When people think of the financial position of a condominium, they think in terms of the amount of money in the reserve fund. The myth that has grown up around this is that a condominium with a large amount of money is in better shape than a condominium with a much smaller sum of money in it.
A Status Certificate is a document containing information regarding the operational, legal, and financial dimensions of the condominium corporation. The corporation is required to give each person so requesting, a status certificate with respect to a unit in the corporation.
A request for a Status Certificate is given to the property manager. The property manager on behalf of the condominium corporation is allowed ten days to deliver the Status Certificate to the requester. The cost is generally around $100.
The enjoyment of owners is most directly affected by the By-laws and House Rules of the condominium that they live in. The by-laws explain to owners how a building is run on a general level.
The following are the types of matters by-laws deal with.
- The Board of Directors – how many, how they are nominated, elected or removed and how long they can serve for.
- How the condominium corporation can borrow money.
- The assessment and collection of contributions to common expenses.
- What constitutes a standard unit? This covers what the condominium is or is not responsible for in a unit when it comes to damage, repair or replacement. Owners need to know this in order to properly insure their unit.
- How the units and common elements are to be maintained, used and managed.
- Members' meetings and annual general meetings. The appointment, remuneration, functions, and duties of agents, officers and employees of the condominium.
By-laws must be reasonable and consistent with the Condominium Act and the condominiums own declaration.
By-laws can be added to, amended or removed. Changing a by-law requires a majority vote of the owners (i.e. 50% of Unit Owners plus one). That vote must take place at a meeting of the owners that must be specifically called for. All owners should be given at least 15 days written notice of that meeting.
The 1998 Condominium Act requires that a minimum of 3 directors be appointed. Generally boards will have between 3 and 7 directors depending on the size and type of Condominium Corporation. More often than not, within a board, there will be a President, Vice-President, Treasurer and Secretary.
In most condominiums, directors of boards restrict their activity to making decisions and advising the Unit Owners with respect to maintaining or improving the affairs of the condominium. They deal with the financial, legal and physical aspects of running the building as well as with the concerns of the Unit Owners.
It is not usually the job of the board to actually carry out the day-to-day running of the building – that job is normally delegated to the property manager. However, the board is responsible for ensuring that the building is being run properly by the property manager
A Board of Directors is well advised to seek expert advice and opinions from professionals such as lawyers, accountants, contractors, architects, and designers before making decisions or communicating advice to the Unit Owners.
Once a year (must be within 6 months of the end of each fiscal year of the corporation), the corporation will hold an annual general meeting for all the Unit Owners.
The involvement of as many Unit Owners as possible at an annual general meeting or generally in the affairs of the corporation (whether on the board or on committees) is important for the welfare of a condominium. More input can
If a unit holder does not want to or cannot attend an A.G.M. or other special meeting, they can appoint, in writing, another person to represent them as a proxy and vote at the meeting in accordance with their wishes.
Unit Owners can call their own special meeting provided they can obtain 15% of Unit Owners willing to sign the request for the meeting.
The property manager has a variety of responsibilities including the following:
- Enforce By-laws and House Rules.
- Ensure the building is properly maintained.
- Deal with contractors and oversee the work being done by them on the building.
- Hire and supervise employees of the condominium such as cleaning staff, concierge and doormen.
- Advise the board with respect to the by-laws, house rules, renovations, security and problems arising from the unit holders or such things as damage to common elements.
- Communicate and deal with unit holders. For example they must advise unit holders of fire alarm drills and window cleaning as well as deal with unit holders' complaints. Depending on the nature of a complaint, a property manager may want to bring the complaint forward to a Board Meeting for resolution.
- Prepare monthly and annual financial budgets and statements.
- Manage the receipt of monthly maintenance fees and the payment of expenses.
The Condominium Act puts the following obligations on the owner and the condominium corporation:
- Owners must, within 30 days of leasing or renewing a lease, notify the corporation of this fact and provide the lessee's and owner's names. Within this same time period they must also provide a copy of the lease and furnish the lessee with a copy of the Declaration, by-laws, and rules of the corporation.
- Owners must notify the corporation of lease terminations.
- The Corporation is required to maintain a record of all notices required regarding leased units.
A check should be made of the Condominium Declaration, by-laws or house rules as very often they may contain restrictions on leasing/renting. The following are some typical restrictions:
- The owner is still responsible for the monthly maintenance fees and for any damage caused by the tenant.
- The suite cannot be used for hotel purposes or leased for less than one year.
- The details of the lease and information about the tenant must be provided to the property manager prior to the commencement of the lease.
- The property manager must inspect the unit prior to the lease to ensure it is in a good state of repair.
- A tenant cannot sublet a unit.
- An owner must notify the property manager within 7 days that the unit is no longer being rented or occupied.