All about condo boards
Buying and living in a house is simple compared
to buying a suite in a condominium.
"With a condo, you're buying
into a corporate entity, and it's like a little government,"
explains Calgary condo realtor Gerald Rotering.
A group that plays a key role in
this little government is the condo board.
And while you may have heard horror stories about
the power condo boards have and use, most do good jobs and keep
their buildings in good shape. If you're thinking about buying a
condo, or if you already live in one, here's what you should know
about condo boards:
Most condo boards are made up of three to seven people, who are
elected for about a year and typically meet once a month.
According to Donna J. Farr, a condo manager
in Toronto, a board's main responsibility is to make decisions about
the building and its rules on behalf of all owners. "As a manager,
I can provide direction, bring matters to the board's attention,
obtain quotations for review and make recommendations, but ultimately
it is the board's responsibility to make the final decisions."
The board makes decisions on
everything from bylaws to repairs on common elements of the building (such as
hallways and elevators). One of the board's major responsibilities is setting
an annual budget, which includes deciding whether to raise or lower the fees owners
pay to cover maintenance costs.
Understandably, one of the biggest issues boards face
is trying to keep everyone happy, says Peter Harris, a chartered
accountant and condominium auditor who's also a member of the Toronto
chapter of the Canadian Condominium Institute.
"Because board members represent a diverse group
of people, all with differing views and interests, it's obviously
hard to please all the people all the time," he says.
Rotering, who has chaired the board of the 40-home
condo where he lives for six years, says condo residents often falsely
think of the board as "them" and the owners as "us."
But the reality, he says, is that condo boards exist to ensure the
smooth running of the building and protect all owners' investments.
Research your condo and its
Because you have to abide by the rules set forth by your condo board,
it's wise to familiarize yourself with these rules before you make
an offer. Rotering says it's easy to see how a building runs by
looking at the minutes of its board meetings.
However, Toronto lawyer Audrey Loeb says the board
is only required to make minutes available to owners. "(So),
a prospective purchaser would have to get the vendor to request
them on his or her behalf," she says.
In addition to reading over the minutes, you or your
agent should find out as much about the building -- and its politics
-- as you can.
Harris advises asking to see the building's status
certificate, which costs about $100. "The status certificate
is a bunch of documents that you can look over to see if there's
something there that might scare you off. It's a form of protection
for you, because it must disclose a lot of information about the
corporation to you," says Harris.
Examples of this information are the audited financial
statements from the most-recent year, whether there have been any
changes made to the suite and whether there are any liens on the
suite you're buying.
"In other words, if there is any charge, which
has been registered against the title of that property for unpaid
fees or other things, then if you don't learn about it or you see
it and choose to do nothing about it, then it becomes your debt
when you buy that unit," says Harris.
Condo and/or maintenance fees are levied by all boards, and there
is no limit as to how much they can be. Rotering says most condo
corporations today are well-run because of an across-the-board increase
in fees during the last decade or so.
"Bigger condo fees mean that buildings are better-funded
and run better," he says, so don't let high fees scare you
away from a great condo unnecessarily.
He says paying higher condo fees is a good investment.
"I'd rather my board has lots of money to improve the building
than I have the money for, say, a case of beer."
required for remodelling
If you live in a condo and want to make major
changes to your suite, you need to ask the condo board. Painting isn't usually
an issue, "but if you want to put in a second sink or cut into a wall, it
has to be described in writing to the board," says Rotering. After all, the
wall might be holding up the building.
Jamie and Tal Riff moved into a condo in downtown
Toronto at the end of July, and they hope to have a full kitchen
renovation done by a home design TV show, which would include changing
the appliances, sink and plumbing. "We definitely have to speak
to the condo board about it," Tal Riff says.
condo, when making a modification to the suite, the suite owner needs to have
a map of what he's doing to show the board. The couple is a little worried the
board will say no to their request to renovate with the show. Of course they realize
that what the board says goes.
"I feel restricted that the board has to approve
our renovation plans, because I'm worried we'll have a hard time,"
says Tal. "But I think [the rules] maintain the integrity of
the building. And if it started looking like a dodgy apartment building,
it would devalue our unit."
Maya Saibil is a writer