporation Boards, contact Condo-Link Services — 506-455-9207 or email email@example.com