CCI Huronia Town Hall
From our directors, for our directors...
At our CCI Director’s Course, we had a Town Hall which allowed people to pose questions on their mind as directors. Our panel of Debbie Dale of Muskoka Condo Services, Kristeen Shannon of Bayshore Property Management, Richard Murray, a Condo Director (Town House and Multistorey) and Peter Walpole, a Condo Director (Multistorey) of gave the audience practical and experienced reflection with the help of our moderator Sonja Hodis. Here is an excerpt of some of the questions asked and the answers provided:
How many master keys should be in the care and control of individuals?
There is no law governing the number of keys. However, the Corporation should manage the risk exposure from key possession. Accordingly, the Corporation should make sure that the master key is in the master key box at the front of the building in the case of emergency. All people with access and use to the key should be bonded and be held liable for the use of the key.
It is important to know when you have the right to use the Master Key and have those who have access to the key acknowledge their responsibility with respect to the same.
Where there may be no master key, it is still key to ensure access to a unit. Accordingly, unit owners must be notified by the Board of Directors, via management, to provide a copy of the unit key to the board. Similarly, all keys must be held in an organized and secured fashion, access should be limited and parties with access should be bonded and sign a written set of obligations.
Emergency preparedness is important in protecting the Corporation. How does a Corporation deal with this?
First the Board should identify what emergencies may arise in the condominium community, what risks need to be managed and then what strategies must be implemented. This should be formulated into a plan or plans such as a disaster recovery plan, fire safety plan, evaculation plan, power failure plan etcetera. Then elements of the plan must be focused upon such as:
- Emergency lighting is for a specific purpose and thus must be designed to thing about managing the practical realities of the community. There are companies that help develop customized solutions and it is a wise investment.
- Emergency preparedness would include the education of unit owners. Fire prevention officers and fire safety companies can help with developing the fire safety plan and communication with the unit owners.
- Have the emergency plan available to the Fire Department. And correct it if it is not correct. Have it updated periodically. Liable yes, but if you follow the plan and it has been provided by a professional.
It is important to remember that the corporation is the Occupier for liability purposes.
Can we offer other services for which HST is chargeable and claim back the HST?
Condominium can have an account if the condo corporation provides a taxable supply. However, you should speak to the auditor for the Corporation to discuss the attraction of tax liability and with the Corporation’s solicitor to determine if the scope of services are within the authority of the Corporation. Condominium Corporations are statutory creatures which do not have the same authority and powers as natural persons and fall within different tax rules as non-for-profit organizations.
How do we deal with the following unauthorized alterations:
- Changing a laminate counter top
- Changing a shower head
- Cable outlet installed
First, check with and use the condominium documents. Then check with the board and management on the actual procedure for altering a unit. While some documents will permit aesthetic changes, but as one board member pointed out: what is aesthetic to one may be a major renovation to another. Therefore, boards can put out guidelines, for example interior paint colour does not need to be approved but exterior paint colour does but generally all renovation ideas should be presented by the boards and you should give the board a reasonable timeline in which to approve the same.
Further, most boards need the renovation to be explained so as to understand if there is any impact on the common elements. For example, installing a door between the garage and the interior of a townhouse may appear to be in the boundaries of the unit but if the door is not properly supported with a lintel, it could cause damage to the roof joists and trusses, which are usually common element. The board needs to understand the implications to the Corporation: plumbing, electrical changes to the common element and should require third party approvals such as building permits etcetera. Current WSIB coverage of service providers is also important. The Board has to inform unit owners and create a culture of awareness through communication about renovations. Just because it is in the unit does not mean that it does not impact the common elements. Practically, all changes should go to the board.
Do you have to get approval for everything? Not necessarily approval but it is important for the board to understand and assess the actual renovation and the board can even say that no approval is needed. So better be safe than sorry.
Where there is an alteration to the common elements a Section 98 agreement will be required and until one is in place the same is according to the Act, not binding. Where a corporation agrees that everyone or nearly everyone is entitled to make certain changes, i.e. install a mailbox on the common element brick cladding, bulk Section 98 Agreements may be put in place to save time and money.
What do you do as property manager or board to protect against fraud?
It was suggested that:
- all cheques require two signatures which may or may not include the property manager but must be at least one board member.
- All cheques must be backed up with invoices at the time of execution of the cheque.
- The board should regularly receive in their board packages a current copy of the bank statement with a copy of the general ledgers to be able to connect the dots on the financial package from management and the banking statement of the corporation. This should include getting a currently dated statement from a third party confirming where the RESERVE fund is being held.
- No online banking should be permitted.
- The corporation should have limited access to its records and its computers should have security codes on pc and may even require back up offsite.
- Any projects over a fairly modest amount, have specifications done by engineer and tender the same with a minimum of three tenders. Check all references.
- Review Bank statement reconciliations.
- Have an auditor who is adequately qualified and experienced to do a condominium audit do the audit for the unit owners. Auditors work for unit owners not the board of directors. The directors may obtain the resumes of the auditor but the unit owners must appoint the auditor as their representatives.
- Ensure that directors disclose all conflicts of interest under section 40 of the Act to the board of directors and respond as directed under the Act.
What happens when a corporation faces large unexpected capital expenditures?
Do not expect public funding. There are lenders in the market now that have loan facilities for condominium corporations.
We heard from directors that there are government grants or rebates for siding. Here is a link that may help you track down energy savings in your neighbourhood: https://saveonenergy.ca/Find-Programs-in-My-Area.aspx?ReturnURL=/Home/Contacts.aspx
Is there a standard management contract in the industry?
NO but the “management contract” has developed industry standards. When your lawyer reviews the same, they should be readily available to identify the absence of the same in a contract.
PEOPLE, PETS AND PARKING
Poop and scoop
How to deal with people who allow their animals to defecate on the common elements and not clean up.
Since it is not the responsibility of the staff of the Corporation to clean up after unit owner pets, our panel suggested:
- Notifying unit owners that there will be an extra cost which will be charged back to the unit owner or will be paid collectively by all unit owners.
- Have a company find the culprit
- Chargeback for costs incurred to the owner
- Communicate the obligation to pick up
How does a community deal with owners who have visitors that stay for nights and days at a time in the visitor parking?
- Create a rule for visitor parking registration
- Let everyone know that the Corporation has a tag and tow policy;
- Hire a towing company;
- Have a clear rule about towing after 3 violations, provide 2 prior warnings;
- Tow and charge back the cost to the unit owner;
Bids on Record
For how long do you have to keep bid/tender documents?
- According to CRA, they recommend 6 years which is the longest record keeping timing period we know of
- However, a representative from another condominium indicated that for some records it should be forever. We are unsure of the source of the same, so we recommend checking with your lawyer or auditor.
- Ask your lawyer if the bids form part of the Corporation’s records?
- The minutes should reflect the choice of the board
Where a current director has a Slip and Fall Case against the corporation and the individual is now a director, what should be the Board do?
- The Director has a conflict
- The Director should declare it
- The Director should not be part of any discussion or decision making with respect to his/her case and should excuse him or herself from the room when such discussions take place.
Minutes how many versions of them should there be?
- One set but the minutes can have two parts:
- The Minutes; and
- In camera minutes which excludes all non-disclosable information under section 55
- Why not just redact the unit number and give the full set of minutes? A concern with a unit owner may be still evident without the unit number. Boards need to be thoughtful and sensitive about the expectation of privacy and human rights.
- One set but the minutes can have two parts:
How do you change the signatory from the property manager to the director?
- Have the auditor advise the board that the directors should sign cheques.
How do you change the auditor, if you perceive there is a conflict? There are two parts to this question as reflected in the answers below.
- Unit owners appoint the same at a unit owner meeting usually the AGM. You can ask the board in advance of the meeting to secure candidate resumes and pricing for the meeting to consider the same in order to save time and money in holding another unit owner meeting.
- Change the auditor from time to time at the AGM
- Ask the auditor about the perceived conflict and clarify if there is really a conflict
- Ask the auditor to resign
How do you prepare for an efficient board meeting?
- Diarize Board Meetings regularly and in advance
- Hire a Minute taker
- Chair should be required to keep the discussion on track and keep the meeting within reasonable timeframes.
- Review and update status on the matters arising from prior minutes
- Make it comfortable for everyone such ensuring a glass of water is available but do not go over board
- Remind everyone to bring note pads and have computer outlets
- Keep the tone comfortable and friendly
- Send package in advance of the meeting AND EVERYONE SHOULD READ IT BEFORE THE MEETING NOT AT THE MEETING
- Length of meeting should be effective 1 hour or 2 hours
- Secretary is responsible for agenda; practically the property manager sends it out
- Most condominiums meet on a monthly basis
- Read the package
How do you get owners out?
- Advertise extra costs: auditor, venue, manager, legal
- Wine and cheese
- Create incentives: free guest weekend, Welcome back Snowbirds, interesting speakers
What does Human Rights Defence Insurance cover?
Human Rights Defence costs does not include punitive damages but covers defence costs.
How does the Corporation deal with insurance for events approved by the Board?
- Check if the corporation’s policy will cover the risk;
- Source additional insurance.
What is the Standard of Proof for enforcement?
The standard is the civil standard: on the balance of probabilities
Why should you hire a property manager?
- Given the complexity associated with managing condominiums a competent manager will be of assistance
- Managers bring expertise and depth of knowledge. Corporations and unit owners cannot afford to fool around with the business of the corporation
- Boards need advanced knowledge and intelligence
- Because a director is not a manager
- I expect a specialized person to carry on the role of management, just like I expect a firefighter to fight a fire
- The manager carries out the direction of the board – the roles are very different though they work in the same direction – the best interest of the Corporation
- Ask the clients of property managers why they use management
- Condominium managers are going to be licenced. This recognizes the value and scope of the work and assets that property managers manage day to day.
- Managers create a good buffer between resident and board members who also live in the community.