Condo fees versus special assessments
Q Our condo fees are starting to get too high. I have heard that instead of raising the monthly condo fees you can actually do up a special assessment for the increase each year. If so, do you have to do it up for the whole yearly increase at once, or can you split it into, say, two instalments?
This would definitely help those people out who are a little short on money to begin with. To me, the most important aspect of high condo fees is that prospective buyers will just walk away. Then you are caught between a rock and a hard place when it comes time to sell.
A The board of your condominium corporation is responsible for establishing an operating budget. The board passes a motion setting out the amount the condominium corporation requires from owners to operate the condominium complex on a yearly basis. This amount will determine the monthly condominium fees, usually set on the basis of unit factors. Section 39 of the Condominium Property Act sets out the board’s power to raise sufficient funds/money from owners to allow the condominium complex to carry out its duties and responsibilities.
I would never recommend funding operating expenses through annual or semi-annual special assessments.
Furthermore, the Condominium Property Act limits the purposes for which condominium corporations may assess a special levy. Section 39.1 of the Condominium Property Act states that special levies may only be assessed for the payment of unexpected and urgent maintenance, repair or replacement of the real and personal property of the corporation, common property or managed property; covering unexpected shortfalls in the operating account; increasing the balance of the reserve fund; for the payment of a capital improvement; and to satisfy a judgment against the corporation.
Helpful Hint: Budgeting is not an easy process. It is important for boards to be transparent. The law in Alberta requires boards to provide a copy of their approved annual budget to their owners at least 30 days before the start of the new fiscal year.
Roberto Noce, Q.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at albertacondolaw@millerthomson.com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances. Twitter: @Robertnoce.