Real Estate

Court-appointed administrator important tool for condo owners

Serving a role that is critical as a last consumer protection for unit owners, court-appointed administrators for condo corporations are, in the right circumstances, a friend rather than a foe to the buildings they administer, Toronto condominium lawyer Armand Conant writes in Condo Voice magazine.

As Conant, partner and head of the condominium law group at Shibley Righton LLP, explains, the number of administrations is on the rise amid governance problems, as well as the fact that condo corporations are aging and growing in number. They are expected to have an increased role as the industry continues to grow and age, he adds.

“I am not suggesting that we have a widespread problem or epidemic in Ontario. Quite the opposite, as most corporations are well governed. But I do believe that we will see an increase in Administrations in the future,” he writes.

As Conant explains, for a few of the approximately 30 condo corporations that have had court-appointed administrators, “the building was in such a state of disrepair that the municipality was going to condemn it. In other cases, it was a minority of unit owners who obtained the Administration order so that they could wrest control from a developer-controlled board which was not acting in the best interests of all owners.”

Although some argue that the administrator mechanism strips away the democratic right of unit owners to govern themselves and can be an unnecessary expense for financially troubled corporations, Conant says there is an undeniable role for administrators and inspectors.

“While letting owners run their own corporation is desirable from a democratic point of view, unfortunately it does not work for buildings where you have rogue boards who misuse owners’ money, directors with hidden agendas, or when the board has misguided ideas of how to govern,” he explains.

As such, Conant says the court-appointed administrator is an important tool available to unit owners “to save their corporation.

“There should always be the ability under the Condo Act for the appointment of an arm’s length person to operate the corporation, correct the mistakes, and get the building back on its feet (or even have an appointment for limited purposes),” says Conant.

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