So, this won’t be like my usual posts where I share a recent case or discuss a section of the Condominium Act, 1998. Today I’m going on a rant about the relationships between owners, directors, and managers.
Last night I attended another requisition meeting. Nothing out of the ordinary about a requisition meeting; the best managed condominiums can have them from time to time. They are often a result of owners feeling in the dark about an issue and wanting more information. However, in this case the requisition was to remove a majority of the directors, which usually signals bigger issues. I can’t identify the parties involved because of privilege, but one of the reasons the owners sought removal of the directors was that the owners wanted to terminate the property management company and the directors refused or failed to do so. This isn’t the first time I’ve seen this as a reason for a requisition to remove the board of directors. It seems to be a trend in recent years.
Under the current provisions of the Act only the board of directors can terminate the relationship with the management company. The owners can ask the board of directors to terminate the relationship, but if they refuse to do so the owners’ only recourse is to remove the current board of directors. As we all know, obtaining enough votes to remove a director, which requires a majority (50% + 1) of ALL owners in the condominium (not only those in attendance), is a daunting task for any group of owners. It is more difficult in condominiums where there are a large number of rental units with offsite owners. It is even more difficult when a manager or board refuses to give over the owners’ list so the requisitionists can contact owners that live offsite. It is nearly impossible when the condominium’s manager also manages the rental pool.
The most unfortunate part of all of this is that it is the condominium community that suffers the most. The directors have to suffer through a requisition process and their reputations may be tarnished. The owners usually separate into two distinct groups: those for removal of the directors and those against. Tension, fighting, vandalism, and even physical altercations can result. None of this is good for the community; it only leads to increased fees, more conflict, and a less desirable place to live.
What should you to do if you are an owner who wants the board to terminate the relationship with the property manager? You have a few options. First, you can speak with the board without the manager present. Express your concerns, backed up with evidence or examples of the problems, and let the board respond. Don’t accuse the board of negligence or improper conduct. Second, you can gather support from the owners to remove the current board and replace them with owners that will bring on new management. You can do this using the requisition process (section 46), or at annual general meetings as terms expire. Third, you can always move or ignore the issue. Not a great option for those who like their neighbours or complex, but it is an option.
What should you do if you are the board faced with a requisition to remove you because the owners don’t want the manager anymore? Listen to the owners! You don’t have to agree with them, but at least take the time to listen. Meet with them (without the manager) and discuss their concerns. Sometimes it will become apparent that it is a small group of owners that don’t follow the rules or are always late paying their fees; they don’t like the manager telling them what to do. However, more often than not, it is because the owners are not satisfied with the quality of service being provided by the manager. The manager ignores them, is rude to them, or is confrontational. Don’t forget, you can always ask the management company for a different manager. Sometimes it just isn’t the right fit. Finally, you’ll also want to review the management agreement and discuss the matter with the condominium’s lawyer since there may be consequences to terminating the manager.
What should you do if you are a manager in these situations? To be blunt, do your job just as you would any other day. You act for the condominium as a whole, not the board. As tough as it may be, you have to put your personal feelings aside. Don’t be defensive. Don’t take sides. Don’t intervene to make it more difficult for the owners to remove the board. Prepare the proper notices, proxies, and ballots like you would for any other meeting. Bring material to the meeting to answer questions; often the owners really just want more information.
Who should chair the meeting? It is often a good idea to also consider hiring someone to chair the meeting. It is often difficult for the directors being removed to act as chair. Even if they can put their personal feelings aside, the requisitioning unit owners may not be able to. It will result in a long, heated, and unproductive meeting. If the property manager is the reason for the removal having him or her chair will raise the same concerns. Who do you hire? Some turn to the corporation’s lawyer. The concern is that some lawyers, not all, will fall into the same trap as some managers do – they will try to protect the board (and their role as the corporation’s lawyer). You could ask another lawyer who is not involved in the condominium to chair the meeting. If the cost of having a lawyer chair the meeting is a concern, you could hire a neutral property manager to chair the meeting. You’ll have to check your by-laws for restrictions on the chair, but often a vote of owners at the meeting cause decide the chair.
Finally, in some instances it may be worthwhile to have security personnel at the meeting. It will depend on the community as a whole and the circumstances of the requisition, but sometimes there are concerns about the potential for violence. I have been to meetings where people have been escorted out because of their conduct.
Remember – it is your community. Try to listen to and respect each other.