Fine & Deo, recognizes new condominiums face special and important issues that often require legal advice from experienced condominium counsel. Such issues include building deficiencies, technical audits, first year budget deficiencies and most importantly, assistance and education for the new board of directors.
The Condominium Act requires a developer (referred to as the Declarant) of the condominium, to turn over the building to a board of directors elected by all of the owners. The Declarant is required to do this shortly after the day on which more than 50% of the units have been transferred by the Declarant. At the turnover meeting, the Declarant is required to provide a number of things to the condominium corporation, which are listed in the Condominium Act, such as “as-built” drawings, the corporate minute book, and other important records, and documents belonging to the condominium corporation. There are many details that the new owners should know at this meeting, but unfortunately are unaware of.
At the same meeting, all the unit owners present elect a board of directors, which in most buildings consists of five (5) directors. These new directors are responsible for the management of the entire condominium corporation, and the following are some of the important issues that they will be concerned about in the first year of operating their new building:
1. Dealing with construction deficiencies, and the performance audit and reserve fund study.
2. Understanding the role of the management company that was appointed by the declarant and getting the most out of the relationship.
3. Review of the operating budget and dealing with any shortfall that the declarant may or may not be responsible for. Understanding what is covered and what is not. How to follow the procedures to claim the budget shortfall and negotiating and settling the claim with the declarant.
4. Dealing with or terminating existing contracts and the development of an initial one year or five year plan to set goals the board wishes to accomplish, either fiscally, or with respect to projects at the building
5. Understanding the main documents and the important aspects of the Condominium Act.
6. Procedures for directors and owners’ meetings. How to handle difficult relationships between directors, and between directors and owners.
Fine & Deo, has developed a series of complimentary seminars aimed to inform property managers, current and prospective directors of the key issues affecting the governance of new condominiums. For more information, view our Governance Gems for Condos.