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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