Reserve Funds and Reserve Fund Studies

October, 8 2021 Published by Eastern Ontario Chapter - By Cindy Johnston

Special Assessments & Reserve Funds

From the Volume 29 issue of the CCI Eastern Ontario Condo Contact Magazine

Special Assessment is a dirty word in the condominium community. With careful planning, sound oversight, and a successful relationship between the Board of Directors, management, contractors, and professionals, the likelihood of a Special Assessment can be greatly reduced. Unfortunately, even the best laid plans cannot predict the future, and Special Assessments can sometimes be inevitable.

The tragic story of the Condominium collapse in Surfside Florida is a crucial reminder of the importance of having a functioning Condominium Corporation. While there remain many unknowns, it is clear there was a divisiveness and a lack of consistent leadership. This catastrophe also highlights the very serious and often overlooked role of Board Members. Board Members make executive decisions and must do so based on what is best for the Corporation. This volunteer role should not be taken lightly. Board members are leaders and must be prepared to make hard decisions for the good of the whole community. Especially when it comes to the safety of the owners.

Owners are responsible for their mortgage, their taxes, and their monthly condominium fees. Special Assessments are another payment, and nobody wants to spend more money if they do not have to. Unfortunately, owners have a duty to pay any Special Assessment that is levied. In Ontario, Condominium Corporations have mechanisms in place to collect the money owed to them. This includes legal procedures including placing a lien on a unit.

Three points I remind boards of when dealing with major Special Assessments are:

1. SETTING DEADLINES. Firm deadlines are imperative in ensuring that the work gets completed in a timely manner and key milestones are met at all points during the project.

2. UNDERSTAND THAT YOU ARE NOT GOING TO PLEASE EVERYONE. As any experienced condominium manager knows, once a Special Assessment notice goes out there is often pushback from owners. In most cases, the concern over the special assessment is due to a lack of understanding of the situation. Education and communication are key. I often suggest holding town hall meetings with professionals such as engineers, contractors, and legal counsel to help explain the process and the reason for the Special Assessment. Owners deserve as much communication as possible. Directors must recognize though that sometimes, certain owners will never be satisfied when it comes to spending more money.

3. TRUST. Directors need to trust in the team they have chosen and the process that lead them to this decision. This does not mean that second opinions cannot be sought to verify information, but proper oversight and due diligence are extremely important when making the decision to levy a Special Assessment or not.

Owners need to remember that Board members are owners as well. From my experience, Board members often try every avenue they can to avoid a Special Assessment. Often it comes down to what is best for the Corporation collectively and not individual unit owners. Special Assessments are not as simple as the Corporation asking for more money. As an owner, if you do not agree with a Special Assessment, ask for clarification, ask if other options were sought, requisition a meeting, collect all the facts. One thing that is clear is that Condominium Corporations must work together, and major conflict, does not help anyone. As a result, it is important to take the time to share information to show owners that the decision made was based on expert opinion and reasoned judgment. This will help minimize conflict and allow the condominium corporation to move forward with the necessary work.

Cindy Johnston established Sentinel Management in 1987 with the goal in management to individually service all contracts and be aware of the interworkings of each property.

Her work ethic ensures a high quality of service is provided to each and every client, which has translated into memberships with the Canadian Condominium Institute (CCI), Association of Condominium Managers (ACMO), and the Better Business Bureau (BBB). When not working, Cindy finds herself relaxing by the pool or camping, but most of all loves spending time with her family and dog, Buddy!


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