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Owner Control or Board Control? Condominium Corporate Decision Making

Jan 22, 2018

I have seen a number of board of directors from condominiums in this city and beyond that unnecessarily restrict their decision making power. The board will go back to their owners for any number of issues seeking authority to make decisions and with no apparent legal reason for such a practice. When pressed on why they do it, they often answer that it is always the way they have done something, or that they simply believed it was the only way to approach the issue.

Creating a special assessment is one decision point that I have seen this approach taken a lot. Boards can be hesitant to direct their owners to come up with large amounts of cash without their agreement, or they believe that there is a requirement to do so. The recent decision of Wilchuk v Westfield Twins Condo Corporation, 2018 SKQB 2 (CanLII), is a good authority that subject to the bylaws of your condominium corporation/unit owner resolutions, that a board has no obligation to seek authorization from their owners when deciding to create a special assessment.

In this decision, the applicant, an owner in the building, was frustrated by the approach taken by the board in increase condominium fees and making special assessments. He brought forward an application through the oppression section of the Condominium Property Act seeking any number of remedies including prohibiting collection, and restraining any future assessment, fee increases or major expenditures without owner approval. The basic premise of his argument was that it was unit owners, and not the board, that was statutorily authorized to pass resolutions for fees and assessments.

The Court reviews both the applicant’s argument and reflects on it as against the relevant provisions of the Act. It notes at paragraph 17 and 18:

[17] Included in those duties are those stated in s. 54 of the Act. It obligates a corporation to pay and satisfy expenses incurred respecting common property and common facilities. To pay such expenses, the Act enables a corporation to establish a common expense fund and reserve funds. Necessarily, to pay for such expenses, a corporation requires money and s. 56 (as previously quoted) mandates a corporation to levy fees.
[18] Sections 57 and 58 (as previously quoted) impose further obligations upon the corporation, and since the board is directed to perform the duties of the corporation, these obligations fall upon the board. These sections require the corporation to contribute condominium fees to the common expenses fund and reserve fund, and to determine the amounts needed for the reserve fund. The corporation may initiate legal action to recover any unpaid fees owing by owners.

The Court found entirely for the Respondent condominium corporation. The Court comments that “Nor were the Board’s actions harsh, harmful, in bad faith or an abuse of power. The Corporation acted even-handedly, respected unit owners and acted in their best interests.” A glowing endorsement indeed.

As noted though, there is no comment of any bylaws or unit owner resolutions that restricted the board’s authority to make any of those decisions. As the Act allows for some of these types of restrictions, you should consult with your lawyer if you have any questions about the authority of the Board to impose assessments.

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