Moving to a condominium can be a great choice for many people. You can maintain the independence of private ownership, while still gaining the advantages of shared living, like excellent amenities, security, and a close sense of community.
What many new owners don’t realize, however, is that a condominium is technically a corporation. Like any corporation it has revenue, expenses, employees, and most importantly a Board of Directors who make the decisions on behalf of the owners. When you buy a condominium you are purchasing a share of this corporation, and are eligible to join its Board.
Like most corporations, the success or failure of the business is largely in the hands of its Board. Good decisions and business practices will lead to lower maintenance fees and higher property values, while bad practices can result in higher fees, fewer services, special assessments, and frequent problems with the amenities. This is the only type of corporation that elects volunteers to its Board with no prerequisite experience, and you must remember that you are putting what may be a multi-million dollar budget into their hands. As an owner it is very important that you pick the right people for the job.
A standard Board of Directors consists of 5 volunteers who are elected at the annual general meeting. All owners are entitled to vote, either in person or by proxy if they cannot attend the meeting. While it is impossible to be fully certain that a person is right for the Board, there are certain things that one should look for.
Motivation
The first thing to look at is motivation. Why that person is interested in being on the Board. Be sure to ask specific questions about why they are running. The most effective Board members are those with a genuine desire to improve their living space and protect their investment. The least effective are those who simply want to be in charge.
Experience
Even candidates running for the right reasons may end up as a liability if they do not have sufficient experience to handle the job. Business experience is an obvious asset, but experience working in a team setting may also be valuable. While the corporation will likely hire a management company to handle many of its operations, it is still the responsibility of the Board to oversee their work and make sure the finances stay on track. Make sure your candidate is up for the job.
Goals
The specific goals of the candidate should also factor into your decision. Make sure the candidate’s goals are specific and achievable. A candidate trying to get on the Board to “build a better community” with no realistic thoughts on how to do so, may not be right person for the job. Candidates should be able to explain the reasoning and method behind all of their goals.
Remember, the Board of Directors can mean the difference between a successful, well funded corporation, and one that is falling apart, costing you more than you can afford, with little chance of selling and reclaiming your initial investment. Make sure to ask for a resume and follow up with questions. If after all that there are still no suitable candidates for the job, you may consider running yourself.