Enjoyment of a condominium lifestyle depends on respecting the rights of those who live in close proximity and knowing and following the bylaws and rules. In addition, owners should:
The Board of Directors are owners elected by owners of the Condominium Corporation at an Annual General Meeting. They exercise all of the powers, and carry out all of the duties of the Corporation including:
Condominium fees are paid monthly and are based on the Corporation’s annual budget for shared common expenses. Each owner pays a portion of the budget based on their unit factor. These expenses vary widely depending on the building and amenities available like pools, concierge services and exterior features, etc. They can include:
If the fees budgeted are not sufficient to meet the common expenses, the corporation may assess and collect a special contribution to cover the additional anticipated expenses in addition to the monthly condo fees.
The annual budget is initially developed by management in consultation with the Board of Directors. The Board reviews the budget in detail, makes adjustments and approves it. Resident safety and property values must be protected and budgets must consider these responsibilities first before popularity. Directors are owners too and must pay the same fees therefore share overall concern.
This is an act of legislation that regulates most aspects of condo formation, purchasing, living in, and governance. Each condo document has to be based on this Act which, in Ontario, is in theory the responsibility of the Ministry of Consumer and Commercial Relations. Each province has its own act because housing is a provincial jurisdiction. In Ontario, we have The Condominium Act 1998 that came into effect in May 2001.
A declaration is like the constitution of a condo. It is a thick document that is based on the Act and that each owner receives upon buying a unit in a condo. For resale condos, it comes with the status certificate. Declarations are written by a builder or a developer’s legal firm. Therefore, it is this building company that decides what will be an exclusive-use common element versus what is owned by the unit. When a unit is resold, declarations are contained in the status certificate given to prospective or new owners. The declaration cannot be changed unless 80% to 90% of unit owners consent in writing, depending on the issue. A written consent is obtained by the board after a meeting of owners during which the amendment is discussed. Lawyers are consulted by boards before any amendment is considered.
Rules are initially enacted by the builder or developer and later on by the board of the condo. Rules have to be reasonable and in accordance with the Act as well as the Human Rights Code of each province. Generally, a set of rules is drawn by a builder’s law firm and given to each new owner along with the declaration. In Ontario, rules have a common core but vary by type of condo, the facilities that exist, and may even differ between similar condos. It would be more functional if rules were universal from condo to condo.
Rules basically exist, as stated in section 58(1) of the Act, to promote the safety, security or welfare of owners and their property as well as the corporation’s assets. Rules also exist for the purpose of preventing unreasonable interference with residents’ use and enjoyment of their units and common elements.
Rules and regulations are helpful as they guide the behaviour of residents. People then know what to expect.
Rules generally cover issues of responsibility for the maintenance of common elements, behaviors in common elements, noise, garbage disposal, bicycles, pets, parking, exclusive-use common elements such as terraces, balconies, and patios, moving, fire safety, and health, recreational facilities, guest suites, grounds, roof gardens and shared facilities.
By-laws are legally binding documents approved by a condo’s board of directors and voted by owners at an owners’ meeting. By-laws’ purpose is to complement what is missing or is not specific enough in the declaration.
Common elements are those parts of a condo complex that belong to all owners. With a few exceptions, they constitute everything except the units in which people live. Corridors, garbage rooms, lobbies, locker areas, garages, technical rooms, the roof, grounds, walkways are all common elements.
Other common elements include heating and air conditioning systems, hot water system, pipes, electrical systems, all light fixtures in common elements, and the security system.
Exclusive-use common elements are those parts of a building to which only the owners of a unit or owners whose units are adjacent to them have access. The most obvious are balconies, terraces, patios, and front and backyards. Also falling into this category are parking spaces and marina slips.
The number of directors generally ranges from three in smaller condos to whatever a condo’s declaration specifies. A common and functional number is five and a quorum would consist of three directors present at a board meeting.
When a vacancy occurs on a board because a director resigns, the remaining directors may appoint a temporary director to serve on the board until the next annual general meeting or AGM. At that point, the director has to become a candidate to the elections if he or she is interested in remaining on the board. Directors are always eventually elected by a condo’s owners at the annual general meeting (AGM) or at a requisitioned meeting.
Maintenance fees are always due on the 1st business day of the month.
Owners should consult their condo’s declaration to know who is responsible for the maintenance, repairs, and replacement of their exclusive-use common elements. Some situations are unclear and may require legal interpretation.
Generally, owners are responsible for the maintenance of all the common elements that are their exclusive use. Rarely are they responsible for their repair or replacement. But there are exceptions and these exceptions will be specified in the declaration. Townhouses, in particular, show a great deal of variation in what is fully owned or is a common element, at times with costly results.
The Condo Act of Ontario mandates that each condo corporation “obtain and maintain” insurance in the event of “damage to the units and common elements that is caused by major perils” or other perils specified in the declaration and by-laws. Obviously, a condo that includes a marina, extensive grounds, or a roof-top party room will contain a somewhat more extensive coverage than other condos.
The perils that most commonly occur in condos are water escape in terms of leaks, overflows, and pipes bursting, vandalism, and fire/smoke. Damage from drain and sewer backups should also be included.
Finally, the insurance carries liability for directors in the event that they are sued by owners, tenants, guests, employees, or even contractors and insurance companies as a result of their duties on the board. The insurance will cover them, however, only to the extent that they had done due diligence and acted in good faith while carrying their duties.
All owners should have and maintain a comprehensive condo insurance policy to cover damage to their personal possessions as well as to their upgrades and to cover any damage that they might incur to a suite below or adjacent to theirs as a result of an accident, negligence or, as stated in a condo’s declaration or insurance by-law.
When taking an insurance policy, owners should familiarize themselves with the insurance by-law and standard unit by-law of their condo to make sure that their insurance covers what the condo policy does not cover.
Tenants should carry insurance for personal possessions and liabilities to complement that of owners.
However, if tenants are not certain whether their landlord has comprehensive insurance, then they would do well to take a complete condo insurance package covering upgrades and liabilities.
For their part, owners who are landlords should make sure that their tenants have insurance for their personal possessions.
Who is a tenant’s landlord: The owner or the condo? The owner of the unit is. The lease agreement is between the owner and the tenant. The relationship between landlords and tenants is still governed by the Residential Tenancy Act, 2006, in Ontario and a similar act in other provinces and territories.
However, within the building itself, the Condo Act has precedence and landlords are responsible to make sure that their tenants follow condo rules