‘I can’t afford it’: Owners outraged after monthly payments double at Ottawa condo
By Maggie Parkhill
30 April 2018
poses for a photo in front of 2630 Southvale Cres. in Ottawa Thursday
April 26, 2018. Tony Caldwell/ Postmedia
Joumana Azzi says she could barely believe her eyes when she saw it:
her monthly condo payments were about to double, thanks to $2.3 million
in repairs needed for two buildings on Southvale Crescent.
News of the levy, she said, brought other neighbours at a meeting about
the cost to tears, describing how they might have to turn their keys
over to the bank or take out a loan. Some talked about selling their
With less than two months’ notice, residents of 85 units at 2630 and
2650 Southvale Cres. in the city’s south end were told by their board
of directors in mid-February that they would have to contribute more
than $2.3 million over the next three years after a “special
assessment” concluded the buildings were in need of major repairs and
While this may seem like an unfair demand, it’s legal under Ontario
law. What’s happening to the residents along Southvale Crescent is an
illustration of the very few options — none of them ideal — condominium
owners have if they find themselves in a similar situation.
The $2.3 million amounts to a 504 per cent increase in the total
contribution to the condo’s reserve fund, a special fund all condos are
mandated to have to pay for major building repairs or upgrades. The
fund is managed by the condo’s board of directors.
Each owner was originally paying around $700 each month in “condo
fees,” said Azzi, which included money that went toward the reserve
fund. The $2.3 million fee means each owner now has to cough up almost
$800 more per month.
For many, that totals costs of around $1,400 to $1,600 per month — and that’s before any additional mortgage payments.
“For me, with my job, I can’t afford it,” said Azzi. “My whole income doesn’t afford that much money.”
the result of a reserve fund study
The $2.3-million increase is the result of a reserve fund study, which
a condominium corporation is supposed to complete every three years,
according to the Condominium Act.
A third-party expert, usually an engineer, is tasked with evaluating
the property and determining what major repairs or replacements it
needs in the near future, such as a pool or garage.
The amount each unit owner is expected to contribute to the reserve fund is changed, depending on what the study says.
If major repairs are needed, or if the reserve is underfunded, the
board can levy a “special assessment,” or an amount that must be paid
by all owners, regardless of whether they use the “common elements.” If
an owner cannot pay, the condominium corporation can put a lien on the
home. A special assessment can happen with no vote by the individual
Azzi said she is not convinced by the rationale to levy the fee in one lump sum.
“Why don’t you spread the study over many years instead of repairing
the whole building, including the tennis court and the pool and the
elevators and the floors and, and, and, and, and?” she said.
Richard Mackenzie, another owner in the building, said he was worried that some might not be able to pay off the fee.
“There are a lot of seniors in this building,” he said. “Some of them
are 80, 85, 90 years old and you’re going to tell them to get a loan or
get a line of credit? That’s not going to happen — they’re on pensions.”
there is little recourse owners can take
According to the Condominium Authority of Ontario, there is little
recourse owners can take if they disagree with a special assessment or
can’t afford to pay it. The decision to levy a special assessment can
be challenged in court, but owners will only win if they can prove
proper procedures weren’t followed, such as not getting an expert third
party to do the study or not getting the approval of the board.
If all else fails, the CAO suggests holding an “owner’s meeting” to express their concerns to the board.
Owners can also sell their unit, but the special assessment must be
disclosed in the transaction, which can lower the value of their home
or cause a potential buyer to walk away. If all else fails, the CAO
suggests holding an “owner’s meeting” to express their concerns to the
The residents of 2630 and 2650 did call such a meeting on April 7 but say nothing changed.
“We had no answers for any of this except their lawyer just being a lawyer,” said Azzi.
While it may seem unusual, a special assessment fee is more likely to
happen with older buildings built before 2001, which were not required
to conduct reserve fund studies under the Condominium Act. However,
according to one lawyer, it can happen to any building with major
emergency repairs or mismanaged reserve funds.
Chuck Merovitz, an Ottawa lawyer who specializes in real estate
disputes, compares it to the money and resources that go in to owning
“If you own a house, and you don’t do anything to it, and then all of a
sudden you think, ‘Oh my, I better do something,’” said Merovitz of the
upkeep required to maintain a home. “If you have a condo that’s never
done a reserve fund study, they’re going to find themselves in a big
While Merovitz said he wouldn’t call this kind of massive increase
common, it can and does happen — he knows of a similar case where the
reserve fund study determined that each unit would have to contribute
$50,000 over five years.
Ultimately, Merovitz said, it’s up to the board of directors to protect the owners.
“If your board has properly looked after reserve funds and reserve fund
studies throughout the history of the condo, that’s not going to
happen,” he said.
James Davidson, the lawyer representing the condominium corporation who
spoke on behalf of the board, said that while it’s a difficult
situation at Southvale Crescent, it’s a necessary one.
“I’m happy (the board is) going to be planning well,” said Davidson,
who noted that if it did not accept the recommendations of the study,
it could be held liable if anything went wrong with one of the common
elements, such as the pool or garage.
“I’m not happy that they’ll have to have this big increase. That
doesn’t make anybody happy,” he said. “But I certainly feel the board
has good reason to have confidence in the study that they’ve got.”
He added he doesn’t see any evidence of the board mismanaging the funds
but that the special assessment fee is simply the result of the
engineer taking a much closer look this time around compared with the
last reserve fund study done by another engineer.
He argued the board can’t space out the reserve fund contributions any more than it is.
According to the Condominium Act, the prescribed period for paying the
amount required by the reserve fund study is usually one year. In that
case, it would mean residents would have had to pay more than $2,100
per month in reserve fund contributions alone. But because of a pending
law, which would extend that grace period to three years, the board was
allowed to space out those payments.
Davidson said he and the board sought out other solutions, having
“tough meetings” with the engineer who conducted the study to see what
could be changed to lessen the blow to owners. Though it’s not easy for
the community, he said, he ultimately believes this is the best deal
they can get.
“It happens,” said Davidson. “It’s not all that uncommon.”
Mackenzie said he is running to replace the current board of directors
with several other owners, hoping they can still make changes to the
reserve fund contributions. That vote for the new board is scheduled to
happen Monday night.
However, Merovitz said he doesn’t believe a board’s decision can be overturned when it comes to a reserve fund study.
In the meantime, auto-payments are already being taken out of owners’ accounts.
Condo owners keep board of directors after fees double
01 May 2018
Condominium owners angered after learning their monthly condo fees
would be doubled with only a few weeks’ notice were unsuccessful in
their bid to oust their board of directors Monday night.
A reporter from this newspaper was barred from entering the meeting, with the condominium corporation’s lawyer citing privacy.
The owners would have needed 43 votes in favour of each new board
member in order to remove any original board member. When the votes
were tallied, each new member received between 34 and 37 votes,
according to two owners who attended the meeting. Only 69 of the
building’s 85 unit owners attended the meeting, they said.
“There were a lot of people missing,” said Joumana Azzi, an owner in
the building, adding that there was a push to get people to sign
proxies prior to the meeting.
“I’m disappointed about the vote,” said Sigismondo Springer, another owner. “But the most important thing here is the money.”
Residents at 2630 and 2650 Southvale Cres. were recently slammed with a
$2.3-million increase in their reserve fund contributions, money meant
to be used for emergency repairs or upgrades. This increase, spread out
in monthly payments over three years, means owners are suddenly paying
around $800 more per month — for many, this means total monthly
payments of $1,400 to $1,600 per month — in addition to any mortgage
The jump is the result of a special assessment recommended by an
engineer who studied the building and suggested many major repairs and
upgrades that some owners, including Azzi and Springer, say are
unnecessary. The hike was accepted by the condominium’s board of
Faced with such short notice, some residents say they’re looking into borrowing money or selling their home.
While the special assessment might seem unfair, under Ontario law once
a special assessment is levied, there is very little recourse for
owners. If an owner cannot pay, a lien may be put on their home. If an
owner wants to sell their condo, they must disclose the special
assessment to potential buyers, which may scare them off or result in a
“It’s a loophole they have to take a look at,” said Springer of the
provincial government. “A lot of people believe it’s a legal
Although owners were not able to remove their board members, changing
the board would not necessarily have meant they could change the
special assessment. Azzi said she thinks this might have been a reason
the vote was not successful.
“People think with the old board or a new board we still have to pay,”
she said. “Some people didn’t like some of the new board, and some
people didn’t like some of the old board, so people got confused.”
In the meantime, owners are already paying up. The first doubled monthly payment was taken out of owners’ accounts on April 16.
top contents chapter previous next