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CONDOCENTRIC: Payment Error Should Be Corrected
Question:
Our board ordered 15 security cameras to monitor our 200-unit townhouse, at a cost of about $30,000. Even though our annual budget is close to $1 million, and we have a reserve fund of $500,000, the board found it necessary to make a special assessment of $150 for each unit to pay for the cameras. Instead of dividing the total cost according to the percentages in the declaration, the management company simply divided the cost by 200 and made it equal for everyone. When this error was pointed out to them, the management company admitted its mistake, but said that since the difference was minimal, it would stick with the original assessment amount. The difference in some cases is almost $20. What can the board do if an owner pays only the amount it should have been assessed, rather than the amount the management company asked for?
ANSWER:
As a preliminary matter, unless the board of directors was replacing an existing camera security system, the installation of 15 security cameras would constitute an alteration to the common elements rather than maintenance and repair, and would not constitute a reserve expenditure. The extraordinary assessment may be justified if the cameras had not been budgeted for in the condominium corporation’s current operating budget.
With very rare exception, extraordinary assessments are divided among the units in the proportions outlined within a condominium corporation’s declaration for common expenses and are collectible as such. An earlier error made by property management or the board of directors cannot sanction the continued breach of the Condominium Act. The board of directors and property management should act promptly to correct the error, as it could become more difficult to remedy this situation with the passage of time. Generally, the condominium corporation would have no recourse against an owner who does not want to pay the additional $20. However, as a precaution, an owner should request to see the financial statements for his/her unit to ensure that the $20 is not being carried forward as a receivable of the condominium corporation.
From “The Toronto Star” on September 21, 2002 - Condo Living Section P15
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