In 2017, news broke that a group of Toronto condo board members conspired to divert hundreds of thousands of dollars from a building’s operating budget into their own pockets. The group posed as condo owners, forged ballots and managed to take control of a condo board in 2016. Some of these individuals had allegedly infiltrated as many as 12 other condo boards!  

The group allegedly billed residents of the luxury condo building twice as much for security, concierge and property management services, keeping half the money for themselves. In other cases, condo owners were allegedly billed for services that were never received.

This is a nightmare situation, but fortunately, it does not occur often. Unfortunately, non-owners may be able to get onto a condo board more easily than we think. There are two reasons for this:

• Condos often have trouble finding people who want to volunteer and serve on the board;
• Most condo Acts are silent about whether non-owners can serve on the condo board.

We will explore this second point in more detail. State or provincial laws that govern condo corporations/associations often require candidates running for the board to be over 18 years of age, mentally competent, and in good standing with the corporation. But other than that, almost anyone can run. Condos can create their own bylaws to prevent non-owners from being eligible to run. They are strongly encouraged to develop and enforce clear rules about who can be elected to serve on the board. 

What does the board do?

The directors who serve on the condo board are responsible for the building’s physical and financial well-being. They must make important decisions, keep the community safe, create and update rules, manage finances, communicate regularly with owners, and plan and budget for the future. The board of directors must also ensure the corporation/association is operating in compliance with provincial/state laws. 

How are board members selected?

The process for electing directors depends on your condo’s bylaws and rules, but generally speaking, candidates are elected by other owners during the AGM or annual meeting. Subject to the bylaws, the directors decide who will fill the roles of president and secretary.

The number of directors ranges from three to seven people. The details about how many directors are needed can be found in the governing documents. Several condos have five members, and a quorum would be made up of three directors present at a board meeting.

Can someone who does not own a unit in the building serve on the board?

In theory, someone who does not own a unit could serve on the board. This isn’t always a bad thing; a tenant who is very involved in the community could make an excellent director. However, the majority of condos do have rules that disqualify non-owners from running. Below are some examples of how different places address this issue. 

Florida 

In Florida, candidates looking to serve on the board must be at least eighteen years old. The owner must not be delinquent in their payment of assessments to the association. If someone has been previously removed from an association’s board of directors by the Florida Department of Business and Professional Regulation, Division of Condominiums, then that person can’t run again. Section 718.112(2)(d)(2), Florida Statutes, provides limitations on the ability of felons to serve on the board.

The Florida Condominium Act provides that a candidate for the board is any eligible person who is timeline nominated. As such, ownership is not a prerequisite. Many Florida condos do have bylaws that restrict eligibility to ownership or membership. In some cases, only the recorded titleholder is eligible. In other instances, the documents allow spouses to run.

Ontario

In Ontario, candidates must be at least 18 years old. They cannot be bankrupt, and they must not have been found incapable of managing property within the meaning of the Substitute Decisions Act or the Mental Health Act. They cannot have been found to be incapable by any court in or outside of Canada. The candidate must be an individual (not a corporation) and must comply with the required disclosure obligations.

Condo bylaws may impose additional qualifications for candidates seeking election to the board of directors. For example, the rules may require that a director be an owner of a unit within the corporation. 

California

The rules are more specific in California. Associations are required to disqualify candidates who are not members of the association at the time of the nomination. However, this subdivision does not prevent a developer from making a nomination of a non-member candidate, consistent with the developer’s voting power outlined in the regulations of the Department of Real Estate and the condo’s governing documents. The requirement excludes spouses who are not on title from serving. 

Since the beginning of 2020, there are only four candidate qualifications condo associations can adopt. A person can be disqualified from serving if:

• The person is delinquent in the payment of regular and special assessments, with a few exceptions
• The person, if elected, would be serving on the board at the same time as another individual who holds a joint ownership interest in the same unit as the interested candidate, and the other individual is either properly nominated for the current election or an incumbent director
• The person has not been a member of the association for a full year
• The person has a past criminal conviction that would either prevent the association from purchasing the fidelity bond coverage required by Section 5806, or terminate the association’s existing fidelity bond coverage  

Alberta

Board members must be at least 18 years of age and be in good financial standing with the corporation. Candidates usually consist of unit owners, but they do not need to be. Some bylaws may establish rules for multi-owner units, additional restrictions on who can be on the board, allow renters or relatives of owners to sit on the board, allow external members such as a lawyer or accountant, to sit on the board. 

Different condo communities have different rules, but every community should do its best to assemble a board that is competent, motivated, and focused on helping the condo and its owners thrive. 

Ideally, you will have a team of people who are financially literate and who have a bit of business experience. Condo board directors should own a unit in the building, and it’s even better if they actually live in the unit. That way, they can experience firsthand what’s going on in the corporation/association. Board directors should not have any financial interest in transactions with the property manager if one has been hired to manage the condo, or their vendors. Directors may also be asked to sign and follow a code of ethics.

Some communities have encountered situations where property managers ask or volunteer to be on the board. This is not something corporations/associations should agree to. Property managers can be wonderful assets, but they are responsible for carrying out day-to-day operations, not making rules and financial decisions on behalf of the community.