Duty of Care to the Condominium Corporation and Unit Owners

A Condominium Manager’s Duty of Care to the Condominium Corporation

A condominium manager has a legal and fiduciary duty to the condominium corporation, acting under the direction of the condominium board. Their primary responsibility is to ensure the corporation’s affairs are managed in accordance with the Condominium Property Act (CPA) and other applicable regulations.

Role of the Condominium Board and the Manager’s Relationship to It

• The condominium board is the decision-making body that oversees the condominium corporation.

• The condominium manager acts as an agent of the corporation, carrying out the board’s directives.

• The board delegates financial, operational, and administrative tasks to the manager, who must act in the best interests of the corporation.

Key Duties of Care to the Condominium Corporation

1. Financial Management

   • Ensure operating and reserve funds are properly handled.

   • Collect condominium fees and track arrears.

   • Follow trust fund requirements under Alberta’s Real Estate Act Rules.

     
     

2. Legal and Compliance Responsibilities

   • Ensure the corporation complies with bylaws, CPA regulations, and ministerial regulations.

   • Maintain all required records and documents.

   • Act in good faith, with honesty, skill, and diligence.

     
     

3. Operational Responsibilities

   • Oversee property maintenance, repairs, and contracts with service providers.

   • Enforce bylaws and condominium policies consistently.

   • Communicate with the board and owners effectively.

Accountability to the Condominium Corporation

• A condominium manager is accountable to the board, not to individual unit owners.

• However, they must also ensure owners’ rights are protected under the CPA.

Key Takeaway:

The condominium manager’s primary duty is to the condominium corporation, acting under the board’s direction, ensuring compliance, financial accountability, and operational efficiency.

Manager’s Obligations to Individual Unit Owners Under the Condominium Property Act 

Although the manager works for the condominium corporation, they also have responsibilities to unit owners, as outlined in the CPA.

Key Responsibilities to Unit Owners

1. Transparency and Communication

   • Provide accurate and timely information to owners regarding condominium affairs.

   • Respond to owner inquiries and concerns professionally.

     
     

2. Financial Integrity

   • Ensure condominium fees are properly allocated and unit owners receive financial disclosures.

   • Enforce fair collection of arrears, without discrimination.

     
     

3. Enforcement of Bylaws and Rules

   • Ensure consistent and fair enforcement of condominium bylaws.

   • Apply fines, warnings, or other enforcement measures without bias.

     
     

4. Privacy and Confidentiality

   • Protect owners’ personal and financial information.

   • Only disclose information when legally required.

Limitations in Dealing with Owners

• A condominium manager does not work for individual owners and cannot override board decisions.

• Disputes between owners and the corporation must follow the dispute resolution processes in the CPA.

Key Takeaway:

A condominium manager must treat all owners fairly and follow legal processes, but their primary responsibility is to the corporation as a whole, not individual owners.

Best Practices for Managing Conflicts of Interest Between the Corporation and Unit Owners 

Conflicts of interest can arise when a condominium manager must balance the needs of the corporation with the concerns of individual owners.

Common Conflict of Interest Situations

Steps to Manage Conflicts of Interest

1. Full Disclosure – Inform the board of any potential conflicts.

2. Fair and Consistent Policies – Apply rules equally to all owners.

3. Board Oversight – Ensure the board approves major financial or legal decisions.

Application Exercise

• Scenario: A unit owner requests that a late fee be waived because of personal financial hardship.

• Question: How should the condominium manager respond?

• Answer: The manager should follow the corporation’s fee collection policy consistently while advising the board if an exception is requested.

Key Takeaway:

A condominium manager must remain impartial and follow established policies to avoid conflicts of interest.

Ethical Dilemmas: Balancing Duties to the Board and Unit Owners 

Condominium managers often face ethical dilemmas when their duty to the board and the unit owners conflict.

Ethical Challenges Faced by Condominium Managers

Ethical Decision-Making Process

1. Identify the Conflict – Determine who is affected and what legal requirements apply.

2. Consult the Condominium Property Act and Board Policies – Ensure actions follow legislation.

3. Communicate with the Board – Seek board approval for decisions affecting the corporation.

4. Seek Legal or Professional Advice if Necessary – If serious conflicts arise, consult legal counsel.

Case Study: An Ethical Conflict

Scenario:

The condominium board wants to fine a unit owner for a bylaw infraction without following due process. The manager knows this violates the corporation’s bylaws, but the board insists.

Evaluation Questions:

1. What legal obligations must the manager consider?

2. How can the manager balance loyalty to the board and fairness to the owner?

3. What steps should the manager take to resolve the issue?

Key Takeaway:

Ethical dilemmas require condominium managers to apply the law impartially, advise the board appropriately, and ensure transparency and fairness.