Condos—fourth level of government or members-only clubs?
Politics in ancient city states
Many people in the condo industry say that condo corporations should be considered our fourth level of government.
This seems to make sense as a condo is a small community and the board
of directors raises taxes (fees), maintains the property and sets
by-laws and rules that all the residents must follow.
The directors are democratically elected and are accountable to the
owners and in theory condo affairs, like the political life in ancient
Greek cities, are discussed and voted on by the owners; each having
Charter of Rights
As this article in CondoBusiness
states, the courts have ruled that, in the main, the Canadian
Charter of Rights does not apply to condo corporations as "the judge
concluded that condominium corporations are not “government,” nor their
activities “government-like.” In law, therefore, a condominium
corporation is not like a fourth level of government at all!"
A members-only club
In reality, condo corporations are more like members-only clubs
that people voluntarily join to enjoy its benefits and are free to
leave whenever they wish. To get out, all they need to do is get off title by selling their unit.
Like private clubs, condos are privately owned non-profit corporations
that offer certain amenities and benefits, restricts entry to
members and their guests, levy fees and have a set of rules and
regulations that the members must obey.
Purchasers need to fit in, need to follow the rules and conform to the
condo's norms because like private clubs, condos penalize owners who
disobey the declaration, by-laws and rules up to, and including, forcing owners to sell their
units and leave the corporation.
Condos are like private clubs in the costs involved and the benefits they offer. Both the Granite Club and Possum Lodge are private "members only" clubs but they could not be more dissimilar.
Buying a condo unit is also like joining an investment club. You invest
$100,000 to $1 million, or more, in a "an investment pool" and elect
five directors, who have anywhere from great to next to no management
and financial skills, to look after your investment.
If they manage the condo corporation well, your investment grows in
value. If they manage poorly, you lose money. Like all other
investments, there is a best time to buy and a best time to sell.
What does this mean to condo purchasers?
condo, like every private club, can be completely different from its neighbours,
so it is very important for a purchaser to pick the right condo
to "join" and only then select a suitable unit in that corporation.
Buying a condo is also like buying investments. It is important to know what
to buy, when to buy and extremely important to know when it's time to sell.