Shared facilities

Shared facilities is when two or more corporations, or other properties, co-own certain amenities, infrastructure, sidewalks, roads or driveways.

Types of shared facilities
Shared facilities can be co-owned between a residential condo corporation and:
 • one or more residential condos.
 • a commercial condo corporation.
 • a retail store condo corporation.
 • one or more rental buildings.
• a common element condo corporation.
 • a hotel.
 • a public housing building.
 • a co-op.
 • a combination of the above.

The attraction
Shared facilities is sold as a great way for the owners to share the costs of amenities and services between one or more condos and/or other corporations so that the number and size of the amenities can be far greater than what a single condo could afford. The shared maintenance and upkeep will also be far cheaper.

The costs are split between the corporations based on a percentage that is stated in the declarations of each corporation. For residential condos, it is usually based on the number of residential units.

What are the shared facilities?
That depends on the way the developer built the development and what was included in the parties' declarations. Among many other items, shared facilities can include:
• security huts & gatehouses
• landscaping and snow removal
• roads, driveways and sidewalks
• water and sewage systems
• visitor parking lots
• lamp posts
• fences
• underground parking garages
• fire alarm & security systems
• electrical transformers
• a grand hotel-type lobby
• guest suites
• swimming pools, hot tubs & saunas
• fitness centres
• movie theatres
• basketball and tennis courts
• bowling alley
• party, ping pong, card, mahjong rooms
• library
• pool rooms
• barbecue pits
• outdoor terraces
• dog runs
• the property management contract
• management office
• car wash & a car sharing program
• bicycle racks
• retail shops & day care centres

These amenities and services is how the developers sell prospective buyers on the idea that they are buying a home in a gated community that offers “five-star” hotel comfort and security plus resort-type amenities.

The amenities may be in one or more condo buildings or in a separate building. The residents of other condos may have fobs that allow them to access the shared amenities in your building.

How is all of this paid for?
The shared facilities is jointly managed by the participating corporations and it has its own budget, operating and reserve funds. It also has its own Reserve Fund Study and bank accounts.

The shared facilities committee agrees on the yearly operating budgets and the required reserve fund contributions. The shared facilities committee submits to each of the parties their portion of the annual costs. These costs are added to each unit owner's monthly fees.

Different phases
If a developer is building different phases over a period of several years, the first condo corporation pays the full cost of the shared facilities until the second, third and even the fourth phases are registered and start paying their portion of the costs.

How are the shared facilities managed?
Usually the board from each corporation appoints a director to sit on the Shared Facilities Committee. If there are three or four corporations, each will have an appointee.

Decisions are made by committee vote. Sometimes resolutions are passed by a simple majority and sometimes decisions must be unanimous. It depends on what is stated in the declaration and by-laws.

The committee hires a property management company, usually one of the corporations' management companies, to manage the shared facilities.

Issues with shared facilities
Shared facilities are very hard to manage as the different corporations have different standards and have different abilities or willingness to pay to operate and maintain the amenities and services. A condo that has financial problems or higher monthly fees than the others, may insist that the shared facilities fees be frozen or reduced.

Since each corporation has an equal vote, a large corporation may feel that it is being pushed around by one or more smaller corporations.

It can be impossible to reach consensus.

Many owners do not know that there is a shared facilities committee, how it is formed or who their representative is. They are less likely to know that the shared facilities has its own audited financial statements, fees and reserve fund.

They can be shocked to receive a special assessment from the shared facilities committee.

A surprising number of condos do not include shared facilities audited financial statements in their AGM packages and sometimes the shared facilities financial statements are not included in with the status certificates.

Disputes between the parties
It should not be surprising to find that the different corporations disagree on the required fees, what shared facilities to keep open, what level of services should be provided and what major repairs and replacements should be undertaken and when.

It is common for the parties to quarrel. There are times when a condo corporation refuses to pay its share of the fees or may refuse to allow residents from the other corporations to enter their building.

Many shared facilities agreements call for mediation and arbitration to settle disputes between the shared facilities members. Lawsuits, or threats of lawsuits, between the corporations are not rare.

Shared facilities may be sued by persons who had slip and fall accidents or got hurt using the facilities. These lawsuits must be disclosed in the status certificates.

Some corporations want to terminate their relationship with the shared facilities. The other corporations may allow them to leave if they pay a lump sum as compensation. (Such separations must be agreed to by a vote of the owners.)

That injection of cash may help the committee make much needed major repairs to the facilities so it may seem like a good deal in the short term but down the road, the reduction in monthly payments is sure to hurt.

top  contents  chapter  previous  next