Wearing the right hat: Managing condo owners’ expectations
Picture this: It’s a sunny Saturday morning, and a condo board director has just stepped out to grab the morning paper before settling in for a relaxing breakfast. As she turns to go back inside, a neighbour starts a long-winded rant about the most recent condo board decision. Sound familiar? For condo board directors, this is likely a familiar situation. This happened to me many times. One of the biggest challenges of being on a condo board is managing condo owners’ expectations of directors. Condo board directors are owners too, so this can be tricky!
One very annoying situation directors often complain about is something to the effect of “I hate when owners come up to me in the hallway with a problem.” So how can this be dealt with?
The best way to ensure that owners understand the two hats directors wear is to create job descriptions for directors and owners, and to include specific role and responsibility descriptions. I recommend creating a written document and sharing so owners can easily find it. Educating owners on the different hats requires excellent, continuous communication; boards need to do everything possible to facilitate it.
The Two Hats: Roles of Owners & Directors
Owners
Not likely to be experts in governance
- Attends AGMs
- Runs for the board
- Brings up condo issues
- Respects the privacy of directors as owners except at AGM or special meetings
- Reads & understands rules, declaration, and bylaws
- Self-serving interests
Board of Directors
Knowledgeable about governance
- Facilitates annual general meetings
- Listens to issues
- Insists on privacy at home
- Expert knowledge of rules, declarations, and bylaws
- Fiduciary responsibility to the condo corporation
Director Fashion Faux-Pas: How to Avoid Wearing the Wrong Hat
A condo owner who is also serving on the Board of Directors must be prepared to wear two hats:
Director Hat
To be worn during meetings; directors must make decisions that ensure the well-being of the condo corporation (known as fiduciary responsibility).
Owner Hat
To be worn at all other times; this allows for self-serving interests.
Respecting the Hat
During my time serving on my condo board, I learned firsthand how difficult it can be for directors to fully understand their fiduciary responsibilities and for owners to understand the reasons behind the board’s decisions. For example, imagine the board is debating a $10,000 special assessment for a window replacement project.
A director might think, “I don’t have the money for this right now,” and wish to vote against it. This director has taken off their board hat and put on their owner hat – not good practice during a board meeting. If the window replacement is required to ensure the soundness of the building, directors must vote in favour (even if it causes financial hardship for a director). It is even harder for the owners to understand why the board needs to implement a special assessment now.
Owners need to understand that directors make decisions in the corporation’s best interests. Communicating the reasons for a special assessment or any fee increase, for that matter, is necessary and becomes second nature for a board that has internalized the philosophy of openness and transparency, two key aspects of good governance. Managing condo owners’ expectations will help directors considerably.
In the meantime, the next time my neighbour sees me walking outside and assumes I’m wearing my director hat, I will politely remind her that I’m an owner too and suggest that she forward any complaints through the appropriate channels.
Did you know that January 15th is National Hat Day?
Editor: Pat Crosscombe
Founder & CEO BoardSpace
Pat writes extensively about best practices in board governance and management for condo and nonprofit boards of directors.
1 Comment
Submit a Comment
This site uses Akismet to reduce spam. Learn how your comment data is processed.
If you re a landlord or just looking to make money with real estate, it s crucial to understand how to manage a property the right way. It s not just about knowing how to fix things when they break. As a property manager, especially as a first-time landlord, you ll be forced to wear many hats. How you manage that property is going to either make or break your chances for success.