Toronto Condo Owners Beware Of Special Assessments
The sad truth is that sometimes scary things happen in Toronto real estate transactions, and something that all condominium owners should be made aware of is special assessments.
The term “special assessment” only applies to owners of Toronto condos. So if you live in a freehold dwelling, you do not need to be concerned. If, however, you live in or are considering the purchase of a condominium, you need to understand the meaning of this term, its implications and more importantly, how you can take steps to avoid it.
A special assessment is a charge that may be levied against your condominium unit by the board of directors of the condo corporation. To put it simply, a special assessment against your unit will require you to pay a sum of money to the condominium corporation.
The purpose of levying a special assessment is to help the condominium corporation pay for necessary repairs to the condominium itself. For instance, your condo corporation may need to complete repairs to the underground garage, improve the heating and ventilation systems or complete a fire code retrofit. These are expensive projects the condominium corporation may not be able to fund out of its Reserve Fund.
A Reserve Fund is a pool of money the condominium corporation is required by law to have in order to fund repairs. Sometimes, however, the necessary repairs or replacements are so expensive that the Reserve Fund is inadequate. In cases like these, the condominium may levy a special assessment.
A special assessment will not be levied without the board of directors first considering other less dramatic options. Sometimes, increasing the monthly common expenses can pay for the anticipated cost of the repairs. In any event, the board of directors will almost always call a meeting of all unit owners to outline the problem and decide on a prudent course of action.
———————————————————————————
Contact the Jeffrey Team for more information
