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#478
Jony ()
Special assessment - Blame on Owners ? 2007/07/30 20:54  
Who is accountable for the "Special assessment" ? BODs or property management company ?

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#479
doubleu ()
Re:Special assessment - Blame on Owners ? 2007/07/30 22:34  
It depends. It could be that the owners are responsible for it if they've resisted contributing sufficient funds to the reserve as required by the RFS...and particularly if they've also voted only for a board who'll tell them what they want to hear.
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#480
wotan ()
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Re:Special assessment - Blame on Owners ? 2007/07/30 22:44  
The PM does not set the Budget nor implements the Reserve Fund Study, the Board does. Therefore, it is the Board's responsibility to make sure that there is enough money on hand to cover the condo's expenditures. If not, they have three options:

1) Increase the maintenance fees.

2) Take out a loan.

3) Have a Special Assessment.

#1 is for long term increases in expenditures (for example, if hydro or water fees increase.)

#2, if it is for expenditure listed in the Budget, is an option that the Board can do easily. However, if the expenditure was not listed in the Budget, the Board will require a special by-law. It is best to check with the condominium's solicitor prior to taking out a loan just to make sure.

#3 should always be the last option, and can either be in one lump sum or spread over several months in addition to the maintenance fees (where the increase(s) are not required over the long term, so increasing the fees would result in the owners paying too much.)
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#481
Jony ()
Re:Special assessment - Blame on Owners ? 2007/07/31 00:53  
doubleu,
Yes,I can understand it if unit owners tell the board and property manager what to do,then unit owners are responsible for it. in my friend's condo, almost different BOD every single terms but the same management.
they went to Special assessment few times already.
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#482
Jony ()
Re:Special assessment - Blame on Owners ? 2007/07/31 00:56  
Thanks Wotan,Good solutions.
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#483
wotan ()
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Re:Special assessment - Blame on Owners ? 2007/07/31 02:28  
I am just trying to help. There is a fourth option - so called "self financing" - a good Board should set aside an amount in the Budget for each year that allocates funds for a "contigency fund" which allows the Board to put small amounts (in addtion to any surpluses that may occur from time to time) aside to cover any unexecpted expenditures or deficits. The contigency money can be invested until the funds are required. This means that special assessments and loans should not be required.
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#484
Yvon ()
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Re:Special assessment - Blame on Owners ? 2007/07/31 03:13  
Jony,

In most instances where a PMC is contracted, one of the terms of the management agreement will be that the PM (PMC) is to prepare an annual budget for approval of the Board prior to the AGM. Ultimately, the Board is responsible for the Budget but unfortunately, many BODs will simply "rubber-stamp" the PM's suggested budget. You could maintain that, because the PM (PMC) is required under the terms of the management agreement to prepare the annual budget, there exists a contractual obligation on the part of the PM (PMC) to factor in any projected shortfalls in the operating budget or in contributions to the Reserve Fund. In fairness to some PMs, there are Boards who, for obvious political reasons, will not accept that an increase of any kind, much less a "special assessment", is warranted.

In any event, sections 17, 27 and 37 of the Condominium Act, 1998 place the ultimate responsibility for the affairs and business of the Corporation squarely on the Board of Directors. In my opinion, the short answer to your question Jony is the Board of Directors.

Wotan has provided the options available to a Board which is faced with such shortfalls.
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#485
Jony ()
Re:Special assessment - Blame on Owners ? 2007/07/31 16:48  
In our building PM did everything by selecting president to sign all the cheques.we have changed everything step by step.of course up until now I thought budget preparing is PM's job.For sure next year we will do it.
This forum really helps me.

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#488
wotan ()
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Re:Special assessment - Blame on Owners ? 2007/07/31 17:33  
Jony, I hope you Board now requires two directors to sign all cheques - and that should be put in the By-laws.
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#492
Jony ()
Re:Special assessment - Blame on Owners ? 2007/07/31 19:00  
Wotan,
PMC dont care about those by-laws and etc.still they can do anything.
how ?just go open the new bank on behalf of the corperation and put all the money into PMC's bank..and then it is PMC rule..
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#493
David ()
Re:Special assessment - Blame on Owners ? 2007/07/31 19:08  
The board must read ALL of the contract before signing with a property management company.
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#494
Yvon ()
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Re:Special assessment - Blame on Owners ? 2007/07/31 20:11  
Hello David,

Agreed, many Boards do not take the necessary time to review the Management Agreement. They will intuitively pass it on to the Corporation's lawyer for approval. As I have said many times, individual Directors need to aquaint themselves with the Act, Regulations and the governing documents of the respective Corporations which they serve.

For instance, our Board did not even know the difference between the Condominium Act and our By-laws. How can any Director claim to serve the interests of the unit Owners or pass the "reasonable man test" found in section 37 of the Condominium Act, 1998, if he/she is not willing to invest the necessary time to become informed of his/her responsibilities to the Corporation.

I believe that this problem leads to BODs entering into Management Agreements without protecting the interests of the Corporation (unit Owners). Boards must always remain cognizant of the fact that PMCs endeaver to "maximize profits and minimize risks".

Boards should consider themselves "the government" of the community they serve and accordingly, should serve with the same degree of prudence and competence which each Director would expect to see exercised by their municipal, provincial and federal counterparts.
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#495
Jony ()
Re:Special assessment - Blame on Owners ? 2007/07/31 20:23  
in our management agreement,there is nothing about bank...they still did it.
What can you do about it ? Do we have a condo police ? is there anyone cares about us ? do we have a strong organization for unit owners ? We dont have a money to fight.
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#497
Yvon ()
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Re:Special assessment - Blame on Owners ? 2007/07/31 20:37  
Unit Owners now have CAFCOR. Please feel free to contact us with your complaints and problems Jony at:

complaints@cafcor.org
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#505
Anna ()
Re:Special assessment - Blame on Owners ? 2007/08/01 00:19  
In response to some of the threads on this topic, I must state the opposite,yes BOD are responsible but what about the PM's are they not the ones who have the accountant at the office and the regional managers to say hey something is not looking right - but how many of them are going to come fourth and advise the board. Not alot. Board of Directors are guided by the PM's- board members reviews financial's but how to the final dollar? That is why it is important that we learn to have the accounting financials done completely away from the PM's because they are not going to run to the board and advise them right away (at least not all) when problems arise. What about accumulated bills, who is responsible the Board, or Management, then you will have the other side say the board...well the board does not run the office, then you will have the other side say Board need to be much in tune...with what is going on...are they not Volunteered? So who is to blame?
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#506
Yvon ()
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Re:Special assessment - Blame on Owners ? 2007/08/01 01:09  
Hello Anna,

Agreed! And my point is that the Condominium Act states that it is the Board's responsibility to manage and control the affairs and business of the Corporation. Volunteers or not, if a unit Owner decides that he/she wants to be a Director, he/she should do so with the expectation that there will be "work", "learning", "responsibility" and "accountability" to go along with that position. PMCs will not look out for a Corporation where the BOD takes no responsibility in ensuring that unit Owners' interests are protected.

You are correct Anna, in stating that a PM prepares the budget for the Board, however, it is incumbent upon the Directors to know what is what. The best way to concentrate on protecting unit Owners' interests and investments is to eliminate the potential for confusion in responsibilities. By eliminating PMCs from the equation, Boards can hire independent PMs who will answer only to the Board and who's loyalty will not be divided between a PMC who pays him/her and the Corporation who he/she was hired to serve.

As it stands now, many condominium Corporations are run entirely by PMCs, just like an apartment building and unit Owners are treated like tenants. One of the reasons CAFCOR was founded, is to assist and encourage unit Owners to replace incompetent Boards and to help willing Boards to take back our Corporations through independent PMs and/or self-management.
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#510
wotan ()
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Re:Special assessment - Blame on Owners ? 2007/08/01 06:27  
This is why I personally advocate a Finance Committee and believe that the office of Treasurer may be required for all corporations. The Finance Committee should consist of the Treasurer (as Chairman), at least one other director, and at least two non Board members. The Finance Committee should:

1) Consult with the corporation's investment advisor on investments for the condo (to come up with an investment plan to be approved by the Board),

2) Assist with preparing the annual Budget,

3) Assist the Treasurer in preparing the monthly, quaterly, and annual Financial Statements,

4) Discuss with the Engineer (during an RFS), the draft funding plan which the engineer should give to the Board prior to the final copy of the RFS.

5) Implement any of the above,

6) Advise the Board and owners on any other Financial matters.
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#511
John ()
Re:Special assessment - Blame on Owners ? 2007/08/01 07:29  
Can you have committees for finances by the condo act? Doesn't every condo havde a treasurer wotan?
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#522
wotan ()
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Re:Special assessment - Blame on Owners ? 2007/08/01 17:46  
Per Section 36(1), a condominium is only required to have a President and a Secretary. Other Officers are only required if they are included in the By-laws or are created by a Board resolution:

36. (1) A corporation shall have a president and a secretary and all other officers that are provided for by by-law or by resolution of the directors.

What I am saying is that a condominium should not have the choice of whether to have a Treasurer or not. It should be required, just like the President and Secretary. Also, the Act allows for one person to hold two or more officer positions, and requires at least three directors to begin with. And with the exception of the President, an Officer need not be a director.

27. (2) Subject to subsection 42 (4), the board shall consist of at least three persons or such greater number as the by-laws may provide.

36. (2) Subject to the by-laws, the directors,

(a) shall elect the president from among themselves.

(b) shall appoint or elect the secretary; and

(c) may appoint or elect one or more vice-presidents or other officers.
36. (3) The same person may hold two or more offices of the corporation.
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#524
Jony ()
Re:Special assessment - Blame on Owners ? 2007/08/01 22:43  
Oh my God !!!
I have experiences with 2 PMC and none of them are close to what you guys are talking about.
We all (including owners and BODs) trained very badly by these 2 PMC according to you guys.
Now I have to find a way to train/educate the other board of directors and the owners properly in all matters.
Any idea ?
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