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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:

The basics
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 board
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.

The financials
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."

Approval 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.

At their 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 in Toronto.

-- Posted: Nov. 14, 2005
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