What is a Condominium?
We frequently discuss condominium living and what it entails, but we realized on this chilly Thursday that we haven’t delved into what a condominium actually is. We figure today is as good as any to break down what a condo is and who the players are in the game. So settle in, grab a drink of choice and we shall get started.
A condominium is a space in this big ol’ province that you share with other people. This might be in the form of a side by side set of homes, townhouse, apartments or any version similar. Basically, something that shares a wall or yard space. You as an owner, purchase your unit and are then responsible for everything within the walls of the unit. However, who looks after the snow removal or siding or garage doors since that is technically not inside your walls? That would be the condominium corporation. The condominium corporation is responsible for the rest of the building, depending on how your bylaws are written (we will get to that later). The condominium corporation is made up of all the owners of each of the units in the building. For example, if there are 20 homes in your shared space, you have 20 owners who make up the condominium corporation.
Yearly, the condominium corporation has a meeting called their Annual General Meeting (AGM). During this meeting, there are a number of topics that are covered and one of those is the election of the Board. The condominium corporation spends a bit of time and votes in a Board of Directors who are then responsible for the operations of the building. They review contracts for snow removal, siding repair, garage door maintenance, repainting and on and on. Their role is to handle the business of the building on behalf of the other owners.
This means, as an owner, you will want to either volunteer to be on the Board or ensure you are voting for people that you know will do their best to keep your investment safe and profitable. Note that I stated you would “volunteer” to be on the Board. That’s right. It’s a thankless, payless role that someone has to do. You volunteer your time, knowledge and sometimes sanity, when sitting on a Board of Directors. Your Board of Directors will make a decision to handle the entire business themselves (self managed) or hire a management firm (managed). If they choose to hire a management firm, they’re going to do their best to find one that has similar values and outlooks on how to look after a property.
The management company is meant to act as a middleman between the Board and owners/contractors/legislation and is tasked with ensuring that they follow the direction given from the Board. In layman’s terms, this means that the management company does not make decisions. The people you elected, do. Management simply executes those decisions and ensures that the Board is making decisions that fall within the parameters of all applicable legislation.
With me so far? Great. Cuz we have just scratched the surface.
So now, we have you, the Board and the management company with each group playing a very different role. You as an owner are required to behave in a neighborly fashion and be cognizant of what’s going on. Your condominium corporation has a set of rules you must follow in order to live there. These rules are called bylaws and are registered with land titles as the be all, end all for your corporation. Your Board of Directors and management firm will make decisions based on these bylaws as well as a little ditty of legislation called the Condominium Property Act. Everyone must be within those rules to live peacefully within the shared confines that you own in. Period.
To live in your condominium, you are required to pay fees. These fees are decided based on a budget that is created after review of costs to operate your building. Costs to operate may be things like snow removal, boiler system maintenance, waste removal, insurance or anything else that happens on a consistent basis. For the things that don’t happen on a consistent basis, you have a bank account called a Reserve Fund. This is for items that will deteriorate eventually. Paint, decks, stucco, asphalt, doors etc. Part of the fees you pay every month, goes into this reserve account to keep a little savings for the condominium corporation. This money you pay each month are your condo fees. Some buildings have amenities, some have bonuses like internet included and others are bare bones and are doing their best to maintain a balance between condo fees and projects.
In case you’re not picking up what I’m putting down here, it is a community that everyone is pitching into. Everyone is just doing their best with the abilities they have and doing so in good faith. It really is “Mi casa es su casa.” My home is your home, when you live in a condominium.