Tag Archives: condominium corporation
Advice for New Condo Board Members
by Denise Lash
You never imagined that you would one day be in office, representing the interests of a community of residents. It’s the day after elections and you have been selected as a new board member of a condominium corporation. So how do you get started?
Be Patient. First off, stick with it – it takes at least a few months to learn about being a board member and understand the inner workings of the board and management. Give it time.
Read the Paperwork. Up until this moment you may have put the condo documentation aside, but now is the time to read it. Consider taking the Canadian Condominium Institute’s directors courses. Visit www.ccitoronto.org/Education/default.asp for more information on them.
Make Decisions Carefully. Don’t respond to a situation too quickly—you must be fully informed before taking action. And make sure that before voting on a matter presented at a board meeting, you also have all the facts you need to make a proper decision.
Communicate Often. Do your part to communicate regularly with residents. It may involve writing for the newsletter or speaking at social events or owners meetings.
Get Advice. Contact professionals when necessary. As a board member, you will only be protected from personal liability if you rely on professional opinions. That includes lawyers, engineers, accountants, and other trained experts.
Enforce Wisely. Be cautious when choosing your battles. Enforcement issues will always exist, and as a board member you need to pursue these issues with care. There may be times when you have to consider all options and determine whether the potential risks of imposing a rule or penalty are worth it.
Put Personal Benefits Aside. Act reasonably and respect the needs of others. In most instances you should focus on what is best for the majority and not what is in your best interests. Personal benefits and biases must be overlooked when acting as a board member.
Listen Well. Pay attention to your residents. Listen to their opinions and feedback and let the board give them a forum to express their views.
Accept Criticism. Learn how to take criticism in stride—it comes with the territory. Try to understand what the real message is.
Show Your Appreciation. Be grateful for your volunteers. Acknowledge and nurture those residents who donate their time and energy on committees.
Exhibit Leadership. Lastly, if you expect residents to comply with the rules, then you must also comply. Set the example and others will follow your lead.
Denise Lash is a condominium lawyer with Miller Thomson LLP and host of the television program MondoCondo. Visit www.torontocondoshow.com.
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Contact the Jeffrey Team for more information
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What you need to know about condo fees
Monthly maintenance fees are an unavoidable part of any condo, but what rate is acceptable? Prospective buyers should know.
David Fleming – The Grid
Maintenance fees are one of the most misunderstood aspects of buying a condo. Let me clear things up.
Condo fees are paid each month by the unit-owner to the condominium corporation to cover the building’s expenses (everything from watering the plants to cleaning the hallways), as well as to contribute to the reserve fund, which covers large repairs (like roof replacements). It’s up to the condominium corporation to set these fees and to decide how much they will increase annually.
There are two constants buyers should keep in mind: Newer buildings have lower maintenance fees than older buildings, and every building’s fees will go up over time.
If you’re looking at a condo with seemingly high maintenance fees (i.e., over $0.70 per square foot), it’s likely that it’s at least a decade old. If the fees are $0.80 per square foot or more, it’s likely that there was a massive repair (such as spending $450,000 to fix the roof) that drained the reserve fund and necessitated an increase in monthly contributions.
Some buildings stick out when you compare their fees to those in the surrounding area. For example, 800 King St. W. is a building with monthly fees hovering around $0.80 per square foot, but units in the building are readily available at a substantial purchase discount (as is often the case when the fees are so high). You might find a two-storey loft unit there for $339,000, whereas a similarly sized unit down the street at 954 or 1029 King may cost $389,000.
Last week, I received a notice from the property manager of the building I’m moving out of explaining that maintenance fees will go up next fiscal year. Instead of $384 a month, it would be $404. It’s important to put this in perspective by calculating the price per square foot. In this case, the fees would rise to $0.69 per square foot.
I’ve always maintained that anything over $0.70 per square foot is expensive, and now as I prepare to leave this building next month, I can’t help but admire my impeccable timing. My new condo is larger and so it has higher monthly fees ($514), but the cost per square foot is only $0.49. The condo I’m moving into is two years old whereas the one I’m leaving is six years old.
It’s normal for fees to increase over time, but the extent of that increase is what buyers should pay attention to.
In today’s pre-construction condo market, developers will set maintenance fees artificially low, sometimes as low as $0.40 per square foot. While the developer is responsible for any budget shortfall in the first year of the condominium corporation’s operations, it’s in years two, three and four that the condo board and its residents start to realize how ridiculous $0.40 per square foot was.
There are horror stories throughout the industry. At 22 Wellesley St., a chic, new tower, the fees increased 37% in the first year, and they almost doubled within the first four years.
Sometimes, it’s the developer who leaves the cupboard bare, and sometimes it’s the property manager and/or condo board that mismanage the corporation’s finances. Experienced realtors will often muse, “You can’t run a building on less than 50 cents.” So if your fees at a new condo have been set astonishingly low, be prepared for an increase in the first few years.
But there’s always an exception to the rule. I give you 25 The Esplanade. If you walked down its hallways, you’d swear it was brand new, but it’s actually an exceptionally well-run and well-maintained 23-year-old building with $0.46 per square foot maintenance fees. What’s its secret source of income? All the parking in the building is rental.
While you shouldn’t buy a condo because of its low maintenance fees, it is something you should consider. And if you ever notice that fees are increasing at triple the rate of the buildings on either side of you, then perhaps it’s time to seek greener pastures.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Condominium Act needs overhaul, critics say
By Tony Wong
To be a director of a condominium board in Ontario, you have to be 18-years of age, mentally competent and not be an undischarged bankrupt.
But as condominiums become an increasingly important lifestyle choice in the province, two of the largest condominium associations want to raise the bar on the quality of directors by making sure that education becomes a requirement under the now decade old Ontario Condominium Act.
“Given the large responsibility borne by directors often dealing with assets worth many millions of dollars, and that most often they are volunteers without a specific skill set for governance of a condominium corporation…all new directors regardless of their educational and professional background attend an introductory directors’ condominium course to ensure basic knowledge,” says a proposal to be released on June 1 and obtained by The Star.
The educational bylaw requirement is just one of many long-awaited recommendations in a 102-page report by the joint committee of the Canadian Condominium Institute and the Association of Condominium Managers of Ontario.
“There are a lot more people living in condos today than when the act was implemented, and we’ve seen where things could certainly be improved,” said Armand Conant, a lawyer and past president of the Canadian Condominium Institute.
Other changes the groups want include:
• Reserve fund requirements in condos to be increased so that buildings don’t fall into disrepair. Currently the minimum contribution in the first year budget is 10 per cent. The group recommends 20 per cent.
• New property tax classifications for condominiums. The government assess units for taxes as if they were receiving individual services which is “not fair or equitable” says the group. “For example there would be only one garbage pick up for a condo of 200 homes, yet if these 200 homes were houses on a street they would have to make 200 stops.”
• The Ontario New Home Warranty Plan should apply to condominium conversions so the new owners will have protection.
• More disclosure by developers on key financial matters. Some developers may mislead consumers by artificially depressing first year expenses which results in large increases in common expenses in the second year.
Conant says his group has met with as many stakeholders as possible, from owners, to developers and trades people to draft the recommendations.
“We started with the basis that this is essentially a consumer protection act, and we wanted to have as wide an input as possible,” said Conant.
With an election coming up in October, the groups hopes this will raise the profile of condominium ownership with politicians and that the provincial government will eventually move to re-open the Act. Copies will be delivered to Minister of Consumer Services John Gerretsen’s office, as well as all the opposition parties.
The Act received Royal Assent in 1998, but didn’t come into force until May 5, 2001, or ten years ago.
There are now 9,000 condominium corporations in the province, and record breaking sales of condos in cities such as Toronto as condominiums are outselling single detached homes.
“The current Act is a huge improvement over the old one, but since then times have certainly changed,” said Conant.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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