Examining the records

The owner and purchaser’s right to examine the condominium corporation’s records is an extremely important one. A family’s home is usually the most expensive purchase that they make and it is the foundation of the owner’s assets and future security. The ability to check on the health of that investment depends on the right to see the records.



You would expect that the board of directors would be willing to allow an owner to examine the corporation’s records and would fully cooperate with any reasonable request. However far too often that is not the case. Owners are often denied access to the records for reasons that may include:

1.
The board wants to discourage owners from poking their nose in the corporation’s business.
2.
Going through the files and finding the requested records takes time and effort. They do not want the bother.
3.
The owner has stated that he intends to sue the corporation and he is on a fishing expedition looking for evidence for his court case.
4.
The owner has made numerous requests to examine the records and the board states that the owner is using these requests to harass them and is interfering with their ability to manage the corporation.
5.
The board wants to hide records that may suggest that the board or the manager has engaged in questionable, unethical or dishonest practices.
6.
The board wants to hide records that shows that they made poor decisions, there are riffs in the board or that the corporation has been or is being overcharged by its contractors.
7.
The board is trying to hide the corporation’s true financial status.
8.
They cannot find the records. They may have been destroyed, lost, misfiled or they may never have existed. Sometimes a previous property management company is holding them, pending payments. (Can I use the word ransom?)
9.
The board does not want an owner to know that certain corporation business was not discussed and voted on at a board meeting.

Here is a recent Internet posting that I read from an owner seeking help.

“I requested for the minutes of the Board meeting last month (Feb), and it was unavailable because it needed to be approved in the March meeting. I asked for the minutes in Jan, and they were also unavailable and not approved. I asked for the minutes in Nov and Dec, and they were also unavailable and possibly offsite, and cannot be located.
    Is there a time limit in which these minutes must be available to owners? I believe my “noise complaint” case was discussed in the last few months’ board meetings, and if they stay unapproved, there leaves lots of room for them to be altered or changed after my request?”
Victoria—22 March 2012

Section 55—Examination of records
Section 55 of the Act gives an owner, a potential owner and the mortgagee the right to examine the corporation’s records

This section states that upon receiving a written request and reasonable notice, the corporation shall permit an owner, a purchaser or a mortgagee of a unit or an agent of one of them duly authorized in writing, to examine the records of the corporation.

The following records do not apply:
(a)
records relating to employees of the corporation, except for contracts of employment between any of the employees and the corporation;
(b)
records relating to actual or pending litigation or insurance investigations involving the corporation; or
(c)
subject to subsection (5), records relating to specific units or owners unless it is the owner or buyer of the unit making the request or if the requested records relate to the owner making the request.

The corporation has to make the requested records available within a reasonable time. However the requests must be related to the purposes of the Condominium Act.

The corporation shall provide you copies of the records if you ask for them and can charge a reasonable fee for the copies. Examining the records is free and the corporation can only charge for the requested copies.

How much the corporation charges for copies vary from ten cents to a dollar a copy. (It is obvious that a dollar a page is unreasonable and is intended to limit the number of copies that an owner requests. The Act does not allow the corporation to demand payment for examining the documents.)

Penalty for non-compliance

The Act states a corporation that without reasonable excuse does not permit an owner or an agent of an owner to examine records or to copy them under this section shall pay the sum of $500 to the owner on receiving a written request for payment from the owner.

If the corporation will not pay you $500 you may recover the sum from the corporation by taking it to small claims court. If a corporation, without reasonable excuse, does not permit you to examine records or to have copies of them, the small claims court may order the corporation to produce the records for examination.

Request to examine the condo’s records
Here is an example of a memo requesting to examine certain condo records.

01 February 2011

To:    Scarlett O'Hara    Property Manager for YCC # 007
        Amazing Property Management Company
        Fax #: 416–999–0000
        e-mail: s.ohara@amazingproperty.com
 
Cc:    Board of directors    YCC # 007
       
Re:    Request to inspect and examine YCC # 007 records

I am requesting an appointment to inspect and examine certain YCC # 007 records. The records I wish to examine are:

1. The current Reserve Fund Study.
2. The budget for the current fiscal year.
3. The financial statements for the last fiscal year, either audited or un-audited.
4. All the monthly utilities bills for the last fiscal year.
5. The minutes of all board of director meetings since the last AGM.

I am interested in understanding the financial status of the corporation and I believe that examining these records will help me achieve that goal.

Please e-mail me with a day and time when I can come to the management office and examine these records. I am free most days and I would prefer to come in the morning when the office opens at 9:00 am.

If you have any questions about my request or problems meeting my request, please let me know as soon as possible.

Sincerely;

Rhett Butler
YCC # 007, Unit # 707

I have been careful to limit my request to only the documents that I have a real interest in examining and I gave a legitimate reason for my request. I also sent my request by e-mail and I sent it by fax.

I put the fax original in a file along with the fax transmission confirmed sheet. This is my way of insuring that the manager cannot say she did not receive my request. I also was careful to state what specific documents I wanted to see so they could not say they did not understand which documents I wanted to examine.

A mistake to avoid
An owner at a townhouse condominium in Brampton sent a written request to the property manager asking to inspect some corporatation documents.

The owner made the mistake of sending the request to the property manager at the property management company address and did not copy the directors of the condo corporation or send the request to the corporation address on record.

The manager did not correct this error but let the owner go all the way to small claims court where the judge dismissed the case.

No reply
In many condos, you will not get a reply to your request. Wait for ten days and then send a second request, again by fax and by e-mail. Keep the original sheet and the fax transmission confirmed sheet for your files.

11 February 2011
To:    Scarlett O'Hara    Property Manager for YCC # 007
        Amazing Property Management Company
        Fax #: 416–999–0000
        e-mail: s.ohara@amazingproperty.com
       
Cc:    Board of directors    YCC # 007
       
Re:    Request to inspect and examine YCC # 007 records

On 01 February 2011, I sent to a written request to examine certain YCC 007 records. I have not yet received a reply.

The records I wish to examine are:

1. The current Reserve Fund Study.
2. The budget for the current fiscal year.
3. The financial statements for the last fiscal year, either audited or un-audited.
4. All the monthly utilities bills for the last fiscal year.
5. The minutes of all board of director meetings since the last AGM.

Please e-mail me with a day and time when I can come to the management office and examine these records. I am free most days and I would prefer to come in the morning when the office opens at 9:00 am.

If you have any questions about my request or problems meeting my request, please let me know as soon as possible.

Sincerely;

Rhett Butler
YCC # 007, Unit # 707
 
Observations about examining the records
1.
“The corporation has to make the requested records available within a reasonable time.” How long is reasonable? Five days, seven days, ten days? The Act doesn’t say. However, if the corporation does not reply to any of your written requests within ten days I am sure a judge will realize that they had no intention of responding.
2.
The owner does not always have to give a reason for asking to examine the records but it is a good idea to do so. That will prevent the corporation’s lawyer from using a lack of a reason as an excuse to deny your request.
3.
Do not bombard the corporation with numerous requests to examine documents and do not make multiple requests to examine the same documents. The lawyer will use the number of requests to argue that your requests are a form of harassment or oppression, you have become a nuisance and you are hindering the corporation from running its affairs.
4.
Remember that the manager or board members do not have to answer any of your questions. All they have to do is give you access to examine documents. They do not have to explain what the documents mean.
5.
Owners are not automatically entitled to receive a list of owners. The reason for requesting a list of owners must be clear. Otherwise the provision of the owner’s list may infringe on the privacy of the other owners.
6.
If the board made a decision, they do not have to explain why they made that decision and not a different one or what criterion they used when making their decisions.
7.
It is important that you have not given the board any tangible reasons to claim that your requests to examine the records is a fishing expedition for a lawsuit, to help you conduct an investigation or to further your personal political aspirations.
8.
An appeal court has ruled that availability of minutes of the board meetings is fundamental to the rights of the individual unit owners and the court found there was no basis for requiring that the owner provide a reason to examine them. The court also stated that the Condominium Act does not specifically require a reason for every request, nor a reason for every refusal of a record.
(I suggest that you add the minutes of the board meetings to your request to see the records. If the board ignores your requests, then you may have an automatic win.)
9.
The lawyer may argue that you have a personal vendetta against the board and that all the other owners are innocent victims of your political games so the judge should dismiss your claim and award the corporation punitive costs to discourage other owners from similar behaviour.
10.
In one recent Superior Court case (February 2012), a group of owners used this argument against the board members by arguing that the innocent owners should not have to pay the court costs due to the board’s bad faith. The judge partially agreed and made the individual board members shoulder some of the costs.
11.
Once you commence a small claims action, you cannot drop the case without the other party’s consent.
12.
Most likely the manager and the directors will treat you differently after you request to examine records.
13.
I urge you to ask to examine the utility bills as the utility bills make up a very large percentage of the operating costs. You want to see if the bills have been paid in full every month or if the condo is skipping months or just paying a portion of the monthly utility bills.

At one large condo, the administrator and property manager were not paying the monthly water bills so the owners were being charged $2,000 a month in late penalties.

There are boards who will ignore an owner's written requests to examine the corporation's records. Most of the time, the owner gives up.

However, if this happens to you, then you have to decide whether or not you will go to Small Claims Court.

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