For the many who are not familiar with financial statements, they may not recognize the absence of a Balance Sheet and Reserve Fund Report with the monthly reports disclosed. They reflect where most of our money is being spent. Why is this being concealed from residents? Unfortunately, the commercial owner owns and is in control of the management company and dictates what financial information is disclosed (and not disclosed) to residents throughout the year. The treasurer unfortunately accepts this conflict of interest. Residential Board members avoid any question of this practise and simply accept monthly reports as reported, whether by ignorance, intentional neglect, and most likely both. This year after year absence of complete financial reports must come to an end.
The Board is requested (and obligated) to provide evidence of any of the required approvals by unit owners of Reserve Fund expenditures since the heating system expenditure was completed.
Our treasurer has been questioned many times about this practise which is contrary to our Bylaws and the Condominium Property Act, but refuses to respond to the many questions regarding the incomplete and inaccurate financial reports which are in contravention of Generally Accepted Accounting Principles but nonetheless reported to residents anyway. This is in fact illicit conduct on the part of any professional accountant(s) of which we have two on our Board of Directors, who direct and approve of illicit procedures conducted by Colliers Property Management and the McClocklin Group of Companies”. Yes, residents have been directly advised to act upon instructions from the “McClocklin Group of Companies” who of course have no business in instructing any matters at Spadina Towers.
Unfortunately, many residents have little understanding of responsible and transparent accounting procedures, and as a consequence, both the Board and commercial owner feel free to conduct illicit behavior without any concern for appropriate transparency and accountability. Unfortunately as well, most Board members are not necessarily proficient in accounting or basic property management practices which certainly doesn’t help.
Over and over again, qualified accounting and property management professionals have advised that what Spadina Condominium Corporation requires is INDEPENDENT PROPERTY MANAGEMENT where such accounting and management of resident funds is managed in a credible and transparent manner. Until this is accomplished, residents cannot expect responsible management of the Corporation and particularly transparency with accounting of their funds.
It is most unfortunate that certain Board members have advised that there are too many issues to address at the annual AGM and promised that not one but several, TOWN HALL meetings would be required to allow sufficient time to hear and discuss the many issues of concern to residents. That promise was broken very quickly after it was proposed. The Board is petrified of responsible questioning from residents particularly as it relates to illicit and non transparent practices. In the meantime, Board members have refused to provide residents with any opportunity to hear their concerns. The commercial owner has clearly demanded that this position of avoidance, concealment and disrespect be adhered to by all Board members.
It is most interesting that the Board advises that delays in financial reports were due to “adjustments from the auditors after the full audit”. What are those “after audit adjustments” made by the Auditor? Just how foolish and naïve are Board members to make any such audacious statement? It is requested of the Board to provide a complete report on these adjustments to the 2017 Audit and ensure response to any questions of residents. A good deal of information particularly within the Reserve Fund has been concealed and must be revealed upon the request of any unit owner. Full transparency must be demonstrated.
A number of chapters of the Canadian Condominium Institute are now requiring that all Board members of Condominium Associations complete a course in condominium property management which includes a major accounting component. The Spadina Board of Directors should be proactive in this regard and ensure that all directors complete such a course certified by the Institute. This would be a positive step forward for our Corporation to ensure that our Board members are well informed and help ensure that they are qualified to act in the best interests of our residents.
SPECIAL NOTE TO RESIDENTS
Some residents will continue to ask just why these expressions of concern continue to be made to the Board of Directors.
The answer is obviously very simple. The governance of our Corporation should be guided by the provisions of both our Bylaws and the Condominium Property Act. Our Board of Directors has however consistently rejected these legally required guidelines and effectively rejected and disrespected the interests of residents.
Millions of dollars have been spent in recent years by the Corporation, without the required participation and approvals of residents as is required by our Bylaws and the Act. The Board has intentionally chosen to use their own unilateral discretion on Reserve Fund expenditures and their means of funding, both of which require resident participation and approval.
For many years now, required Reserve Fund Budgets have not been presented to unit owners at a General Meeting. The Board and commercial owner has simply proceeded on their own with the deceptive tactic that they can proceed without residential approval and avoid the required:
- UNIT OWNER APPROVAL OF PROPOSED EXPENDITURES WITHIN A REQUIRED RESERVE FUND BUDGET
2. UNIT OWNER APPROVAL OF THE MEANS OF FUNDING
Instead, the Board has chosen to circumvent these legal requirements and declare Reserve Fund expenditures to be approved solely at their discretion. Further, they illegally declare CASH CALLS to be used as a primary funding mechanism which is in total contravention of our Bylaws.
Legal and responsible management of Reserve Fund expenditures requires regular Reserve Fund contributions within monthly condo fees APPROVED BY THE OWNERS, in order to meet future Reserve Fund expenditures. Residents, who participate in both approval of expenditures and the amount of Reserve Fund contributions, then have some sense of security in knowing what their future financial obligations are.
Cash calls on the other hand are NOT to be used as a primary means of funding. Their illicit and unpredictable use, have caused serious implications upon residents in recent years where they have no idea of what or when a demand for cash will be insisted of them. This well known practise by our Board has become well known within the real estate community and has resulted in severely depressed resale prices at Spadina Towers. If residents don’t stand up for themselves, this illegal conduct will only continue.
Would residents prefer that these many concerns relevant to all, be simply kept in silence at their expense? Any responsible resident would obviously say no and welcome a supporting voice in support of their interests. The above comments are clearly supported by both our Bylaws and the Condominium Property Act. Those who disagree with these comments, must be prepared to demonstrate support of their position with reference to these governing legal documents as well.