Developers monopolizing condo board through proxy votes

[w.ll.am]

Well....

We had our elections a few weeks back and the developer proxied 50 votes for the 2 individuals who got voted in. This essentially guaranteed their win as only 50 people showed up to vote in person for the president/vice-president. While this is technically all legal it seems this is a bit of a loophole for developers to get people elected who would see things get done the way the developer wants them done.

I don't really feel this is our developer is doing this but I really do feel that there is easily room for abuse by a developer who still holds many units on election of board member. This equates to someone owning 50 homes and getting 50 votes in a municipal election.

The system needs to be changed slightly to only allow 1 vote per owner ... not per unit.

And I know some of you know which building I live in and who the developer is but please keep it out of the thread.

 

[Eldona]

Proxies are permitted by the Ontario Condominium Act 1998 and there’s nothing we can do about it unless we successfully lobby to change the Condo Act. Unfortunately, proxy ratios and a per-owner system are not possible and they are also inherently unfair.

 

[w.ll.am]

This mainly applies to the glut of units that is left when the condo is registered. A small amendment to the Act that limits voting of the developer would probably be enough to prevent problems.

 

[Eldona]

A small amendment to the Act that limits voting of the developer would probably be enough to prevent problems.

But who would vote if they don't? There's no other way to do it and like any other owner, they have that essential legal right to vote on their property.
Rosario Marchese, CCI / ACMO and OCHLRC are only a few groups working on revising the Condo Act, and they all have different approaches that will curb only a few of the problems.
The Condo Act is a consumer nightmare but it saves its worst side for people who buy new.

 

[Granny]

I found our first election to be a real eye opener. I think everyone who came out to vote that night probably went back home feeling disgusted and frustrated. I wonder how many left feeling a sense of forboding. I know I did.
Aside from the education I recieved, it was a waste of an evening.
It did not take a genius to figure out that if even if there had been a 100% turn out that night (and there was a very good attendance), the results would not have been any different with the number of candidates on the chalkboard fragmenting the votes.
With all the builder's proxy votes strategically channeled to two indviduals , the win and henceforth the control of how the building would be run for the next couple years was comfortably theirs. Hell, one of the winning candidates simply mailed in his nomination and never bothered to even show up. I don't blame him.
As a result of that election, I can't help feeling that the residents may have a few more nasty surprises coming their way in the future.
Legally correct and morally wrong, but it was a message sent to all who were a part of that meeting.
With regards to the Condo act being changed, that meeting could be used as a textbook example of what should not be allowed to happen.

 

[CN Tower]

This mainly applies to the glut of units that is left when the condo is registered.

w.ll.am, that's the developer's property. He owns those units and presumably would love to sell them at a fair price . I doubt very much he wants to tie up his capital in a building once it's completed.

The Developer still owns xx% of the building. Why should the Developer not get xx% say in how the building is run? I can't think of anything more equitable. It is a corporation after all.

I never cease to be surprised how so many people who plunk down what amounts the largest single investment of a lifetime for most can be so ignorant. All these issues were decided at law many years ago. Nothing new except for your first hand experience which Granny pointed out can sometimes be a hard lesson.

 

[Eldona]

...Hell, one of the winning candidates simply mailed in his nomination and never bothered to even show up. I don't blame him....

Well, that's the first Board member you should hoof out the door.
He doesn't even show up at the first meeting? Ignorant or what! Go ahead, blame him, that's exactly the person you don't want on a Board.
In these new downtown high tenant:resident owner ratio buildings, resident owners won't stand a chance, whether it's now, a year from now, or 5 years from now.
Knowing the Condo Act means one thing only: you won't buy a condo.

 

[w.ll.am]

The Developer still owns xx% of the building. Why should the Developer not get xx% say in how the building is run? I can't think of anything more equitable. It is a corporation after all.

The developer can be considered to have a conflict of interest. Voting in who they want can lead to not getting fixes done on the building. I am not saying that my experience is going to turn sour but I am saying that this system is easily corruptable. And why does someone who owns more of the building have more interest in how the building progresses than anyone else just because they own more? I'm actually not even against a few more votes... I'm against having the ability to totally dominate a vote and making it so an individuals vote does not even matter.

 

[CN Tower]

And why does someone who owns more of the building have more interest in how the building progresses than anyone else just because they own more?

Ya, I guess you're right. I own one share of Bell Canada that my grandpa bought for me when I was born so I should get equal say at shareholders meetings to Ontario Teachers' Pension Plan because I have a Bell phone line.

 

[Eldona]

The developer can be considered to have a conflict of interest. Voting in who they want can lead to not getting fixes done on the building... And why does someone who owns more of the building have more interest... just because they own more?... I'm against having the ability to totally dominate a vote...

Well, it's not a conflict of interest, it's a representation of interest.
And happily, it's the other way around: for as long as the developer is involved and wants to sell a bunch of units, the building will look good and the common expenses will be low (in fact, too low to actually support the building expenses).
When you get a Board composed of owners who 1) want to keep the common expenses unnaturally low in order to prop up their resale prices and 2) want to make a few hundred more dollars a year as individual "investors" by skimping on maintenance, now that's when the building will go to seed.
After the developer edges out of the scene, you will find that your Board of Directors - who by that time are almost invariably untrained, unsupported, unpaid resident owners - will be scrambling around trying to make quorum for the AGM by getting owners to sign proxies - and just like the developer, they will be ALSO be accused of dominating the vote!
At least the Condo Act treats owners and Boards equally badly.

 

[w.ll.am]

Ya, I guess you're right. I own one share of Bell Canada that my grandpa bought for me when I was born so I should get equal say at shareholders meetings to Ontario Teachers' Pension Plan because I have a Bell phone line.

Residential buildings should not be treated like a corporation. They are the homes where people expect to be able to have say in the decisions that affect their surroundings. Voting in a condo should be similar to voting in a member of council.

Thanks Eldona for your insight. It looks like you have a bit of experience in such matters. While I've been living in condos for awhile now this is the first one I've been in right from the get go. My other experiences where actually quite fine but this initial experience was a little shocking for all involved.

 

[interested]

Actually, there is good and bad having the developer involved. Generally, the developer votes people who do have property management experience or are in the business. It takes time to get a board up to speed of new home owners/non real estate involved people. This can actually be quite a good thing for all owners.
However, it must also be remembered that the developer has a vested interest in having a "friendly board" to him as they are unlikely to push hard about getting things done that may cost the developer alot of money. Here the interests of the owners and the developers may diverge and it is important that the owners interests are protected.So it would be important to get some board member representation looking out for the owner interests. In the case mentioned above by w.ll.am, the fact that the developer still owns 50 units does in fact help you I believe as he has a vested interest to ensure that the building is well maintained and run(so he can complete his sales). Obvious the last statement is said with the above caveats.

 

[CN Tower]

Residential buildings should not be treated like a corporation. They are the homes where people expect to be able to have say in the decisions that affect their surroundings. Voting in a condo should be similar to voting in a member of council.

Your words serve only to enforce my earlier comments on the ignorance of the buying public. Condominiums are corporation regardless of what you believe. You get a vote equal to your proportionate share of ownership. It is widely accepted that this is the most equitable method of management. Do your research next time and you (and others) won't be surprised by the outcome.

I hope you enjoy your new home regardless. Board issues are a huge pain and better left to those who actually have the time and interest in addressing them seriously.

 

[Eldona]

Holy cats, CN Tower, you'd murderlize the people in our building. Do you know how many people in our condo have walked up to Security after they bought the unit, and asked to speak to the "owner" of the building? Do you know how many people have ordered me to "lower the maintenance fees" - not that there actually is such a thing as "maintenance fees"? Do you know how many people in our building don't understand that it's not permissible to stuff 10 people in a one bedroom, or to throw their garbage into the hallway for pickup by the superintendent? Boy, I'd want you around to set them straight.

 

[w.ll.am]

Your words serve only to enforce my earlier comments on the ignorance of the buying public. Condominiums are corporation regardless of what you believe. You get a vote equal to your proportionate share of ownership. It is widely accepted that this is the most equitable method of management. Do your research next time and you (and others) won't be surprised by the outcome.

I hope you enjoy your new home regardless. Board issues are a huge pain and better left to those who actually have the time and interest in addressing them seriously.

I didn't say I believed that they weren't run as corporations. What I said is they should, emphasis on should, future tense, not be run as corporations. This is a discussion about the problems with condo boards not my unawareness of how they work which I have already admitted as much to. Please continue adding your very helpful and informative input however.