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Linda Palfi
CNC Properties
47033 Creekside, Calgary, Alberta
P: 403-998-7732
F: 403-592-8002
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Good condo maintenance--virtually guaranteed!

 

Maintenance-free living is the goal of many people who buy a condominium apartment, townhouse or even a villa or "bare-land" condominium single-family home. But few of us know that there is a virtual guarantee that the commonly-owned property will, in fact, be well maintained.

 

The guarantee lies in Alberta's Condominium Property Act, which places a "duty" on the condo corporation--through its Board of Directors--to maintain and repair the land, buildings and mechanical systems that surround and serve your condominium home.

 

Let's see what the law actually says: "... the duties of a (condo) corporation include... to keep in a state of good and serviceable repair and properly maintain the... property of the corporation and the common property." The law does NOT say that the condo corporation "may", or "if it wants to", or "if it can afford to" maintain the property. The law places a duty on the Board to ensure things are working and are properly maintained.

 

On the flip side of that coin is every individual owner's responsibility to maintain their own living unit. The Condominium Property Act says, "An owner... shall maintain his unit in a state of good repair." In other words, everyone in condo ownership, individually and as a group, must do their part to keep up function and good appearance, even though that can cost money.

 

Of course, some condo boards don't want to raise condo contributions required of themselves and their neighbors, and Boards can be particularly shy about imposing a lump-sum special assessment to raise the funds needed to deal with an emergency. Yet any owner within the corporation can remind the Board of its "duty" in law. Court action could even be taken to require the Board to make needed repairs. Owners could also call a special meeting of the condo corporation's membership and replace the Board with owners who are willing to ensure that good maintenance is performed.

 

To pay for proper upkeep of common property, every condominium corporation should have an annual budget to ensure that monthly condominium contributions from owners will cover expenses, and a reserve fund to lay away money for larger capital items that need replacement every decade or two. As well, a projection should be prepared of the life expectancy of major components and their cost to replace, which is often called a "reserve fund study".

 

Although some condominium corporations do not have a reserve-fund study in place, the owners all know darn well that they should have money in the bank in a rainy-day account. While there is no set figure for such a fund, a rule of thumb would be $2,000 or $3,000 for every home in the development, and contributions to the fund of up to 25% of the corporation's total annual budget.

 

But the reserve fund is not an ever-expanding bank account. While 25% of the budget might be contributed each year, that much or more may be spent to replace a hot-water boiler, a building's roof, or to make major repairs, for example, to post-tensioned cable systems in a concrete parkade.

 

When buying into a condominium project--new or pre-owned--the point is not only how much money is in the bank, but whether there is a detailed budget, a projection of future capital costs, and a savings plan and funded account in place to pay for need expenses. If those questions can all be answered with a "yes", then a visual inspection of the common property will further demonstrate that the guarantee of good maintenance is performing well in this condominium development.

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