Section 55(1) of the Condominium Act (the “Act”) requires corporations to keep adequate records, including financial records, minute books, condominium documents, and reserve funds studies. A corporation or director that knowingly fails to do so may be found guilty of an offence under the Act and could be subject to substantial fines.
A unit owner, purchaser or mortgagee, or their agent, may, by written notice to the corporation, request to examine the records of the corporation at a “reasonable time” and for “all purposes reasonably related to the purposes of (the) Act”.
When presented with a written request to examine records, a corporation will often attempt to determine the extent to which it is required to comply. The courts have examined this issue on a number of occasions and have made findings which assist in reviewing such a request.
The courts have found that, at first instance, it is up to the corporation to decide what notice is reasonable and what is a reasonable time and place for an owner to examine records. This means that a corporation need not respond to requests for immediate access to records, especially where the records to be reviewed are voluminous. However, this discretion must be exercised reasonably, and requests showing genuine urgency shown due attention.
A request to examine must also contain an explanation as to how the request related to a purpose reasonably related to the purposes of the Act. A requesting party must therefore specify the reason it wishes to examine the records. The courts have found that the reason must be reasonably narrow and relevant. There is no obligation to respond to requests for numerous documents and/or for ill-defined reasons, where the requesting party simply wishes to go on a “fishing expedition”.
The courts have also looked harshly on unit owners who conduct a “campaign of siege against the management office” by making numerous, repetitive requests for documents within a short timeframe. On a related note, the Act only requires for records to be examined. A unit owner is not entitled to engage in an investigation of directors, officers or managers through written questions or request information which is not part of the corporation’s records.
Section 55(4) of the Act, provides three exceptions to the right to examine records – records relating to employees of the corporation (except for contracts of employment), records relating to actual or pending litigation or insurance investigations involving the corporation, and records relating to specific units or owners.
Requests which touch upon any of the three listed exceptions can be difficult to analyze, particularly where actual or pending litigation is involved. When in doubt, the advice of legal counsel should be sought to ensure that the corporation is complying properly with its obligations under the Act.