Our new condo budget has such an item as "HVAC equipment lease" in the amount of about $130,000 a year. HVAC means "climate control" system in the building, including air-conditioning, heating, ventilation and cooling. How come the building has to LEASE this system? Isn't it part of the entire building? The 2006-2007 year budget did not even have this expenditure item (it shows "0"). How could the buidling possibly function throughout the year without leasing it, then? Can anyone provide any explanation? And I forgot to mention that thie expenditure item is shown on "Administrative Expenses" section of the budget. Is it really "administrative" in nature?

Sounds quite interesting...

HVAC,I would presume you mean the Chiller, AMU, and boilers. What could have happened was the developer, instead of having the equipment part of the purchase price to the owners may have leased the equipment, which then makes the condominium corporation fully responsible for maintaining the lease. Within the first year after the turnover meeting the Board of Directors had the opportunity to terminate the lease and either enter into a new lease or purchase the equipment. That does not sound like it happened therefore the condo is now obligated to meet the terms and conditions of the contract unless it can be proved as oppressive, fraud, or negligence on the part of the declarant board. The condo is still obligated to pay for the lease and condo can sue the developer and declarant board, and maybe the management company.

Please see case law at link below... in this case the developer entered into a loan to pay for the same type of equipment.

http://www.canlii.org/en/on/onsc/doc/2006/2006canlii3661/2006canlii3661.html