Mak­ing some sense of com­mon condo lingo

Calgary Herald - Calgary Herald New Condos - - New Condos - ROBERT NOCE

Q: Can you ex­plain the dif­fer­ence be­tween a spe­cial as­sess­ment and a levy?

A: The terms “levy” and “con­do­minium fees” are usu­ally used in­ter­change­ably. A levy is sim­ply the amount that the con­do­minium cor­po­ra­tion charges on a monthly ba­sis to op­er­ate the cor­po­ra­tion. Many people would call that their monthly con­do­minium fee (or condo fee). A “spe­cial as­sess­ment” would be the im­po­si­tion of an additional fee for a spe­cific pur­pose.

Help­ful hint: The lan­guage in the Con­do­minium Property Act is some­what an­ti­quated. How­ever, when boards use terms, they should be us­ing them cor­rectly.

Q: Our condo board re­cently sent out a no­tice that there would be a large spe­cial as­sess­ment to each owner due by way of post­dated cheques within two weeks’ time. The let­ter, writ­ten by the property man­age­ment com­pany, did not pro­vide a rea­son other than the board’s pre­vi­ous budget, which was over by $32,000, and some of the as­sess­ment would be used to cover that. Does the board have to pro­vide spe­cific in­for­ma­tion about what the monies col­lected are be­ing used for? Our build­ing has ap­prox­i­mately $600,000 in the re­serve fund, with no ma­jor project.

A: Your ques­tion in­di­cates that your con­do­minium cor­po­ra­tion had a short­fall in its op­er­at­ing funds (its ex­penses ex­ceeded its rev­enue), and that the spe­cial as­sess­ment was go­ing to be used to cover that short­fall. If that is cor­rect, then there are se­ri­ous is­sues that need to be han­dled within your con­do­minium cor­po­ra­tion. First, your monthly con­do­minium fees may be too low to cover the monthly op­er­at­ing costs. Was there an un­usual one-time op­er­at­ing ex­pense for which the cor­po­ra­tion did not budget? If in fact there was a budget short­fall, I would strongly urge you to en­gage the other own­ers and call an ex­tra­or­di­nary gen­eral meet­ing to ad­dress this is­sue. Budget deficits are se­ri­ous and would in­di­cate to me that there is a sig­nif­i­cant prob­lem within your cor­po­ra­tion.

Help­ful hint: Con­do­minium fees should re­flect re­al­ity.

Q: Our condo board is con­sid­er­ing buy­ing one of the units in the build­ing as an in­vest­ment. Is this al­lowed?

A: Sub­ject to your by­laws, the an­swer may be yes. How­ever, I would strongly urge you to seek le­gal ad­vice and also speak to the con­do­minium cor­po­ra­tion’s ac­coun­tant. There may be tax con­se­quences that could have an im­pact on the non-profit sta­tus of the con­do­minium cor­po­ra­tion. For ex­am­ple, the Canada Rev­enue Agency may look at the in­vest­ment as tax­able in­come for the cor­po­ra­tion.

Q: Our con­do­minium cor­po­ra­tion elected a new board at its AGM, con­sist­ing of nine di­rec­tors. I re­cently dis­cov­ered that one of the board mem­bers is a renter. Is this al­lowed? Can renters at­tend or par­tic­i­pate in the AGM with­out a proxy?

A: Whether a renter can or can­not sit on the board will be de­ter­mined by your by­laws. Gen­er­ally, there is noth­ing wrong with hav­ing renters on a board, pro­vided of course that your by­laws al­low for this. With re­spect to your other ques­tion, a renter who does not have a proxy would gen­er­ally not be per­mit­ted in the meet­ing. The AGM is for own­ers or their prox­ies. How­ever, I have been at meet­ings where renters are al­lowed to at­tend to cre­ate that in­clu­sive at­mos­phere. It is re­ally up to the board and the own­ers to de­ter­mine how they wish to deal with that is­sue.

Help­ful hint: Gen­er­ally, renters can play a valu­able role in the qual­ity of life within the con­do­minium cor­po­ra­tion.

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