Condominium fees are often one of the bigger concealed fees that condo buyers often forget to fully take into account. Even if you own the condo out-and-out you may still have to pay condominium fees in for as long as you have the property.
The condominium corporation needs money to meet its financial obligations – paying for insurance premiums, snow removal, grass cutting, repairs to common property, reserve fund, etc. The main source of income for the corporation is the money paid by the owners in their condominium contributions (often referred to as a condominium fee). Contributions are normally set annually and paid monthly, however the board can levy special assessments (one or more lump sums) if the corporation needs to raise extra funds to meet its obligations.
The board sets contributions by taking into consideration the budgeted needs of the corporation and the unit factors (for each unit). Corporations can change the formula for allocating condominium contributions, if the owners pass a special resolution to amend the bylaws. Make sure you know how your condominium contributions are calculated. Be aware that condominium contributions can and do go up! A condominium corporation has the right to collect unpaid condominium contributions.
The condominium corporation can:
- Ask the owner’s mortgage company to pay the outstanding amounts and add it to the owner’s mortgage
- Require an owner’s tenant to pay the monthly rent to the corporation to cover the unpaid condominium contributions
- File a caveat against the title to the unit at the owner’s expense • charge interest (up to 18% per year on outstanding amounts)
- Sue the owner for all outstanding contributions, interest and its full legal fees
- Foreclose on the title to the unit
The board of directors, elected by the owners, makes most of the decisions on the running of the corporation. As an owner of a unit you have the right and obligation to vote. The Condominium Property Act determines your voting rights, the bylaws of your condominium corporation and by the unit factor for your condominium unit. At most general meetings, votes are conducted by a show of hands. The bylaws clarify who has the right to vote if more than one person owns the unit.
Bylaws permit owners to ask for poll votes at meetings. In a poll vote the person’s share of the unit factor assigned to the unit determines the weight of that owner’s vote. You may exercise your right to vote personally or by proxy. If you have a mortgage, the first mortgagee may have the right to vote in your place if it gives the corporation written notice of the mortgage. If you owe money to the corporation for 30 days or more on the day before a vote, you lose your right to vote. Owners can vote on matters presented at any general meeting and on bylaw changes, changes to the common property and other matters permitted under the Act, regulation and the bylaws. It is important that owners vote to elect the board of directors and to change the bylaws.
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