Social Expenses Not In Budget

Condo Living sent the following question to Shlomo Sharon, President, Taft Forward Property Management Group

Question

We live in a relatively small, self managed condominium. Recently, through concentrated efforts to ensure we comply with all aspects of the new Condominium Act, we have changed from a friendly, family-oriented building to one where there is animosity and distrust of the board. One of the main reasons for the change is lack of communication and an over-aggressive president.

In past years, the cost of all social events which are very few and would not exceed $300 would be paid from the general operating fund. We have now been informed that any money for social events or sympathy recognitions will not be paid for by the condo, but must be raised through a social membership and restricted to those members only who wish to participate.

What area of the Act deals with these concerns?

Answer

Living in a condominium corporation requires very clear communication among the board of directors, the management company and the owners.

While it is possible that sometimes individuals on the board of directors may be too aggressive, it is my experience with various boards that they are composed of individuals who care about the well-being of the corporation, as well as the people who live there.

There is no provision in the Act that deals with social activities. The Act requires that a corporation have a budget which is comprised of common expenses. All items that qualify are listed in the corporation’s declaration, so you should review the schedule to the declaration to see whether this type of expense could fall within those categories.

If not, then it may be that the Corporation cannot collect this expense from the owners as a common expense and to make it one would require an amendment to the declaration. This is quite involved and not easy to do.

If it is determined that the activities could fall under a common expense category, then the directors have the discretion to decide whether to include them in the budget. It is ultimately up to the board to decide, but do express your concerns to the board.