Wednesday, July 26, 2006

Special Assessments and the Power of the Board

The answers and comments to this concern is in Red , embedded in the comments.

Hello,

I am a condo owner in downtown Calgary . I purchased my unit 5 years ago. Recently, our board decided to have our lobby repaired. Apparently, the floor tiles were falling apart, so they have all been removed and are being replaced. Also, there was a waterfall that leaked and so, not only was it dismantled, but a new one is being built because the board decided to do so. The owners are being charged $100,000 for these repairs; my share comes to $850. I was under the impression that any major changes in a condominium should be decided by a majority vote by the owners, and not by a few board members. Is this correct? The Board is responsible for making these decisions and is not required to bring these to the owners for a vote. If the owners do not agree with the decisions of the Board they should state so in writing and bring this to the attention of the other owners at the Annual General Meeting of the Owners. Elect those Board members who you are confident will make decisions that are in the best interest of all owners and the property as a whole.

This is not the first time we that we have been forced to pay "Special Assessments." Every year since 2001, there have been financial shortfalls and some major construction defect that needed repairs. The condo Developer, has not only refused to correct these defects, but they are suing the owners over petty issues. We have tried, with little success, to have the Developer take responsibility for their actions - or INactions. They seem to be "untouchable." I don't know why.

Every year, the burden falls upon the owners to deal with the building's deficiencies. My unit, for instance, has a patio door that blows open in the wind, a glass pane that rattles and flecks of dried paint on the patio door. Also, my entrance door (hallway) was never properly painted. If that wasn't enough, my living-room windows were leaking during the heavy rains, last summer.

I had some other deficiencies but they were corrected, only after much persistence on my part. Other owners have unit defects, as well.

Am I legally obliged to pay this $850 Special Assessment? It seems more like a ransom demand. How do I know the money is not going to be pocketed by individual board members / managers? How do we know that the lobby repairs are being done properly? I find it hard to trust anyone, vis-a-vis this building. If you are concerned over the handling of the money you can suggest that the board put a Fidelity Bond in place in an amount that will cover the amount in the Reserve Fund Account and the Operating Account. As an owner, you have the right to request information under Section 44 of the Condominium Property Act. You would be required to make the request in writing and the board would then be obligated to provide the documents to you within 10 days. You could ask for copies of the Board meeting minutes and the financial Statements showing the months the money was collected and spent. The Act also allows that a board may charge a reasonable fee for providing the documents.

I have paid for my condo in full, I have never missed a monthly condo fee and I have always paid the demanded Special Assessments. But enough is enough. Is there not some limitation as to how much condo owners must pay for the irresponsibility of the vendors / condo board? The Board has the responsibility of maintaining the buildings and with it the power to collect the money it requires to fulfill this responsibility. The board is to act reasonably and in the best interest of all owners and the property as a whole. You may find it benefitial to sit down and talk to the board members. Ask them why they have not pursued the Developer for recovery of deficiencies, ask when the maintenance and repairs will be completed and when the demand for money is expected to end. Assume the Board members are doing their best to get the building repaired in a timely manner and as reasonably as is possible. Expect them to answer your questions in a reasonable amount of time and to respect your frustrations. You may want to consider getting on the board as this would give you the ability to be involved in the decision making process. Remember, the board members are volunteer owners who are also responsible for paying their share of the assessment. Over the past 30 years I have not come across boards that charge these assessments without there being good cause as they impact them personally as well.

Your feedback would be greatly appreciated.

Thank you.

JS

17 Comments:

At August 2, 2006 at 12:40 PM, Blogger Condo Owner said...

Is is possible to use the funds in a reserve fund for emergency repairs even if these repairs were not listed in the reserve fund study?

 
At November 26, 2006 at 8:57 PM, Blogger Condominium Owners Blog (Bernie Winter) said...

Money in the reserve fund can only be spent on itms listed in the reserve fund study.

 
At November 9, 2007 at 3:23 PM, Blogger Lunia said...

This comment has been removed by the author.

 
At November 9, 2007 at 3:24 PM, Blogger Lunia said...

Hi, we bought a condo with the hopes of keeping it for retirement. We have rented the condo out, however the board is putting more restriction to disuade people from renting, for example they require that the tenant give 3 months security rental, plus the owners to pay three month's maintenance fee. We were fine with the maintenance fee but, think the 3 months security is outrageous. Can they do this. The whole reason for us buying a condo versus a coop was to have the flexibility of renting. Can we not have our renters pay the security charges. What are our rights as owners? What happens if we do not follow these new rules, which were not in place when we bought the condo?

 
At May 1, 2008 at 9:33 PM, Blogger Neoxbahamut said...

Hi we have a special assessment
thrown at us by the board requesting 1500 dollar by this date to repair a molded common element. like a little office building. 1st of all is it mandatory under the condo Act that they have to replace the building or can the owners vote to demolish the building. 2nd there was no estimate or quotation or breakdown of the actual cost. All was stated in the letter was that 1500 bux is required to re do this building. Therefore does the board has the right to collects the funds from the owner without a breakdown of the fund being used? Also if the majority of the unit disagree to replacing that building can we just demolish it?

 
At May 5, 2008 at 9:18 PM, Blogger Avon in Canada said...

With the amendment to the Act in 2000 regarding doors and windows (Alberta) being "common elements" and therefore should be provided for in the Reserve Fund, can an owner be forced into a levy when there is more than adequate funds to replace windows at the end of their life ecxpectancy?

 
At December 4, 2008 at 5:54 PM, Blogger blue said...

I have been living in my condo unit for 20 months and there is no association formed. Since I bought the condo pre-construction I was aware there was no association at the time of purchase. The building is not being maintained and many code violations are being committed by tenants and owners. The supposed manager does nothing to fix the problems. What can I do to form a condo association?

 
At June 21, 2009 at 8:34 PM, Blogger Lorraine Oberg said...

I am one of 21 condominiums in Edmonton. 6 are side by side walkouts, one is a stand alone walk out and 14 are above ground side by side units. The condominium fee structure is that 17 units pay the same fees and 4 pay a bit more. When looking at the higher cost of maintenance and value it doesn't seem proper that the condomiunium fees are the same for the walk outs and the ordinary units. How does our Board change those By Laws to change this structure and can you advise us who to contact to help us in the restructure. I look forward to your early reply and thank you in advance.

 
At February 11, 2010 at 3:22 PM, Blogger weatherman said...

We have lived in our condo for 1 and a 1/2 years ,we have just been hit with our third assessment. The assessement is to pay a law firm who has been trying to sue the developers for the last 5 years and has been unsuccessful for bad workmenship,if the board keeps approving the amounts do we have to keep paying

 
At May 25, 2010 at 10:37 AM, Blogger HMC said...

Our complex has been hit with two special assessments, one totaling a minimum of $2600.00 per owner and the other $4200.00. Most owners will have to beg, borrow or steal to come up with so much money on such short notice. This is to pay for a structural flaw (crack in foundation/underground parking), and the building was completed only three years ago. What I'm wondering is: Why is it that the developers are "untouchable"? Why won't insurance cover these costs, and do owners have even a slim chance of recovering this money? Why is it legal for the management company to charge prime plus 2% on late payments, and place liens on titles? As I stated to the management company; if we all had that kind of money available on such short notice, why would we be living in condos?
$2,538,000.00 is the total cost of the repair, and the complex is insured for $58,000,000.
I'm too young to have the kind of high blood pressure this issue has caused!

 
At March 3, 2011 at 11:29 PM, Blogger Unknown said...

We got a special assessment too.
It's $28,000 and I am supposed to pay it in 3 months otherwise I would be put into collection.
The board made a decison without consulting the owners at all. Is it right? Do owners have any rights to vote or not.

 
At May 2, 2011 at 9:52 PM, Blogger lisa said...

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At August 9, 2011 at 10:44 PM, Blogger arrielle_p said...

Thanks for sharing this very informative post. Great read on the questions and answers.


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At October 29, 2012 at 2:58 AM, Blogger Unknown said...

You can get details of special assessment and power of board. Useful post

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At January 2, 2013 at 2:46 AM, Blogger Unknown said...

This is vitally important. Thanks for incorporating these assessments in time
RES

 
At December 29, 2013 at 10:25 PM, Blogger Unknown said...

we just got hit again for anther 100.00 per unit.last dec. it was 80.00. we are now up to 250.00 per mo. these condos are worth about 36,000.00 each. built in 1964. we are clearing out, i think i see the writing on the wall! we are in a flood zone also! I did not know how screwed we were till i checked on line. these people are greedy bastards!!!

 
At December 29, 2013 at 10:27 PM, Blogger Unknown said...

we just got hit again for anther 100.00 per unit.last dec. it was 80.00. we are now up to 250.00 per mo. these condos are worth about 36,000.00 each. built in 1964. we are clearing out, i think i see the writing on the wall! we are in a flood zone also! I did not know how screwed we were till i checked on line. these people are greedy bastards!!!

 

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