A condominium administrator is a person appointed by the court to manage the affairs of a condominium when the board is unable to properly manage the condominium in accordance with the requirements of the Condominium Act, 1998.
According to section 131 of the Act, a condominium, owner, or mortgagee of a unit can apply to the Superior Court for an order appointing an administrator. The Act states that 120 days must have passed since the turnover meeting, but there is a case where an administrator was appointed before the turnover meeting where the developer refused to call the turnover meeting.
Grounds for the Appointment of and Administrator
The judge hearing the application may appoint an administrator if it would be “just or convenient, having regard to the scheme and intent of this Act and the best interests of the owners.” The court will look at factors such as a demonstrated inability to manage the corporation; substantial misconduct or mismanagement in relation to the corporation; if appointment is necessary to bring order to the corporation; a struggle among competing groups which impedes or prevents proper governance; and if the appointment of an administrator is the only option with a reasonable prospect of bringing order to the affairs of the corporation. This list is not exhaustive.
The judge has broad discretion when it comes to the content of the order. The judge can order the administrator to take over all of the board’s powers and duties, or only one. For instance, if there is an issue with only one aspect of the condominium’s affairs, such as a major repair project, the administrator could be appointed to address that issue and the board would continue to manage the remainder of the condominium’s affairs. The appointment can be for a set amount of time, or until a certain project is complete. An interested party could bring a motion to the court to terminate the administrator. The court would look at the same factors described above for the appointment of the administrator.
An administrator might seem like a great solution to a condominium’s problems, but it should be reserved for the most extreme cases. The appointment of an administrator requires a court application, which even if unopposed (which is unlikely), will cost thousands of dollars. If it is opposed, it could be tens of thousands of dollars easily. For a condominium already struggling financially, the appointment of an administrator might exacerbate the problem. For a better idea of the costs involved look at some of the cases reported on CanLii.
In addition to the legal costs, the condominium is responsible for paying the administrator for the duration of his appointment. While the fee charged by the administrator depends on his experience and education, most charge at least $80/hr. It is easy to spend $50,000.00 or more a year on an administrator for a small to medium sized condominium when all of the board’s duties and powers have been given to the administrator.
There are other downsides to the appointment. It takes away the right of the owners to manage their condominium in accordance with their community’s values. Their democracy becomes an autocracy where decisions for the many are made by one. It attracts negative attention to the condominium and often lowers the market values of the units. It can increase tension among already feuding groups in the condominium.
In short, the appointment of an administrator is a great tool to have available to condominiums, but it should be used only in the most extreme cases where no other option, such as removal and replacement of the board, is possible. It is a remedy of last resort. All other options should be exhausted before asking the court for an administrator.