Just who answers to who in a Strata Corporation?
The STRATA CORPORATION NW 628 (SCNW) is the legal entity that is responsible for the administration of all accounting, tax, financial, management, and legal affairs pertaining to the HUNTLY WYND community.
In a corporation, there are shareholders. In this case, all who owns a townhome at HW is a shareholder of SCNW in equal proportion to anyone else. No single owner has a bigger share than anyone else.
The STRATA COUNCIL is entrusted the management of the corporation.
In an ordinary corporate organization, there are nominated or appointed “managers” that handle the operational administration and management of the company’s affairs. These administrative personnel are directly responsible to the Executive officials of the corporation; who, in turn, ultimately report to the Board of Directors. The Board of Directors, on the other hand, are responsible to the shareholders, who are at the top of this hierarchy.
At HUNTLY WYND, owners (shareholders) are at the top of this organizational chart. In essence, they are the “BOSS”. It is not the other way around.
The STRATA COUNCIL, in essence, is ultimately responsible to the OWNERS for the positive or negative results of the strata corporation’s fiscal affairs.
STRATA MANAGEMENT COMPANY (BAYSIDE)
Since SCNW, as a corporation, exists only as a legal entity, not as an actively engaged business establishment with offices and staff, the STRATA COUNCIL, in order to carry out its obligations to the OWNERS, entered into a management contract with a Property Management organization (BAYSIDE). In this contractual relationship, BAYSIDE’s role is to administer all legal, contractual, and financial affairs of SCNW. They track all payments to the corporations, pay all the bills, and manage banking and investment transactions for SCNW.
As part of their services, they also provide guidance and counselling to the STRATA COUNCIL with respect to legal responsibilities.
As BAYSIDE, as a property management company, has several other clients for whom they provide similar services, they have assigned a STRATA MANAGER to SCNW – SCOTT UNGER. In effect, he serves as a liaison between the STRATA COUNCIL and BAYSIDE. He is ultimately responsible to BAYSIDE (and neither to the STRATA COUNCIL nor the HW owners).
THE LINE OF RESPONSIBILITY and ACCOUNTABILITY
Here is the line of responsibility and accountability:
UNGER represents BAYSIDE in the contractual property management agreement and is responsible to his company (BAYSIDE).
STRATA COUNCIL works with UNGER to fulfil its mandate (to oversee the interests of Owners). It ultimately answers to the Shareholders/Owners.
OWNERs have a dual role. They are owners of SCNW but they are also CLIENTS of SCNW. As clients, they are bound by rules, regulations, and bylaws governing the STRATA CORPORATION.
It is this “dual role” that could raise some problems.