Other reasons people serve as directors “Nearly all men can stand
adversity, but if you want to test a man's character, give him power.” —Abraham Lincoln
Not all directors serve on the board for honourable reasons.
Protecting
vested interests
I met one director who made no bones that he was on the board to make
sure that he could continue running his business of renting furnished
condo units as short-stay hotel rooms. He owns four units that he rents
out and he manages seven other units for other owners. (All of this was
in violation of the condo's declaration.)
At other times, directors remain on the board to protect the
developer's interests. This is especially so if the condo is still new
and on warranty or if the developer has subsidiaries that leases units
and rents suite-hotels units, owns the commercial units or the retail
properties on the site.
Some directors spend the corporation's money improving the front
landscaping, renovating the lobby and buying new hallway carpets. That
is because they are planning to sell their units and they are prettying
up the property to improve their chances of getting a good price.
Prestige
The condo employees, the security guards, cleaners and the contractors
defer to the directors, especially to the president and the treasurer.
It's due more to fear than respect as these directors can have a
contractor barred from the building or can replace the company. Their
floors may get more attention from the cleaners and the security guards
are especially polite.
A lot of people like that.
Perks
Directors often flaunt the condo by-laws and rules by parking in the
visitor's parking area without getting parking tickets, being given the
use of a second locker, using the party room for free, the use of the
office photocopier for personal use and having the condo's employees do
little jobs for him or her during their regular work hours.
Freebies
From time to time, the contractors give little gifts to the president
and the treasurer. Some management companies invite all directors to a
golf tournament or to a Christmas banquet. Sports tickets are popular
gifts.
Sometimes it gets bigger than that. If a president is hosting a party
in the party room, not only does he not pay the condo the normal fee
but the security company may feel obliqued to supply a "party guard"
for free.
Now the corporation didn't pay for the party guard so the owners aren't
out anything directly but there is a bad smell to this.
Illegal compensation
Some directors look for undeclared perks as a way to compensate
themselves for all the time they put into the unpaid job.
Most often the directors and the property management have paid dinners
when they hold board meetings. They will also invite the spouses and go
out for a pleasant Christmas dinner.
However, these undeclared perks are not permitted by the Act so the
expenses are hidden from the owners and may be buried in the Meeting
Expenses.
If the directors get caught, or if an ex-director blows the whistle, the courts may
order the directors to pay back the money to the condo corporation.
One of the GTA's biggest property management companies budgets anywhere
from $3,000 to $5,000 for the condo's Meeting Expenses. Much of this goes towards
hiring a recording secretary, postage and photocopying but some of it
pays for take-out meals for the board and management.
Just so the owners are not left out, a token amount
pays for the bottled
water, coffee and inexpensive cookies that are served at the AGM.
Fraud
The different ways the directors and
manager's accept illegal payments and services from the corporation's
contractors and employees is dealt with in a different chapter.
Condo fees At
the end of March 2013, the Administrator was discharged from a condo in
north Etobicoke and a new board of directors was elected.
In April 2013, the new board held an Owners Information Meeting. During
this rambunctious meeting one owner asked:
Owner:
Mr.
President, if I choose not to pay my maintenance fee's who will place a
lien on me?
President:
The board
will.
Owner:
Mr
President, if you choose not to pay your maintenance fee's who will
lien you?
President:
Nobody!
Well, isn't it nice to see that, now that the administrator was gone,
everyone at this condominium will now be treated fair and square.
By the way
Some time after this meeting, the property manager informed the other
board members that the president and another director had gone into the
management office and altered the accounting program to show that they
paid their fees when they had not.
The manager's accusations were proven to be true in a small claims court trial.