Everyone hates a tax collector
“There are very few people who tell me they want their taxes raised.”
—John Tory (Mayor of Toronto)

A condominium apartment building is a very complex structure. It can have two to three thousand items that need maintenance, has monthly utility bills and contractors and employees that need to be paid.

Money has to be raised to pay for:

Operating costs
There are the operating costs that include the cost of:
• utilities
• cable TV packages
• superintendent
• cleaning, drywall repairs
• security
• maintaining the elevators, boilers, machinery, amenities
• landscaping and snow removal
• various inspections that are required by provincial and municipal codes
• management and professional fees
• pest control

Reserve expenses
There are reserve fund expenses. Some of these costs are minor but others can be extremely expensive:
• roof repairs
• windows, balconies
• the exterior walls
• repairs to the underground parking garage
• new boilers, chillers and generators
• renovating the elevators
• replacing carpeting and wall coverings
• renovating or replacing fire panels
• renovating amenities
• replacing pipes, pumps, valves and hot water risers

Getting bushwhacked
Nothing like being part of a newly elected board and finding out out that the previous boards kept the monthly common element fees low by not paying all of the bills and pushing expensive repairs out into the future.

Deferred maintenance
This can be the biggest expense of all. A new board finds out that the building does not meet the fire code, the garage has serious water leaks and needs $2 million in repairs, the elevators need expensive renovations, the building envelop leaks and the balconies are unsafe.

All of this has been left for you to deal with.

Unpaid operating costs
This is my favourite. The utility bills have not been paid in full and so the condo is paying huge late penalties and the utilities are threatening to cut services.

There are also thousands of dollars in unpaid invoices and the contractors will not do any more work until their accounts have been paid in full.

The expenses are next to endless and they can no longer be ignored.

Increasing the fees
A condo corporation needs money and there is only one way that it can raise money and that is by taxing the owners by assessing the owners monthly maintenance fees or taking on a loan.

The piddly amounts collected by renting out the party room, guest suites, lockers and maybe parking spots doesn't amount to much.

Backlash
When a board announces a larger than usual fee increase, or far worse, a special assessment; the owners will scream. How many freak out depends on whether they are landlords who want to protect their profit margins, fixed income owner-residents who are having trouble paying their bills or low-income owners who are in over their heads and would, most likely, be better off selling their units and moving elsewhere.

Demands to lower the fees
"The art of leadership is saying no, not saying yes. It is very easy to say yes." —Tony Blair

The disgruntled owners have three ways to lower the fees.

Harassment
They can harass and threaten the directors until they repeal the fee increase or they resign. The directors may find graffiti, feces or raw eggs on their entrance doors, their cars vandalized and they are ostracized in the common elements.

A whispering campaign can be extremely hurtful when gossip and anonymous leaflets are distributed through the condo calling the directors and the management crooks who are stealing the owners' money and/or are squandering money on unneeded expenses.

Wait for the AGMs
The disgruntled owners can wait till the AGMs and vote in candidates that promise to lower the fees. This can take time but it is effective.

Requisition
If they are in a hurry, the owners can submit a requisition to remove the directors and replace them at a Special Owners Meeting.

How to respond
Directors who need to counter the appeal of "Fee Choppers" face the same difficulties as what faced the candidates that ran against Rob Ford and Donald Trump. Facts and logic have a hard time countering emotions and greed.

It helps if the majority of owners live in their units, are level headed and have the money to afford to pay annual increases in monthly expenses.

However the best approach is to regularly communicate with the owners by newsletters, hosting a website and holding regular information meetings.

A presentation showing where their money is going can help a board show the owners why fee increases are necessary. A chart showing the annual increases in utility and cable TV bills and maintenance costs can be a big help.

If people know how their monthly expenses are being spent, if they believe their money is not being squandered and if they realize that a well maintained building not only increases in value but are far more pleasant to live in, then perhaps the board can hold the Fee Choppers at bay.


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