Nowadays, most people in Canada are well familiar with condominium ownership. The condominium is also commonly known as a condo. If you are well known for condominium or condo ownership, you may also know certain rules and regulations regarding this type of property ownership.

In this type of property ownership, the owners need to share their ownership. So, often time this is also considered as shared ownership. As long as the shared ownership is concerned, you also need to share all the additional charges of your property. And therefore, the condo assessment takes place. To understand the condo assessment, you also need to know about the condominium property act Alberta.

So, in this writing, we are going to explain what is a condo assessment in Canada. Keep reading.

Definition of Condominium

As we have known, condominium usually refers to shared ownership. All the additional costs of an individual property, such as maintenance fees, common expenses, should be shared among the owners.

When you own property in a condominium, you will usually have shared ownership of the common property. The common property will include the elevators, swimming pool, gym center, lobbies, and so forth. That is why owners who own the common property need to share the maintenance and other costs.

How Does a Condominium Work?

Usually, in Alberta, a condominium needs to be approved and registered by the government. Then it becomes a corporation. Every corporation needs to board of directors to regulate the corporation. Every owner of the condominium has the prerogative to run for a position on the board of directors.

Other than the board of directors, every owner also has some responsibilities to do. Even though all those tasks for the other owners are voluntary, the other responsibilities and tasks for other members may include preparing the necessary documents, maintaining the property, and so on. Real estate attorneys can help you in this kind of situation.

Condo Assessment in Canada

Generally, condo assessment is also commonly known as special assessments. This is a fee that the condominium corporation charges. It is usually monthly-based. In the corporation, there are a bunch of rules and regulations. Special assessment in of condominium is one of them.

In some cases, if something seems wrong to the owners of the condominium. Or if the board of directors fails to follow the proper procedures of assessment. Then they can challenge the special assessment in the court.

Why Does Condo Assessment Occur?

The special condominium assessment can occur for several reasons. Usually, it is occurred or is issus by the board of directors. However, there are some common reasons for special condominium assessments. They are describe in the following:

1.    Unexpected Expenses

One of the most common reasons for condo assessment is unforeseen costs or expenses. Sometimes, the corporation may need to go through some critical years. In those years, they usually get financial stability from the reserve fund.

But in some cases, the reserve fund is only uses for major projects. But if there are any unexpected or additional costs regarding a maintenance or other costs. Then the owners need to facilitate and cover those expenses. So, unforeseen expenses are the most common reason behind the condo assessment.

2.    Low Budget

In some cases, there should be a pre-planned budget for a certain project, but in most cases, that budget is way lower than the expectation. As a result, the project costs more money than the budget. In that case, to complete the projects, the owners need to cover those expenses.

3.    Funding for the Lawsuit

Another significant expense that falls under the special condominium assessment is losing a lawsuit. Any judgment against the corporation should bear by all the owners of the condominium. Usually, when the corporation losses any lawsuit, they need to spend some additional expenses. In some cases, there is no operating fund for that. That is why the members of the condominium need to bear it.

How Much Money Do You Have to Pay?

In any special condo assessment, if you are an owner of that corporation. You have to pay your minimum portion. Sometimes, if you have any trouble paying that money, you can talk to the condominium board of directors. If they consider, then you may only have to pay the basic element fees.

But in most cases, the board of directors will decide and tell you how much an owner should have to pay. Usually, the portion of the money is decided by calculating the element fees or other maintenance fees. However, there are some potential consequences of all the assessments of the condominium.

How to Avoid the Special Assessment?

Sometimes, the special assessment can be very stressful and troublesome for not only owners. But also for the members of the board of directors. The best and most effective way to avoid the Condo Assessment is to ensure the reserve fund.

Most often, the owners most likely would like to pay a very small amount as element fees. As a result, the other coverage expenses always become too high. But if the board of directors always decides a considerable amount of money for element fees. There will be more money in the reserve fund. And eventually, the corporation can avoid the special condo assessment.

In the Bottom Line

Special assessment of condominiums can be complex and troublesome for some owners of the condominium. There is also some alternative of a special assessment. Borrowing money can be an excellent alternative for the special assessment. No matter what is the decision the board of directors makes.

The decision should always be backed up by Canadian real estate law if you are still confused about the condominium or have questions regarding this issue. Then you can take help from any professional farm. Hopefully, this writing helped you to understand Condo Assessment in Canada.

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