Sally Thompson M.Sc., P.Eng. Synergy Partners
The Last Word
We Can’t Quit Yet
ILLUSTRATION BY JASON SCHNEIDER
We Must Stop Tricking People into Buying at One Fee Level and Then Having to Live With a Much Higher One
We have been through so much change in the last year – PIC and NOICs and preliminary notices – the list goes on. Unfortunately, some of the key changes to the Condominium Act have not yet had their regulations written and have not been proclaimed. One that personally breaks my heart is the first-year contribution to the reserve fund. Every new condominium starts with a first-year contribution to reserve that is woefully inadequate. Every new board not only has to deal with all the trials and tribulations of a performance audit and getting a new condominium corporation on its feet, but also must implement an almost insurmountable increase – typically 200% to 300% - in the amount being contributed to the reserve fund. I have sat in too many board meetings trying to help boards understand how it can possibly be true that their reserve fund contribution – set in accordance with the Condominium Act – can be so wrong. In my opinion, this is doing massive damage to the industry. When boards face 64
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these very significant fee increases, they do everything they can to reduce the impact. They want to shorten the analysis period to the bare minimum – even though they know that this will result in huge increases at every update because they are leaving some of the most expensive projects out of the analysis. They try to cut costs out of their operating budget. When they do implement the increase, the news is received negatively by the unit owners – causing unit owners to feel suspicious of the motives of the board. These are the very behaviours that we know can send a condominium down the wrong path. Negativity early in the life of a condo can rip a community apart and destroy trust for years. It seems to me that all the legislative amendments to date, including communication tools, governance changes and the new tribunal, were made to force “opposing” parties to deal with each other appropriately. We all know that most battles at condominiums, whether
they are about requisition meetings, or access to records, or suspicion related to an individual’s motives, almost always relate, at their core, to money. But instead of preventing the fights by ensuring that reserve funds are properly funded from the get-go, we have first built a fighting ring to host the fights and a book of rules for how the fighting is to be conducted. To my mind, getting the first-year contribution to an appropriate level, so we stop tricking people into buying at one fee level and then having to live with a much higher fee level, is the absolute key to helping future condominiums have a much easier road to success than what they have faced to date. I will continue to push the Ministry, under the new Doug Ford administration, for this key amendment and I hope that they will also hear from many other voices so they understand how critical it is to continue moving forward on the Condominium Act amendments. C V
