Spending from the Reserve Fund

Dear Betty

As the treasurer for a Condominium Corporation in Calgary, I am writing for some assistance on the clarification of reserve fund expenses/common property. This past summer we had to remove and replace a number of trees on the common property of our complex because they were becoming a hazard. The current board, along with myself believe that this is a reserve fund expense because the trees are on common property, coming under landscaping of the complex. The former treasurer says it is against the law to take these funds from the reserve fund because trees are not depreciating assets. Do you have any advice or know where we can obtain further clarification?I would appreciate any information you can provide me. Thanks in advance, J.


J.,

first, on our web site, www.condo-check.com, we have a Trades and Service Directory that contains the contact information for companies in the Condominium industry that can assist with a variety of condominium matters.

Regarding your question regarding the use of the reserve fund money. A condominium corporation can use the money in the reserve fund for repairs, maintenance or replacement of any items that are listed in the reserve fund plan. In the case of the tree removal, if landscaping is a line item, then yes, funds can be taken from the reserve. Reporting of this activity is to be done in the annual report that is to be provided to the owners at the Annual General Meeting of the owners.

The Condominium Property Act of Alberta, and the Condominium Property Regulation is what governs the condominium reserve fund.

Cheers!

Control by Two Majority Unit Owners

Dear Betty

Thank you for a very informative site. We have recently purchased a condo in southern Alberta (Lethbridge). Within this complex of 60 units, two persons (related) own 14 of these units. In the annual general meetings, due to poor attendance from other owners, we have noted that whatever these two gentlemen feel is in the best interest of the project, will get voted through due to their control of the vote. In reality, these two gentlemen rule the roost. I am uncomfortable with this, other than hunting down the other owners to ensure their attendance, is there any other way we can ensure that these "majority vote" owners cannot control the decision making? Any advice would be greatly appreciated.
M.H.
Lethbridge


Answer

Your problem is not a simple to resolve if owners don't get involved. Yes these gentleman can control who is elected to the board with having such a large vote. Your bylaws will state the number of people required to be on the board. My advice to you is to fill the board positions allowable in the bylaws. At the board level each member has one equal vote. This means if there are only 2 of them and they are elected to the board, and you need a board of 5 or 7 members, that they will be outnumbered when it comes to the voting at the board meetings (which is where all the decisions are made). The AGM is the only time the number of units one owns counts during the voting process.

Best Wishes
Betty's Condo Owners Club
www.condo-check.com