Dysfunctional condominium boards are characterized by the inability or unwillingness of directors to work together for the benefit of the condo corporation and the owners who elected them. The reasons for the dysfunction are complex and often irrelevant; however, the dysfunctional behaviour can often be devastating for a corporation.

The bad news
When a newly elected director finds itself on a dysfunctional board, there is rarely an easy solution.

Unless one or more of the directors are undischarged bankrupts, mentally incompetent or their units are the subject of an undischarged condominium lien for at least 90 days or they otherwise become unqualified to be directors under the operating bylaw, they cannot be removed before the end of their term except by a vote of 50 per cent plus one of all of the owners in the condominium (at a meeting duly called for such a purpose).

Directors cannot remove directors. In large measure, therefore, the newly elected director joins the “as is” board.

And so, meetings are not held as required. Directors break off into “camps” to discuss matters among themselves to the exclusion of other “camps” at informal gatherings, which may or may not constitute legally valid meetings.

Every decision, even simple decisions that involve compliance with property standards, safety, building or fire code matters, are cast against a larger backdrop of other unresolved issues, to be traded for concessions on other questions in respect of which no agreement has been reached.

The property manager becomes frustrated at its inability to get the board to approve a budget. Important decisions are put off. Meetings, when they occur, become shouting matches and the majority is lost when directors walk out spontaneously.

The advice of both the property manager and the corporation’s lawyer are eyed with equal suspicion by some of the directors. No one will resign. No one will compromise. There’s stalemate.

The don’ts
1. Do not engage in making decisions at “unofficial” board meetings. Even when a majority of the directors get together and unanimously resolve to do something, that decision is not legally valid unless proper notice of a board meeting was given to all directors. And it doesn’t matter if the majority could have carried the vote at a properly constituted board meeting. With very limited exceptions, the decisions of the board may be made only at a properly called meeting of directors at which a majority is present.

2. Do not engage in enlisting the assistance of unit owners to evidence the validity of the views of a group of directors. It’s not that directors shouldn’t listen to unit owners. But the decision is to be made by the directors alone. It’s sometimes difficult for owners to understand that a vote at an owner’s meeting – even if made in respect of a matter that is entirely within the legal purview of the board – is of no legal effect.

Owners are not legally responsible and will not be required to answer for such decisions. The directors are. That’s why it’s so difficult to remove duly elected directors. Sometimes, directors make unpopular decisions because they are obligated to do so.

In short, the Condominium Act makes it clear that it’s supposed to be difficult to get rid of a director.

3. Do not just stop showing up. A board member will still be liable.

The dos
1. Pay particular attention to the procedure for meetings set out in the declaration, bylaws and the Condominium Act. Informal procedures will work when the board is operating in a “friendly” environment but members are asking for trouble if they don’t comply with mandatory procedures for calling meetings, including compliance with notice requirements.

Become familiar with the operating bylaw. Does the notice of the meeting state the general nature of the matters to be considered at the directors’ meeting? Is adequate notice being given? If all of the directors attend, they may be waiving their objection to the validity of the meeting, unless their only reason for attending is to object to the validity of the meeting.

2. If the bylaws contemplate that the president should chair meetings, consider appointing a “neutral” chair. This could be the property manager, condominium corporation’s lawyer or, quite often, a third party lawyer.

A third party chair (who is unencumbered by any involvement with the history of the dispute) can save the condominium corporation thousands of dollars in legal fees if arbitration and recourse to the courts can be avoided. Chairing a meeting of directors who are not operating as a team can be very difficult.

3. Arrange for minutes to be taken at the meetings. The (neutral) chair will ensure everyone has an opportunity to be heard in an orderly fashion, and will otherwise ensure procedural fairness.

If a director is in the minority, ask that objections or concerns be included in the minutes as a dissenting vote. The Act doesn’t require it but the bylaws might. If the matter becomes litigious, the director might be glad the minutes reflect the dissenting vote.

4. Rely on the advice of a professional advisor (lawyer, engineer or accountant, for example). The Condominium Act deems a board member to have satisfied its obligation to act with the competence of a reasonable person if it has done so.

Acting against the advice of a professional advisor, even if in the majority, may be unwise where the issue is contentious. The likelihood of board decisions being examined in detail increases significantly if the decision is contentious and made by a board which does not work well together.

The Condominium Act contains very little guidance and direction for the conduct of directors’ meetings. Most boards conduct themselves in a businesslike fashion without undue regard for the technical legalities associated with decision-making, focusing more on the substantive decisions that they are required to make (and properly so).

However, where directors are not working well together, it is important for the board to ensure the decisions are made in a manner that minimizes the risk of legal challenges to the validity of the process. Expensive and lengthy legal challenges result from failing to do so.

These challenges detract from the otherwise substantively important business of the board and cannot help but redound to the detriment of owners and the community generally, by among other matters, creating uncertainty among the owners. Owners elect directors to do a job, whether or not they can get along as a group.

Ray Mikkola specializes in condominium law and is head of the commercial real estate practice at Pallett Valo LLP. He can be reached at 905.273.3022 ext. 276 or rmikkola@pallettvalo.com or