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21 November 2015
Condo Business
Consider this scenario: At the first meeting of a newly elected condo board, the property manager advises the board members that they need to appoint a lawyer to represent and direct the corporation on any legal matters related to the condo corporation.
In response, one board member suggests that his brother-in-law’s daughter, who just graduated from law school, could assume this task. Since she has just started her own practice, he adds, she may not charge as much as other lawyers. Everyone in the room gets excited. This fictional scenario is one that has played out in real life, with slight variations, at many board meetings.
But wait a minute: Does this lawyer have the expertise to advise the corporation? Condominium law is complex and constantly evolving with the latest court decisions. And as more people choose to live in condos, new legal issues, such as whether corporation documents permit the type of short-term rentals facilitated by sites such as Airbnb, emerge. Recognizing the changing landscape, the Ontario government is currently working on reforming condo law with the proposed Protecting Condominium Owners Act. For all these reasons, corporations require the advice of an experienced condo lawyer.
An experienced condominium lawyer should be able to provide the corporation with clear opinions, practical legal advice and creative solutions to problems. Initiating a lawsuit is not always the preferred approach. Litigation can be very costly and the outcome is never certain.
For example, a corporation that is negotiating performance audit deficiencies may think that going through the courts is the most practical avenue to take. However, it may take a few years to go through the process, with legal and engineering fees mounting every step of the way. An experienced condo lawyer should be able to provide the most cost-effective approach, possibly by recommending negotiating a settlement with the declarant whereby the corporation agrees on an amount and then takes responsibility for effecting the repairs. The lawyer would also ensure that the proper releases are signed without compromising any future issues the corporation may encounter.
In addition to looking for an experienced condo lawyer, corporations should also consider his or her firm’s fee structure, response time and extra services.
Fee structure
Before appointing a firm, ask how it charges for legal advice: a flat rate or by the hour? Does the firm charge for every phone call or email?
If a corporation sends an email or leaves a voice message, it may be charged for both, even if it received no reply. It’s common for a lawyer to record a five-minute phone call, or an email, round the fee up to fifteen minutes of legal advice, and bill the corporation for it. At a rate of $400 per hour, that would cost the corporation $100.
Note: A lawyer who offers a cheaper rate but lacks condo experience may cost the corporation a lot more in the long run. A lawyer without condominium experience will likely take more time to research and answer a question than a lawyer with condominium experience.
Response time
Also look for a lawyer who will reply to the corporation within 24 hours, not four weeks later. Response times can be critical and expensive.
To offer a real-life example: A discussion arose during a board meeting, with regard to a unit owner that had distributed a confidential email to a number of other unit owners. The property manager and board members agreed that the board members required legal advice to deal with it. The property manager called the corporation’s lawyer on her cell phone and was able to get the right legal advice in no time, which allowed the board to move forward on the item. In this particular case, the lawyer’s advice was to: 1. email the unit owner to request that he immediately refrain from distributing the confidential communications; and 2. email the other owners to advise that the communications were confidential and to request that they delete the e-mail chain immediately and not to further distribute same.
Extra services
Find out what other services the legal firm offers. Does it host seminars about condominium issues? As new legal developments occur, these seminars can be very helpful to affected condo corporations. Does the firm publish bulletins or maintain a blog which board members can choose receive via email or mail to stay informed and up-to-date?
Last but not least, take the time to meet with the prospective lawyer. Don’t be shy to ask questions during candidate interviews. A questionnaire isn’t a substitute for a personality fit.
To recap, the corporation should consider fees structure, response time and extra services when appointing a lawyer. But above all, the corporation should prioritize condominium law expertise. And for that reason, the board in the hypothetical scenario cited earlier would be wise not to hire the cheap but inexperienced lawyer related to one of the board members.
Shlomo Sharon is CEO of Taft Management Inc. and a member of CCI since 2002. Taft Management Inc. is an ACMO 2000 Certified Property Management Company and has been providing property management services since 1996. Visit the website www.taft-forward.com for further information or email him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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