We were unable to respond to all of the on-line questions submitted at our Directors’ Liability Seminar. Here are those questions and our answers.
Q: With respect to committees and other volunteers that the Board of Directors uses to assist in the management of a condo, what are the insurance and liability implications to these, should the Board avoid them?
A: Most standard D&O Liability policies protect directors and officers, subject to any exclusions or limitations. If a condominium corporation has committees that have been established by the board, it should ensure that coverage extends to those committee members, otherwise those committee members would not be covered. Any volunteers that participate in condominium corporation activities authorized by the board, should be part of a board authorized committee so that those individuals would be covered under the D & O policy as committee members once coverage is obtained.
Q: Under the new Condo Act amendment, will the board qualifications ‘not to be an owner’ be removed, which means only owners can be on the board?
A: The current minimum qualifications provided for under the Condominium Act require that a director cannot be:
- under eighteen years of age;
- an undischarged bankrupt; or
- incapable of managing property within the meaning of the Substitute Decisions Act.
There is presently no requirement that a director be an owner or a resident in the corporation, however, many by-laws of condominium corporations will add additional qualifications to the minimum qualifications set out in the Condominium Act. If your corporation’s present by-law provides that a director need not be a unit owner and the existing board wants to restrict the qualifications to unit owners only, this can simply be changed by amending the existing by-law.
The Stage Two Solutions Report dealing with proposed changes to the Condominium Act, sets out additional mandatory qualifications which may include mandatory training for first time directors and no more than one person from a unit may be a director. The recommendations do not include requiring board members to be unit owners in the corporation.
