Administrator’s duties

Once the administrator has assumed the position, he assumes all the powers of the board of directors.

Equally important is that the owners, unless they make a successful application to the courts, cannot remove the administrator so he has all the power he needs to make the difficult but unpopular decisions that are required to restore the condo corporation back to financial health.

The administrator is unconstrained by the need to be re-elected by the owners who will have to pay the bills, so he will be better able to make the difficult decisions necessary to get a struggling corporation back on solid ground.

The most pressing need is to put the corporation's financial affairs in order. The units that are in arrears are given notice to pay up or a lien will be put on their units and, if necessary, sold by a power of sale.

Common element fees are normally increased to eliminate the operating deficit and a special assessment is raised to generated needed funds. If a very large amount of money needs to be raised, the administrator may ask the owners to approve a borrowing by-law.

If there are open city work orders demanding repairs to the property, the administrator will work out a plan with the city to bring the property up to city standards.

Owners will get hurt
An administrator's job is not a pleasant one.

Some owners will lose their units as they will not be able to pay their arrears nor will they be able to pay the new higher fees and the special assessments or loan payments that the administrator requires. That is unfortunate but "free loaders" and low-income owners keeping the fees too low for far too long may have been a major reason that the corporation got itself into such a mess.

How many owners will lose their homes? In the lower-priced condos as many as one-third. Sometimes more. It depends on how bad the financial situation is, how expensive major repairs are required and how long the administrator remains in charge.

In the short term, power of sales will hurt all of the owners as property values will fall. How much? Units have dropped to as little as a third of their previous value. Owners will find it hard to sell.

However, once the power of sale units have been sold and the huge assessments and loans are paid off, property values can recover.

If the administrator was requested by a group of owners, it is common for the administrator to replace the property management company as they were too close to the displaced board and the corporation needs a fresh start.

Some of the contractors may also be replaced as the administrator looks for competent suppliers at reasonable rates. Some employees may lose their jobs if the administrator finds their performance wanting.

Being an administrator is not a fun job.

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