Unpaid volunteers
In the main, condominium directors are unpaid volunteers.
It is taken for granted
that the 10,000 condominium corporations in Ontario will find
three to seven
persons ( roughly 50,000 in total) who will have the interest,
skills and knowledge to be able to
direct the management, finances and operations of a $10
million to $200 million dollar
property
with a cash flow of anywhere from $10,000 to $500,000 a month for
absolutely no pay or compensation.
Many times this is the case and the rest of the owners are
enriched to have such a wonderful benefit.
However the
volunteers will often find, after a couple of years, that their work is
routine, frustrating and time consuming. That is one reason
why some condos
have trouble finding volunteers to take on the responsibility.
Paid
directors
Yet the directors can be paid. The Condominium Act in Section
56 concerning by-laws states:
Remuneration
of directors
Section
56 (1) The board may, by resolution, make, amend or repeal
by-laws, not contrary to this Act or to the declaration,
(a) to govern the number, qualification, nomination,
election, resignation, removal, term of office and
remuneration of the directors, subject to subsection (2);
(d) to govern the appointment, remuneration,
functions, duties, resignation and removal of
agents, officers and employees of the corporation and the
security, if any, to be given by them to it;
Section
56 (2) A
by-law relating to the remuneration of directors shall fix
the remuneration and the period not exceeding three years for
which it is
to be paid.
So there. The directors can receive compensation for
the work they
perform. All they need to do is pass a resolution stating what pay,
benefits and perks they think they deserve and then,
once every
three years, get the owners of 50% plus one of the units to vote in favour of
this
by-law at an owners' meeting.
Can officers be paid?
Most directors dread asking the owners to pay them for the work they
perform.
However, some lawyers say that there is a way around this. In their
opinion, the Act says the
directors cannot be paid unless the owners ratify a by-law allowing it
but it does
not say that the corporation's officers cannot be paid.
By this way of thinking, the president can be paid for chairing
meetings as he will be paid for
performing the president's functions, not for being a director. The
secretary can be paid for recording the minutes and sending out notices
while the treasurer can be paid for keeping track of the books.
Again, most boards shy away from having to justify getting paid from
the owners' common expense fees.
(I am not sure that paying directors for the work they do as officers
would pass a court challenge unless it was authorized by a by-law. (See
56.1 (d) above.)
Ignore the Act?
Do
directors ignore the need for a by-law and give themselves "perks" for
being on the board? Many do, whether it is a free pizza at board
meetings, a nice Christmas dinner with the spouses, an honorarium or
"discounts" from the contractors, directors expecting something for
their time is not unusual.
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