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When courts appoint administrators to condos

Condominium Consultant Robert Buckler & Lawyer Karen Kisiel
Monday, November 11, 2013

Why would a court-appointed administrator be assigned to a condo corporation?

Pursuant to applications typically prepared by condominium lawyers, Section 131 of the Condominium Act provides that judges from the Ontario Superior Court of Justice may appoint administrators “if the court is of the opinion that it would be just or convenient, having regard to the scheme and intent of this Act and the best interests of the owners.”

Applications may be initiated by the condominium corporation, an owner or group of owners, a mortgagee of a unit or a lessor of a leasehold condominium corporation. In many cases, applications are made after, or in response to, one or more unsuccessful requisitions by owners to remove some or all of the existing board of directors.

In many of Ontario’s cases where an administrator has been appointed by the court for a condominium corporation, the administrator was given all of the powers and duties of the board of directors, including the authority to levy special assessments, increase maintenance fees and carry out any necessary repairs or maintenance of the condominium property.

The suspension of the authority of a democratically-elected board of directors is extreme, but in some cases necessary in order to rehabilitate troubled buildings and communities. Recognizing this, the court doesn’t take the decision to appoint an administrator lightly.

The court will consider the following factors when deciding whether an administrator should be appointed in any given case:

  • Whether a demonstrated inability to manage the corporation has been established
  • Whether substantial misconduct or mismanagement has been demonstrated
  • Whether the appointment of an administrator is necessary to bring order to the affairs of the corporation
  • Whether there is a struggle within the corporation among competing groups such as to impede or prevent proper governance
  • The costs of involvement of an administrator
  • The democratic government of the corporation should not be overridden by the court except where absolutely necessary

There are a variety of urgent circumstances that the courts have deemed justifiable to appoint an administrator, such as:

  • Poor financial situation because the building has been underfunded or under-budgeted for several years
  • Years of deferred maintenance due to insufficient funds or resistance from the community and/or board to spend money on reserve fund projects
  • Disunity, divisiveness, distrust and conflict within the community, making it difficult, if not impossible, for the board to “manage the affairs of the corporation” or business to be conducted at community meetings
  • Delay or lack of timely annual general meetings due to the ongoing problems in the building, which again may lead to confrontations with management and/or the board of directors

When dealing with any of these circumstances, parties should always consult a member of the Law Society of Upper Canada, which includes a lawyer or paralegal who is in good standing.

Robert Buckler is a court-appointed administrator, condominium consultant at Beredan Management & Consulting Inc., and realtor at Century 21 Heritage Group. He can be reached at rbuckler@beredan.com. Karen Kisiel is a Toronto-based condominium lawyer and can be reached at karen@kisiel-law.com.

2 thoughts on “When courts appoint administrators to condos

  1. How quick can the court appoint an administrator?
    we are underfunded and mismanaged for years.
    We just starting to get things turned around with a good management team until last AGM & BODs were elected by acclamation. members of the old past (channel Management days), For the past several months they have demonstrated a unwillingness to work with management. They have terminated management with the appearance of becoming self managed. We have tried a requisition meeting which failed. Fear and intimidation by the board was suspected when some owner started taking back proxies. This was confirmed in conversation today with an owner, a director (me) and the manager..

    This board has refused to enter a balanced/proper budget. They also refused to implement a notice funding for special assessment to building’s depleted funds. They have demonstrated a unwillingness to do proper repairs, They refuse professional advise. The board lawyer, seems yo ignore other directors concerns and seeming acts on behalf of the one director only.

    We need protection form this corrupt board.

    • Our condominium has elected executive members, who are getting elected by collecting proxies where the owner’s give proxies on the basis of ethnicity, and not for the good of their building. They don’t speak English and they are not aware of the Bylaws, never attend the council meeting. Slyly Renting without permission..
      Theee is a rift between the two communities and a big time trust issue. This is going on for a. Lille of years.
      Now they are in majority so they are taking wrong decoy. Ignoring repairs , don’t want to spend money on repairs , want to give Owners to do the certain jobs of maintenance., plumbing, painting etc where they can save money. But in doing so they have brought our building to deplorable state. Previously we had building mananagement company for 7 years . This majority group of executives had trust problem as they didn’t want to listen to the advice of the PMC they kicked them out. After that they brought a company with majority Asian agents so that they can do what they want. In one year, within a period of 5-6 months two PMC have cancelled their contracts. They suffer from power struggle and trust issue with other community. Discisions made and voted at the. Ounc Meeting are changed later as this majority pleases, changing the meeting minutes according to what they want written. Fighting over everything.
      But at AGM or SGM they can win by proxies.
      We had build a good CF, we still have, but our building is not maintained. So many Infractions going on, pleople doing whatever they want
      To means of changing structures in their units without permission. Not applying permission for renovations , illegal dumping, homeless coming and sleeping in our private property. Paring Infractions etc etc.
      Do you think to get things in order it is best to have it under court appointed administrator. And how to proceed with this.

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