Canadian Condo Fee Increase Without a Vote

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Z.G. from Ontario writes:

Dear Mister Condo,

Unit owners need to know if Maintenance fee for upcoming 2015 could be increased over 11% without a vote.

Mister Condo replies:

Z.G., greetings to you, my Canadian friend! I am not an attorney nor am I an expert on Canadian Condominium law so please accept my advice as friendly and not legal. For a legal opinion, please consult with a qualified attorney who specializes in community association or strata law in your region. Here is my friendly advice.

The Board of directors is entirely in charge of the association’s budget, which makes sense since they are the ones dealing with the reality of paying the association’s debts. The unit owners do not get to vote on the actual budget. However, they do get to vote on who is serving on the Board. If the Board is behaving in an irresponsible matter with regard to the association’s finances, they would very likely find themselves being voted out of office.

The reality of the situation is most likely that the association’s expenses have risen and that the fees are justifiable. There is a tendency amongst many Boards to keep the fees low so as to keep unit owners happy but that is often a fallacy. Expenses for the association almost always rise and there is an ongoing need to properly fund the Reserve Fund, which is usually the first item left unfunded in the quest to keep fees low. This is very dangerous for the community in the long run as there will not be enough money for replacements of common elements that will have to be replaced over time. 11% may seem like a large amount for one year. However, unless the fees have consistently risen over the years, it is possible that the community is just catching up. A better policy would be to accurately adjust fees each year for the reality of inflation. I hope that helps! All the best!

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