I live in a condominium unit in western Canada which has both a commercial (office space) component (44.31% of unit factors) and 29 individual residential units (55.69%). There are numerous conflict of interest issues which have had a very detrimental effect on the operations of the building and rights of residential unit owners.The management company is owned by the commercial owner. One resident owns 3 residential units (576 unit factors). His interest along with the commercial interest is 50.57%. This resident has been the treasurer for some time. He and the commercial owner have had a commercial relationship for some time. He is a chartered accountant and has provided services to the commercial owner and their related entities.Because of this relationship, the board is elected not freely but with a polled vote where as a result the board is essentially appointed and not elected. The financial statements are not appropriately reviewed at board meetings and whatever the treasurer reports is accepted without question. The remaining board members are inexperienced with property management and even moreso incapable of monitoring and directing management. That is pretty much left to the commercial owner.Residents are not provided with financial statements and it is very difficult to obtain board meeting minutes. Over the couple of years, over $1,000,000 has been spent on capital expenditures that did not received the appropriate approval of unit owners. The board, in order to get around bylaw provisions relating to authorization of capital expenditures, has deemed these to be "repair and maintenance" which does not require a special resolution by unit owners as capital expenditures do. The board also proceeded without sufficient funding arranged before they proceded with these expenditures.As a result, we now have a new heating system with one half the capacity of the previous system. The humidification unit was removed in "order to save money" as the board advised.The commercial owner has made modifications to the heating, cooling and electrical system in common areas without the required approval of unit owners. This has resulted in increased electrical costs being billed to the general electrical meter rather than the commercial meter. The electrical cost to the building has increased substantially since these events have taken place. However, the board continues to claim that there have been dramatic savings in energy costs. A thorough review of energy costs since the completion of the capital expenditures and the commercial owners additions has been conducted by myself and dramatic increases rather than savings have been incurred. The board of course refuses to answer any questions or provide any financial information relating to the matter.A liaison committee was suggested and formed at the last general meeting about one year ago at the request of many disgrunted residents. The board has refused to cooperate with this committee and will not provide appropriate information to residents.The board refuses to provide financial statements and will not answer the the vast majority of questions provided by the liaison committee. The Board recently provided minutes to a meeting where they decided that this committee was of "no value" and is "no longer required".There is much more to this situation but the above relates to some of the more concerning matters to residents. We have been informed that there is nothing that can be done by residents. I have reviewed information on the internet relating to condominium fraud in Canada and it appears that a forensic audit would assist in review and correcting these problems. However, our treasurer is an chartered accountant and has advised the board that audited financial statements are not required. The board becomes very angry when a request for even a general accounting audit is requested at general meetings. The treasurer has even suggested that the management should prepare the year end financial statements and he will review them.I would be interested in knowing if you feel that it would be appropriate to request a review by the commercial crime branch of the RCMP who are familiar with forensic accounting and criminal law.Any comments or direction would be greatly appreciated.Thankyou.Dennis
Province/Territory relating to question: Saskatchewan
My own person legal efforts to simply correct the flawed bylaw provision whereby the commercial owners may nominate and ELECT their nominees to the board whereas the residents do not have the same entiltement and must allow the commercial owner to participate in nomination and election of residents to the board. The court decided that the commercial owner was in fact entitled to this provision of our bylaws.
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