The True Value of Your Condo Board
By Todd Rowley
When purchasing a condo you are making an investment that is different from a typical home. Instead of taking sole ownership of a free-standing residence, you are essentially becoming a shareholder in the corporation with a condo board that provides management to the overall corporation.
What is a Condo Board?
The condo board is an elected group of owners that operates a condo corporation. They are responsible for all aspects of the corporation’s management including building maintenance and financial stewardship. In short, they are the voice of the owners, acting in the best interests of those they are elected to represent. In some cases, condo management companies are hired to carry out the responsibilities of the corporation.
Ontario’s condominium regulatory body, Condominium Management Regulatory Authority of Ontario (CMRAO), sets standards and enforces licensing of condominium managers and related condominium management businesses. Condo boards are further structured first under provincial legislation (The Condominium Act, 1988), followed by their board declaration, by-laws, and rules, creating a sort of top-down authority flow.
The Act applies to all condo boards, regardless of their design, and provides governance and guidance to each step of the structure. Any by-law or rule that is created by the condo board must align with the Act, and none is permitted to contradict another. For example, a rule can’t contradict a by-law, which can’t contradict the Act.
What is the value of a condo board?
With a condo board, you have the pride and independence of homeownership coupled with the benefit of having someone to look after many of the less desirable aspects of homeownership like maintenance and repairs, but also assessing the viability of new lighting, paint, or capital projects. The condo board works on your behalf and they have a vested interest in the valuation of the asset – maintain or increase the value of the property.
With homeownership comes unforeseen expenses. Your condo board is legally responsible to manage maintenance contracts through a tendering process, ensure insurance coverage, manage funds, and maintain accountability to the owners. The board’s requirement to handle the behind-the-scenes responsibilities gives the owners peace of mind.
While the homeowner takes comfort in the minutiae being looked after by someone other than themself, none of the business happens without their awareness. Your condo board is required to share information with transparency and on a regular basis with updates on work projects, changes to the Condominium Act, and the state of the reserve fund.
The reserve fund exists to manage current and future financial needs that will impact the corporation and condo owners. These expenses could such costs as future roof repairs, and while the current owners may not require a new roof for many years the responsibility to plan ahead lies with the condo board. Your perspective on the reserve fund needs to be focused on the long-term value of your home with plans made accordingly. Understanding the role and responsibility of the board allows condo owners to have a clearer appreciation for the use of the funds and gain an appreciation that the results of stewardship may not be immediate.
Unlike homeownership, owning a condo and having the management of a condo board, the interests of all owners are taken into account when decisions are made. No single board member can carry their own agenda into meetings or the operations of the corporation. While individual owners may not be in agreement, the decisions are made with a majority vote ensuring that the direction of the board and the benefits to the stakeholders are fair and equitable for all involved.
How can I get involved?
Anyone serving on a condo board is required to complete training offered through the Condominium Authority of Ontario. This comprehensive training prepares the board member to serve the corporation’s interests with a foundation of knowledge that includes financial management, maintaining the condominium’s physical integrity, best practices, and the roles and scope of governing organizations. The training is free and available online.
If you have the opportunity to serve on the board you will gain a greater understanding of the inner workings of the corporation while having the privilege to serve alongside your neighbours.
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