CAT Says Being Self-Managed is Not an Excuse
[caption id="attachment_9728" align="alignnone" width="1158"] Photo by Matthias Oben on Pexels.com[/caption] In a recent decision the Condominium Authority Tribunal (CAT) was asked to rule on an owner's request for records. The owner requested several records, including audited financial statements, budgets, board meeting minutes, AGM minutes, the most recent PIC, by-laws, employment agreements with any directors, and management contract. The condominium suggested that many of the issues raised by the owner were due to the condominium being self-managed. Spoiler: this was not a reasonable excuse for not providing records. The member quickly determined that the owner was entitled to examine the records. At paragraph 10:
None of the records requested by [the owner] should have given the Corporation pause when considering entitlement as they are all listed in s. 55 (1) of the Act and Reg 48/01 as records the corporation is required to maintain, and no exceptions as per s. 55 (4) apply. Some of the records requested, such as the Board meeting minutes may have been subject to redaction, but as set out below, these records do not exist. In not providing the records, [the Corporation] has refused [the Owner] records to which he is entitled.The member then had to decide if the condominium had a reasonable excuse for not providing the records. The member rejected the following reasons:
- The 2018 financial statements were delayed because the head of the auditing company had a heart attack. "The Board could have worked with a different accountant in the same company or hired a different accounting company."
- Minutes did not exist because the corporation was "self-managed" and no formal board meetings were held. While the member was careful not to provide an opinion on the appropriateness of the Board's choice to make decisions without holding meetings (as this is beyond the jurisdiction of the CAT), the member had some good general comments for self-managed condominiums. The Act does not outline any exceptions or exemptions for self-managed corporations. The list of records in the Act and regulations establish a minimum standard. One of the records is minutes of board meetings. Maintaining records and providing them to owners is "a fundamental factor in providing the openness, transparency and accountability to which owners are entitled." The member commented that maintaining minutes "is also an expression of the board's good faith, care and diligence in regard to corporate record keeping."
- AGM minutes did not exist because AGMs were not held since 2014. "In my view, the non-existence of minutes arising from what appears to be a clear failure to hold annual general meetings for several years, which is contrary to the requirements of the Act, cannot constitute a reasonable excuse for not providing those minutes."
- "Large swaths of records simply do not exist" because of serious non-compliance with the Act
- The condominium refused to provide a contract on the grounds that it did not exist, only to admit later that it does exist
- Attempting to blame shortcomings on its "self-management". "Being self-managed does not excuse the Board from these responsibilities..."