Wearing the right hat: Managing condo owners’ expectations

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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 neighbor starts a long-winded rant about the most recent condo board decision. Sound familiar? For condo board directors, chances are this is a familiar situation. This happened to me many times.  One of the biggest challenges of being on a condo board is finding a way to manage condo owners’ expectations of directors.  Condo board directors are owners too, so this can be tricky!

One very annoying situation that directors complain about often is usually 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 is to make sure that owners understand the two hats directors wear is to create job descriptions for directors and owners and 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 and continuous communication; boards need to do everything possible to facilitate that.

The Two Hats: Roles of Owners & Directors

 

Owners

Board of Directors

  • Not likely experts in governance
  • Attends AGMs
  • Runs for the board
  • Brings up condo issues
  • Respects privacy of directors as owners except at AGM or special meetings
  • Reads & understands rules, declaration, and bylaws
  • Self-serving interests
  • Knowledgeable about governance
  • Leads AGMs
  • 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 first-hand how difficult it can be for directors to fully understand their fiduciary responsibility and for owners to understand the reasons behind the decisions made by the board.  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 their owner hat on – not good practice during a board meeting.  If the window replacement is required to ensure the soundness of the building, directors must vote in favor (even if it causes financial hardship for a particular 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 best interest of the corporation. 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.

In the meantime, the next time my neighbor 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.

Do you have a tip for dealing with awkward owner/director interactions? Tweet us @BoardSpaceinc or share it on our Facebook page.