condo budget approval

Condo fees and residents’ rights

Knowing the rules can prevent a conflict
Tuesday, August 27, 2019
By Murray Johnson

Why is it that a select few people can decide what condo fees for the ensuing year will be? Why can’t owners have input into the new condo fees? These are both extremely good questions and perhaps a couple of the most commonly asked questions in the condo world. Whether you’re in one of our province’s bigger cities or a small rural community, these two questions apply.

There was a case many years ago when a new owner was faced with a substantial increase after having just moved into his first home. Upon review, he found that the board of directors had been presenting a budget to owners for approval for the last ten years. Given the choice, it came as no surprise that those owners voted against any increases.

This new owner was savvy enough to learn about condominium regulations. They discovered that setting an annual budget was one of the obligations of the board of directors that could not be downloaded to owners. In other words, by voting in directors, owners are granting them certain rights and obligations as outlined in the condominium act that include setting the annual budget.

The new owner took the condominium to court saying that he should have been notified in his status certificate that this practice was in place and sought remedy under the oppression clause of the act. He was successful; and to this day, the case is often cited to illustrate that the volunteer board is privy to information that forms the basis for the annual budget (and fees) and they are best situated to establish the annual budget.

Sometimes we forget that the volunteer board of directors are bound by the budget that sets the annual fee the same as any other owner. Owners should embrace expenses that allow directors to become better educated such as the annual fee to attend The Condo Conference held each year in Toronto. The event provides an invaluable source of education for both Condominium Directors and Condominium Managers alike.

Murray Johnson is an organizing committee member for the The Condo Conference. For more information regarding The Condo Conference, visit condoconference.ca.

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