“A lie gets halfway around the world before the truth
  has a chance to get its pants on.”
—Winston Churchill

One condo owners' website asks:
At an owners' meeting in November 2009, the question was posed to our current property manager, board of directors and their legal counsel, as to whether or not our building was in financial crisis. We were adamantly assured by the property manager that this was not the case.

Then on 17 August 2010, a mere eight months later, the board went to court to ask for an administrator to take control of the condo because our corporation was in a financial mess. The judge was told:
The condo had an operating deficit of $670,000.
The deficit included about $360,000 for unpaid water and gas charges.
The reserve fund was flat broke – there was no money to pay for even the most basic repairs.
The garage was unsafe and required repairs estimated at $1.7 million.
The roof required replacement and the roof anchors were unsafe.
There were about 40 units that are affected by mould as a result of water intrusion due to the deteriorated exterior condition of the building – these required urgent work.
The balconies were unsafe and need repair.
Many owners were in arrears of their maintenance fees and consistently paid late.

So why did the property manager lie to the owners when it was so obvious that the truth could no longer remain a stranger?

He may have thought that he had too. He is a mere contractor who can be easily replaced if he crossed the majority of directors.

It is up to the board majority to determine just how much honesty the board and management will show towards the owners.

Earlier this year (2012), at an AGM in Toronto's west end, the president told the owners that there was $350,000 in the reserve fund. The truth: there was $80,000.

Why the lies?
Directors and managers often lie to owners. Having a democratic form of governance encourages lies. The directors are so worried about a recall election and needing to please voters, they reflectively hide the truth in a bid to evade the unpleasantness and to buy time.

The cost
The owners are not stupid. Once they learn that they are being lied to, they lose respect for the directors. That opens up the condo community to a culture of mistrust and suspicion that lingers for years.

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