A condo, short for condominium, is an individually owned residential unit in a building or complex comprised of other residential units. Condo owners share a common space and often pay association fees to maintain the common space, amenities, and other shared resources.Investopedia
Condominiums can be either residential or commercial and simply stated, a condominium owner holds two different aspects of their property. Condominium owners own their individual unit, as well as a joint ownership in the “corporation”. The Corporation is responsible for all of the common spaces, and as stated above, shared resources. This could include common spaces from hallways and foyers of apartment style buildings, to gyms, parking spaces, lawns and more. Let’s take a closer look at what this means.
Title ownership of your unit pertains to the individual living quarters that you will live in and make your own. This can look different for different condominiums. It could be a mobile home on a lot, a semi-detached home in a community, or an apartment within a larger complex, or variations of these. Specifically speaking in an apartment style complex, often it is everything contained within the interior walls of your unit (anything exterior belongs to and is under the maintenance and care of the corporation). This can include specific rights and ownership of things like parking spaces, balconies or outdoor spaces, but not always. To be sure of what your ownership title includes, be diligent in reading your purchasing agreement, as well as the bylaws of your condominium. Each condominium is different so it is important to understand what you are purchasing before a transaction is made!
The condominium model of ownership can be complicated, as every condominium corporation is different. When you purchase a condominium you become a shareholder in the corporation, which is a legal business identity. This means that you have rules and bylaws that you need to abide by for the health of every owners investment. These bylaws also clearly lay out duties to ensure that all the needs of the property are being attended to. We cannot stress how important it is to understand your bylaws as this can greatly affect what you can and cannot do within your own property.
Condominiums are divided into individual units of varying sizes. Every unit has a “unit factor” which is established during the development of the condominium. This determines how much of the common property is your share, as well as your condominium contributions, and voting rights. It is important for owners to review the condominium plan and the title of the unit to confirm their proportionate share of the factors. Should there be a call for a Special Levy, owners with larger unit factors can also expect to pay higher contributions in those instances as well.
Bylaws are the legal guidelines that the Condominium abides by. These divide all of the necessary responsibilities, ownership guidelines, and rules that the Condominium Board uses to make decisions on behalf of the Corporation. These are developed to ensure that decisions are equitable and consistent for all owners. For example, while it may be the responsibility of the Corporation to maintain the exterior walls of a building, the unit owner may have full responsibility of ensuring their balcony is in good working order.
Bylaws include (but are not limited to) things such as the care and maintenance of the common property, rules regarding pets, what areas are corporately owned or privately owned, common area guidelines, legal responsibilities, and more. They also hold the organizational structure for the management and decision making processes for the Condominium, which brings us to the Board of Directors.
Board of Directors
After a development is past the first 2 years of selling off units, the owners of the units must vote on a Board of Directors (also known as Board Members), at the Annual General Meeting. These individuals are responsible for making all of the important decisions on behalf of the owners. This is a volunteer position and Board Members must legally act in the best interest of the Corporation.
Board Members are charged to make decisions according to the bylaws of the Corporation. This includes decisions on things such as maintenance vendors, professionals that assist the corporation, day-to-day operational decisions, and more. They can choose to run the corporation under a self-management model, in which they choose to utilize volunteers for the important decisions, or they may choose to hire a professional property manager.
There are many reasons that a board may choose to hire a condominium manager. They may have been self managed and have either fallen behind in their responsibilities or are unable to keep up with the demands of the property. They may have also found that by paying various vendors and professionals, they are better off consolidating their finances into one place with a property management firm such as Key Investment Property Management Inc.
Property Managers are under the guidance and direction of the Condominium Board. They are given the bylaws to understand the responsibilities of all parties so that they can adhere to the specifications of how your individual corporation functions. We work with the Boards to build a plan that executes the wishes of the Corporation, and as a hired manager, our decisions stay within the confines of what the Board and Bylaws dictate. If you have any questions on who you need to talk to about any given decision, we will be happy to assist you and answer your questions!
As a Property Management Business, Key has worked hard to build a team of professionals that is dedicated to building you a property management plan that is both effective financially and practically. We strive to meet the goals of your property while ensuring a custom approach that is built around the unique needs of your Corporation.
Whether you are a new Corporation looking to stay on top of your responsibilities to ensure the longevity and increase in your investments, or you are an existing Corporation that needs help getting back on your feet, we are here for you!