Annual Risks and Responsibilities for Condominium Board Members

Article from Volume 13, Issue Number 1, 2026

Annual Risks and Responsibilities for Condominium Board Members

By Adrian Schulz | Other articles by Adrian Schulz | Feature

Serving on a condominium board in Manitoba is both a privilege and a legal responsibility. As a director of a corporation, you are bound by The Condominium Act (Manitoba) to act honestly, in good faith, and in the best interests of all unit owners.

While a licensed property management company may be retained to handle day-to-day operations through a management agreement, the Board of Directors remains ultimately responsible and legally liable for ensuring the corporation complies with all statutory, financial, and fiduciary obligations.

Below are the key areas every condominium board should review annually to protect the corporation and its members:

1) Budget planning and cost increases

Review the annual operating budget and account for expected supplier and service-provider cost increases. Use the Consumer Price Index (CPI) as an inflation benchmark. Realistic budgeting helps prevent shortfalls, special assessments, and service disruptions.

2) Reserve fund contributions and balance

Confirm that contributions to the reserve fund align with the latest reserve fund study and funding plan. The fund must be sufficient to cover major repairs and replacements of common elements. Underfunding increases financial risk and can reduce unit resale values.

3) Up-to-date reserve fund study

Ensure the reserve fund study is current (at a minimum, updated every five years). A current study underpins long-term financial planning and supports compliance with provincial requirements.

4) Property insurance and appraisal

Verify that the corporation’s property insurance reflects the current cost to rebuild. Commission a professional insurance appraisal at least every five years (per section 185(9) of The Manitoba Condominium Act) to keep insured values aligned with construction and material costs.

5) Directors’ and Officers’ (D&O) insurance

Confirm adequate D&O liability coverage. This protects board members for decisions made in good faith while performing their duties. If coverage terms or exclusions are unclear, obtain written advice from your insurer or legal counsel.

6) Management of delinquencies and liens

Monitor common expense collections and ensure liens are registered promptly for unpaid amounts. The Condominium Act provides for a statutory lien that generally has priority over other encumbrances, including mortgages. Where necessary, initiate foreclosure proceedings to protect all unit owners’ collective interests.

7) Financial/compliance impact on property values

Financial health, insurance adequacy, and compliance records directly affect unit resale values, mortgage eligibility, and insurance availability. Buyers, lenders, and insurers routinely review these indicators. Strong governance preserves market confidence.

8) Oversight of the property manager

Even with a professional property manager, the board must maintain oversight and ensure contractual and statutory duties are met. Delegation does not transfer legal accountability. Verify that the property management company and its representatives are properly licensed under a registered real estate brokerage in Manitoba. Employing an unlicensed manager exposes the corporation and the board to compliance and liability risk.

Serving on a condominium board carries legal and fiduciary obligations. Annual diligence in budgeting, reserve funding, insurance, collections, and governance helps ensure compliance and financial stability. While many tasks can be delegated to management, the ultimate responsibility for compliance and oversight remains with the Board of Directors. When in doubt, seek qualified advice from a condominium lawyer, accountant, insurer, and licensed property manager.

Adrian Schulz is the President of Imperial Properties Inc.

Go Back