Can condo fees be charged based on a system not using unit factors?
Townhouse owner paying for amenities that he doesn't use
Q I live in a condominium complex that is made up of townhouses and an apartment-style building which has 14 storeys. I live in a townhouse unit. Each month I pay my condo fees. My condo fees have increased significantly over the past couple of years because we are spending a lot of money on the upkeep of the building.
This is not fair. I do not use the elevators, the underground parkade or other amenities in the building. Why should I pay for things I do not use through my condo fees?
I am told that our condo fees are based on unit factors — what does this mean?
My second question is, can a condominium corporation charge condo fees for common expenses on a basis other than by unit factor so that the townhouse owners pay less in condo fees because our expenses are lower? Please help!
A Every year, the board of your condominium complex prepares a budget for the condominium corporation. The board tries to determine all of the expenses the condominium corporation will incur over the course of the year and how much money the condominium corporation requires to pay those expenses and possibly put some money aside into the reserve fund.
The amount of money that is required by the condominium corporation is then divided by 10,000 unit factors to give you a dollar amount per unit factor. Every condominium corporation in Alberta has 10,000 unit factors. Generally, your condo fees are based on the number of unit factors you own.
Take a look at your title and that will tell you the amount of unit factors you own. As well, generally, unit factors are based on the square footage of your unit. The bigger the unit, the more unit factors you have, which means that you would pay a higher monthly condo fee than someone in a smaller unit.
This method is usually described as basing your condo fees on unit factors in proportion to the unit factors of the owners' respective units.
In response to your second question, the short answer is yes. Section 39 of the Condominium Property Act allows condominium corporations to use other methods of apportioning common expenses among units, provided that the condominium corporation's bylaws allow for assessments by a method other than unit factor. The alternate method of condo fee assessment must still be objectively fair and reasonable.
You need to check your bylaws to determine if your condominium
corporation has the authority to calculate condo fees in a different manner. Helpful hint: Current condominium law in Alberta, in conjunction with the a condominium corporation's bylaws, permit a condominium corporation to use a basis other than unit factor as a means for allocating expenses for common expenses among the units.
When exploring other options to collect condo fees, a board of a condominium corporation should be careful to exercise due diligence and formality in determining what basis is selected, and provide sufficient notice to owners, as this will ensure a maximum opportunity for discussion and participation.
This practice will likely also reduce the level of dissatisfaction among any owners who may feel at times their fees are too high, given the various differences among units, and will no doubt substantially reduce the risk of any court actions being brought.
Roberto Noce, K.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at albertacondolaw@millerthomson.com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances.
Twitter: @Robertnoce