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Why I find reading AGM packages so interesting —Part 2
Why I find reading AGM packages so interesting —Part 1
When will the Toronto real estate bubble burst?
Debt, mountains of debt
Being lost in a huge condo complex
Planning a move to Hamilton?
Everyone can be duped by fake news, experts say
Spring has finally arrived
Our last condo
What a dumb mistake—Part 1
The Treasurer's burden


Why I find reading AGM packages so interesting—Part 2
March 2017

Here is a campaign leaflet that was included in a recent AGM package. The first thing that caught my eye was that the incumbent director was writing in the third person. (I wonder if he writes like that in his job performance reviews.)

Very knowledgeable and understands budget expenses and building operations.

Mr. Smith (not his real name) has diligently fulfilled his role as a board member at our condo for the past 3 years. During this time, he has utilized his experience as a landlord and knowledge from his education in technology, business and law to make informed decisions. For the duration of his term, our condo has been possibly the most well managed condo complex in our District and throughout Ontario. With Mr. Smith’s participation and influence, this condo board has been able to preserve the original beauty of the complex and services provided, without increasing maintenance fees.

Mr. Smith’s primary goal has been to preserve the original structural design, function and style of our condo and to ensure the safety of all its residents, all while keeping costs low; therefore, allowing each resident to feel proud to call this condo their home. His intention is to continue to proudly serve on the board, to ensure maintenance fees remain low, that preservation of the condo continues and resident's needs are being addressed.

During his term on the board: "Our condo has been possibly the most well managed condo complex in our District and throughout Ontario."

That is quite the boast.

Mr. Smith makes the point (three times) that he focuses on keeping the fees low. (This condo has not had their fees increased since they were set by the builder five years ago, something that the nearby condos could not achieve.)

How do they do it? All condo directors in Ontario; dare I say it, in the entire world are anxious to know.

Actually it is due mostly to smoke and mirrors. Reality consists of:
• Levy a Special Assessment.
• Having annual operating fund deficits.
• Ignoring a million dollar shortage in the Reserve Funds.
• Ignoring hefty recommended Reserve Fund increases.

However, in most condos, the owners never catch on. Very few read the financial statements carefully enough to understand that the incumbents, though all claiming to be extremely well educated and holding important managerial jobs, are doing what far too many condo boards do: keep the fees low and fail to put away money into the Reserves that are needed for future expenses.

This is a new condo, just five years old; too new to need major repairs and replacements. In fact the Reserve Fund Study calls for no expenditures this year, or in the last year, so they can get away with this.

The investor-landlords who benefit from low fees will be happy and since they are the vast majority and they vote by proxy, it seems certain that the incumbents will be re-elected.

How much spent on legal fees?
A good way to get a pulse on how well condo residents and the board behave is to see how much the condo spends on legal fees.

There are condos that spend $60,000 to $100,000 a year, almost every year, on disputes with contractors and owners. Those are condos best avoided.

One set of AGM documents show that in 2016 a small condo spent $0.00 on legal fees and $1,600 in 2015. Digging back in the records, showed that this $1,600 was the highest spent in a year on legal fees.

How do they do it? The condo has a competent board and respectful owners and residents. How else?


Why I find reading AGM packages so interesting
February 2017

Condo owners should read their AGM packages; from the first page all the way to the end.

A new AGM info package is like buying a mystery grab bag at a flea market; you never know what you may find inside.

Here is a couple of examples:
The $75Billion condo lawsuit
Imagine my surprise to find in the back of the audited financial statements that a condo was pursuing a $75Billion lawsuit. (emphasis in the original.) Two directors signed off on the statements and no one at the AGM questioned this so it had to be real right?

Ahh, no. When I queried this number, an embarrassed auditor agreed that the number should be $75 million. (A number that is 1,000 times smaller.)

Was I, and a single owner who also spotted this error, the only ones that examined the financial statements? Most likely.

A proven track record for reducing condo fees
The candidates campaign leaflets deserve a careful read. In this case, an incumbent who was running for re-election, bragged about how much money he saved when he was the vice-president of a nearby condo. Read the second bullet point and then the last one:

Which point is accurate? The 28% reduction in fees claimed in the second point or the zero percent increase claimed in the last line? They both can't be true.

How many owners spotted this contradiction? Very few I suspect.

Lets look up his previous condo on to see what we find.

       Green line–his old condo's fees      Grey line–the area average fees

Oh my! The Internet tells us a different story. It tells us the condo fees in his old condo corporation went up every year since it was incorporated. A 44.4% increase in the monthly maintenance costs for an average annual increase of 8.9%. Not so impressive is it?

Informing the owners
How can you inform the other owners of the deceptions on the election leaflets? That can be very difficult.

With the use of paper proxies, there are very few people showing up at the AGMs. In some buildings of 600 units, perhaps two dozen owners attend the AGM. Now that some condos are using electronic proxies, those numbers will drop even lower.

As far as informing the owners who do bother to show up, unlike the auditor who has to answer all relevant questions at the AGM, the Chair at most AGMs will not allow voters to ask the candidates questions. Therefore, the wildest promises, most inaccurate accomplishments and the most dishonest qualifications can go completely unchallenged.

If you feel strongly about any untruths that you find prior to the AGM, you could print a leaflet with your findings and distribute them throughout the condo. On election night, you could hand out leaflets at the door leading into the AGM.

Demand personal information
One of Ontario's largest condo management company issued this form prior to an AGM. All candidates wishing to run for election for a position on the board of directors needed to fill it out.

The filled out forms were distributed along with the completed candidates election sheet to all of the owners.

Why do the candidates have to fill out:
1. Their full legal name?
2. Their address?   (Okay this makes sense.)
3. Their e-mail address?
4. Their phone #. (This too makes sense.)
4. Their date of birth?
5. Occupation?
6. A photograph. Why do they need a photograph?

What's worse, the management company sent a copy of the filled-out nomination forms to all of the owners as part of the AGM package. One woman included her photo, birthdate, her unit number and e-mail address. (All of the other candidates were smart enough to ignore the request for a birthdate but included their unit numbers and e-mail addresses.)

Privacy issues
The requesting and publishing this information violated the candidates' privacy and shows a lack of common sense.

Will the candidates start getting a flood of junk or hate e-mail? What if the candidates have residents pounding on their door day and night?

Discourage candidates
Is it not possible such snooping would have discouraged candidates from running? I am sure the publishing of this private information will discourage future candidates.


When will the Toronto real estate bubble burst?
January 2017
Will the real estate bubble burst? I am no prophet so I asked a reader who owns commercial and residential real estate throughout North America what he thought. He replied:

"Good Morning;
Personally I believe this is the time. In 1992, same thing happened just after the US election, Our economy was booming, and then all of a sudden it dropped.

I remember in 2008, lenders were giving 50% Loan-To-Value (LTV) and interest rates were low, and real estate was through the roof (not as high as today, but it was high). As soon as the US election was over we saw slight declines in our economy in Nov and Dec 2008, then Jan 2009 hit us like a brick wall!

I believe the same will happen again this time."

Will the balloon burst by spring? I don't think anyone knows. However, if prices hold up until the late spring, I figure we should be good for another year.

Detached houses will do better than condos as supply is low while demand is high. Condos may not do so well. There are 170 new condo towers coming on stream in 2017.


Debt, mountains of debt

December 2016
When I started driving, 36 months (3 years) was the longest period that anyone could get a car loan. Once it was paid off, you took a year or so to save up a down payment so you could afford to buy a replacement car.

I recently looked at some auto advertisements in the Toronto Star.

Today, you can buy a new Chrysler 200 for only $127 bi-weekly over 96 months with nothing down. That loan is for eight full years.

It is just a standard car with a long-term loan, not a house with a mortgage. This is a good indication that Canadian consumers are flat broke.


Being lost in a huge condo complex
November 2016
“They can print statistics and count the populations in hundreds of thousands, but to each man a city consists of no more than a few streets, a few houses, a few people.”
― Graham Greene

When I look at the huge new condo complexes that have been built:
World on Yonge • over 1,200 residential units
• three-level shopping mall
• hotel
• office space
Hullmark Centre • two towers with a total of 682 residential units
• office condos
• retail shopping complex
Maple Leaf Square • two towers, 872 residential units
• large retail complex
• shared facilities
One Bloor • 76 stories
• 732 residential units
• 3 levels of retail
Ice Condos • 1,343 residential units
Aura • 995 residential units, one tower split into two
   residential condo corporations
• commercial units
• underground retail stores & food court

I wonder how can a unit owner feel that he or she has a meaningful say in how any of these residential communities are managed? The scale is overwhelming.

A second issue with these huge condo corporations is that they would need management, security guards and cleaners that have large hotel-type training which is far superior to what average condo contractors require.


Planning a move to Hamilton?
October 2016

A young man in Toronto sends a public letter to Mayor John Tory complaining that housing is too expensive in Toronto. Below are some reader Comments about the high costs of commuting from their jobs in downtown Toronto to their homes in Hamilton.

A few weeks ago I posted to r/Hamilton asking about owning a home there and commuting downtown daily. Overwhelmingly, the responses were negative with some people saying that they actually sold their Hamilton property and moved back into the city because the commute was so horrible. We can do better as a city.

christinecatherineThe Annex
The commute is very expensive too. Around $500 a month I think? That doesn't seem like a savings to me. I've been looking at jobs out there and it's hard to find full time positions.

That's what I'd heard as well. Especially depressing are those who make the move for a bigger home, realize the significance of the commute, and have to downsize to get back into the Toronto market.

TorontoBob22The Annex
Around $500 a month I think?
Geez, is that on top of the normal monthly car costs?

I think they're referring to GO cost.

christinecatherineThe Annex
I was referring to the GO fare from Hamilton to Union. So yeah you would either need to drive to the GO station or pay for a Hamilton bus. I don't doubt that it's very expensive to commute.

I own my car no payments. $120 For insurance plus gas for weekend driving and what not, so thats about $80. Then $120 a month for TTC metro pass. So I'm spending about $320 a month on transportation. Add in the people who pay for Go Trains or who are paying for their car and $500 is a very easy number to hit

I pay $140 for my car insurance.
About $20/week in gas (weekends, back & forth from Go Station).
$18 per day for Go Train
$6 per day for TTC.
It really sucks.

smaudioForest Hill Village
I have been saying and thinking this ever since I moved here. Glad someone else has some common sense on the issue.

Until the GTA gets a better, cheaper, quicker and more frequent transit system, commuting into Toronto every work day is not pleasant, quick or cheap.

However, when you realize that Toronto cannot build a six kilometre, one stop subway extension in nine years and within a $3 billion budget, better transit is not going to happen any time soon.


Everyone can be duped by fake news, experts say
September 2016

TORONTO — When their story about a condo developer who forgot to put bathrooms in a Toronto-area highrise went viral last week, writers at the CBC's satirical show "This Is That" were faced with an unexpected conundrum: many of the people who heard, read or shared the story online thought it was true.

It wasn't the first time that readers and listeners had taken the show at face value — the radio program regularly plays voicemail messages from people who mistake it for real news — but enough people flagged it to the CBC this time that the public broadcaster took a drastic step to clear up any possible misunderstanding.

It changed the show's headlines to include one word, in capital letters: "SATIRE."

"What we immediately realized is we have to take action right now because the last thing we want is to fool people and damage our news brand," said Jeff Ulster, director of digital talk content for CBC Radio.

So why were so many people fooled? There were two reasons. First, it was not made obvious that this was a joke. However there was another reason; something more important. From the report:

From the interview:
In his interview with This is That, developer Jordan Petrescu, admitted a mistake had been made but surprisingly was not willing to take the blame.

"There are no bathrooms in the units, but there were also no bathrooms on the plans or in our show suites," says Mr. Petrescu, "so technically, our customers bought these units knowing they were bathroomless."

What brass Mr. Petrescu showed. Buyer beware.

We are now so use to developers cutting corners, deflecting blame and giving less than what the buyers expected, that the "story" did not seem too far fetched.

It is not the CBC who should feel embarrassed. It is the developers who allowed their image to fall so low that for many, this "story" was believable.


Spring has finally arrived
May 2015
I now feel confident that spring has finally arrived. It was my sighting of the first robin of spring, nor the early morning singing from hundreds of birds near my condo or the sight of motorcycles on the streets.
It was the sight of front lawns covered in green grass and yellow dandelions.

My condo greeted the news with a whirlwind of spring-cleaning. In the last two weeks, we have had the parking garage swept and the lines re-painted. The windows and the windows have been cleaned and the first grass cutting and lawn clean up has been completed.

The heating has been turned off and the air conditioning turned on and our annual fire alarm system testing has been completed. The winter mats in the hallway and the elevators have been put away until next winter.

My neighbours are sitting outside to enjoy the sun and watch the people and the dogs.

What’s more, I cleaned our balcony and planted our annuals. Then my wife and I enjoyed our first cup of coffee sitting outside and enjoying the view.

I don’t think I have ever been so glad to see the return of spring.



Our last condo
Summer 2014
We have decided that this will be our last condo. We plan to live here until we are too feeble to live on our own or until we die.

We love our home. Our apartment is large, bright and cheerful. Our neighbours are respectful, warm and polite. The grounds are beautiful and we love our amenities.

We have a pleasant view, we grow flowers on the balcony and play with our cat. Our life here is peaceful

Yet, we stay watchful; always alert.

If we get into a serious dispute with our board, if we suspect that there is corruption, if we see that the building maintenance and cleaning is starting to deteriorate, if we get bad neighbours or if the board stops raising the fees to keep up with inflation and the reserve funds start to diminish, we will be the first to sell.

We’ll move to a rental building; we have one picked out.

We went through a four year-long battle with the board at our last condo and it was extremely stressful, frustrating and expensive.

Too many of our neighbours wouldn’t get involved. They would not put in any money, effort or time into the fight; a fight to get control of our homes and our investments. They didn’t care that one of the elevators was permanent out of service, that we had too many water leaks, that the hallway carpets were filthy, that regular maintenance wasn’t done, that there was mould in the basement and that amenities were permanently closed.

When we were organizing, and educating our neighbours on what was going on, the younger, wealthier and better-educated owners did not join us, even though they saw that we were right. Instead, they sold and got out.

We won’t take on a fight like that again. Next time we will be the ones to sell and get out.



What a dumb mistake—Part 1
Tony Zale
from Peel Region

I had just parked my car and was walking to my townhouse when I heard someone calling my name “Tony, Tony”. I said hello to him. His was a familiar face that I knew lived in the condo but at that time I did not know him by name.

He said very excitedly, “We meeting in one hour behind the swimming pool
to talk of getting rid of the present directors. They’re no good and do
nothing for us.”

A fairly large group of owners met behind the pool. Everyone’s main gripe was with the property manager. Two people mainly were stirred the pot, Dave and Mike with the others played a far secondary role at that time though later a husband and wife team and I took very active part in ousting the sitting directors.

After this meeting we easily got the 15% required to call for a special owners meeting to remove the board of directors and a few days later a requisition was duly handed to the office of the Okay Property Management Company.

The requisition wording had to conform to the law was checked and approved by a lawyer who worked for the Hero Property Management Company. Mike introduced us to Saul, the man he touted as the one who would be our new property manager.

It is incumbent for our board to hold the special owners meeting within a certain period and till that time Saul was in our complex giving us guidance and advice that we tenderfoots really needed.

I always believed that Saul’s guidance was very instrumental as he had 22 years experience in managing properties. A year later he would still say “22” and I would very good-naturedly correct him to say “23”.
The meeting was held at a local church and of course we won most handily. The victors Mike, Dave, Amin (husband) Nila (wife) the directors along with a few other well-wishers came to my place and the champagne bottle was opened. We got down to serious business at once, designating positions on the new board.

Right from the onset I said I wanted to be the treasurer. No problem and they all hailed me as one. Mike became the president, Dave the vice-president and Amin became the secretary.
Overnight our persona changed. Mike began to wear shirts with collars sometimes and Amin began to take note of everything and I began to act as a financial wizard.

We took this gathering to be the first official board meeting. First order of the meeting was to appoint a new property manager.

Mike proposed Saul and I seconded it. Amin disagreed and needless to say his wife followed suit. Dave in a very inaudible voice agreed with Amin to not appoint Saul.

Saul never in his wildest imagination thought there would be opposition and therefore had brought along the contract to be signed. I did a little sleight of hand. I had Mike sign the contract and I signed it. Most unobtrusively I passed it to Dave who seeing two signatures also signed it.

With three signatures it passed but neither Mike nor I made a big deal of it. There was another sleight of hand I did regarding the management fee to Saul’s company, Hero Property Management.

Strangely Amin was not aware that Saul has already been hired and appointed as the property manager till a couple of weeks later when we held another board meeting.

Amin’s stand was that we should interview few other companies before deciding who is to be the property manager. Mike certainly had his motives to keep Saul that the readers can decide later. Dave had neither a stand nor any motive.

My contention was that Saul had truly been guiding us and visiting us almost daily. Mike, Dave, Amin and I freely, and happily, took advice and guidance from Saul in the matter of overthrowing the old directors. We now had a moral obligation to appoint Saul or we should have told him at the outset that when we win Saul would have to stand in line and be interviewed just like any other. Saul could then have decided to either take his chances or simply stay away till the dust settled.

Few weeks later we had a board meeting and this time in the condo office at the back of the complex. Less than an hour before the meeting, Amin demanded that Saul not attend the meeting and Dave too sided with Amin telling me there was no need for Saul to be there.

I reasoned that since Saul is going to manage our complex he has to be in the know of everything that is going on. Furthermore what could we all raw hands do or talk of without someone with a 22 years experience like Saul?

Without mincing words Amin said that the team of Mike and Saul is not good news. He said in words to the effect that these two (Mike and Saul) are only planning to gouge the complex and share kickbacks with contractors.

To my way of thinking no person should be prejudged. A person is innocent till proved guilty. The very foundation of our Anglo-Saxon judiciary system rest on this premise. Was it Amin’s premonition or just his better judgment of human character? If judgment could be made by the way people looked then no great credit can go to Amin. Slam dunk. Open and shut case.

However, we all took our seats and Amin demanded that Saul not be there as he is not yet our property manager. I at once pulled out the contract and for the first time seeing the three signatures Amin got a jolt.

He knew he had been outsmarted, and totally out maneuvered. He and his wife left the meeting in a huff and from that day onward the team of husband and wife took no part in the condo’s affairs. Hence only three directors were to run the affairs of this condo complex known as The Gates of Paradise.
Some of Amin’s earlier antics need to be narrated. While he was against the appointment of Saul he asked the new contract must be exactly as the one we had with the old management company. Every company has their own contract that differs only slightly from each other. These are standard forms written and drawn by their lawyers.
Amin demanded that the contract to be signed by Saul should be exactly word to word as it was with the Okay Property Management Company. This was an unreasonable request and his lack of the so called “Canadian experience” became very obvious.

One evening, not in my presence, but as Mike, Dave as witnesses, Amin was talked into taking Saul as the new property manager. The term was agreed upon as $24.00 per townhouse per month. Very reluctantly Saul agreed and Amin thinking he scored big, shook hands and it was believed by those present that the deal at last was struck.

Not so with Amin. Shaking hands has no meaning or significance for him. It was only a prelude to more haggling. The very next day he took a 180 degree turn and refuted everything a gentleman would have abide by. Talking with Amin was like trying to nail jelly to the wall. On hindsight his walking away was a blessing in disguise.

Another stupid behaviour by Amin needs mentioning. Soon after the first monthly meeting when Amin and his wife walked out we held a BBQ in the playground at the back of the swimming pool. With a great feeling of elation at our recent victory of having thrown out the old directors we all were having one mighty fine and a lovely time.

That is all except Amin. He turned out with few scrap of papers on which he has written in his inimitable English how bad we (Mike, Dave and I) were and that this BBQ is not correct etc. I in particular had very rough words with him. In fact I have it recorded in my Sony video camera. It makes a very interesting show.

My only fear was that Mike could lose his cool and re-configure Amin’s face. I escorted Amin to his unit. Shortly after I heard through the grapevine and later later from his wife that he has gone to India to attend to his properties. I wished him luck then as I wish him now.

Mike is great in organizing social functions. He feeds others well and himself even better. It is not an understatement to say he likes to spend. We had a very good gathering of folks at the BBQ.

Mike insisted on catering as if everyone in the complex would be attending. Although a fair number came, not more than 25-30 percent of the residents turned out.

Since Mike catered for everyone living in the complex so a huge amount of food and drinks was not consumed. When I asked what would happen to the leftover food, (burgers, salad dressings, drinks and lots of bread) Mike said not to worry. Miraculously Mike had a large deep freezer available and the leftovers went straight to the freezer.

Mike came up with the idea that new set of lock and keys should be installed for the office and the swimming pool. Although I did not think it necessary Dave and I consented and gave the go-ahead to Mike. The bill came to $550.00. Just for the office and its contents whose approximate value could have been in the vicinity of $0.81 (yes eighty-one cents) and a lock for the swimming pool enclosure.

Ten unduplicatable keys were cut and each of the directors was given one key. The rest remained with me. An unnecessary expense which was a harbinger of things to come.
Saul, the property manager, suggested the next monthly meeting should be held at the nearby Swiss Chalet. We will eat and at the same time review our condo affairs. This was for me very unsatisfactory way of conducting business. I could hardly hear important discussion over the din of the other customers’ voices. For someone with 22 years experience to hold an important meeting in such a frivolous manner told me a lot about him.

Perhaps Saul’s view of monthly meeting was something like an occurring nuisance to be got over and done with ASAP.

I hear monthly board meetings have been dispensed with after I left the board.
Sometimes prescience is not required to make a judgment. When Amin determined that the combination of Mike and Saul spelled corruption, more to the point kickbacks, it was plain to see. In this case Amin was dead right.

My thought process at that time was to wait let facts and circumstances present itself, which I knew would be just a matter of time and a very short one at that. This was presented to me dozens of time but with two directors (Amin and his wife) not attending any meetings I was constantly out voted two to one.
Just a few examples:
At the board meeting I wanted the directors to be able to bring in estimates from other contractors than the ones introduced to us by Saul. Dave and Mike promptly shot down my suggestion. Only Saul was to bring in estimates for all jobs. This should have a bad smell to any decent nostril.
I wanted to introduce procedures when work orders were to be placed or something to be requisitioned. Shot down by Dave and Mike. From then onward it was to be open hunting as most of the invoices would show.
My boyhood friend a retired chartered accountant, having spent 35 years working for IBM, showed me the concept of cash flow. This, both of us believed is a very integral part of running any business, organization or non-profit corporation.

The three, Saul the property manager, Mike and Dave wanted no constraints or restraints that would act as a check to the way they wanted to run the affairs of our condo. Some of their blatant misdeeds need mentioning:
$550.17 To change a couple of locks as was mentioned previously.
$25,000.00 Spent on installing new letterboxes, house numbering, and outside lights. I objected on the grounds that never did the mailman tell any residence that they were finding it difficult to put the letters in the boxes
With the Reserve Fund Study saying that we were approximately $213,000 short of what we should be have, this spending was most frivolous.
Mike, Dave and Saul insisted that I advance Mike $3,219.19 for a Christmas party. Mike accounted for $3,066.64 and the balance $153.17 was never reimbursed. I brought up the matter several times but the question was always shrugged away by Mike and Saul.

To be continued


The Treasurer's burden
Magda Selmeci MSc, CMA

Ralph looked around nervously in the crowded room. All the owners came to this meeting; everybody who was able to walk.

The faces looking back at him reflected just as much nervousness as his own. That was a marked difference from the AGM, where they barely had a quorum.
This meeting was about the new Reserve Fund Study, about the Board’s plan to meet future spending requirements.

I must find the strength in me, but how am I going to do this? Ralph asked himself.

This was the third Reserve Fund Study Dreamland—their condo’s development name—had. The same engineers conducted all of them.

It was acceptable to have surprises from the first study. The condo had been self-managed by volunteers so there was no professional knowledge to help run a proper maintenance program. Dreamland is an old building. Though very well built, parts started to fail; needing replacements. Other parts need maintenance.

But why did we get these surprises now? Most of these expensive issues should have been discovered by the first study. They were not.

The new financial requirements in this new study will put a tremendous burden on all. How can that be handled?

He closed his eyes for a moment, and remembered back six years ago. He was sitting then on one of the chairs at his first AGM, facing the Directors. He was a new owner then.

He heard the President’s address to the owners, and then the treasurer’s report.

They both stressed: “NO FEE INCREASES. Please recall! We never, ever, raised the condo fees one penny in the past four years.”

A thunderous applause!

Ralph recalled a later discussion with the President. That happened when he was first elected to the Board. He had been elected, because he was well liked, and because he had an accounting background. So he became the new Treasurer.

Those words, spoken by the President, echoed in him now.

“You must be very aware of two important factors here.” the President said. “The first one is that the Directors are elected by a democratic process. If the majority of the owners don’t like you, or if they won’t like what you are doing, they will vote you out. You will no longer be a director.

The second thing to remember is the mix of owners you are dealing with.

We have a small group of very young owners and a large group of very old ones. No middle aged ones. Now realize that the young ones don’t want to stay here forever. They bought a condo because it is cheaper than a house. Then they want to save money and move to a house when they are ready to start a family.

The old ones don’t have a long future here either. So neither one of these groups want to invest in the long term. They want to live as cheap as possible, NOW.

If you try to increase the condo fees, you’ll be history.”

Ralph looked up. Time to start the meeting.

“Ladies and Gentlemen.” His voice was shaking. “You see the attached Reserve Fund Study. It is full of expensive surprises. We need a new budget and we need to raise revenues. It will be a heavy burden on all of us.

We either borrow the money, increase the condo fees or have Special Assessments. Either way, we must all pay more.”

One owner sprang to his feet shouting: “Just what do you think you are doing to us? We are not made of money! The other treasurers never insulted us like this before! We won’t stand for it! No fee increases!’

An almost unison followed. “Don’t you dare!”

Then the noise of emptying the chairs. All of the owners got up and left.

What now? Ralph wondered, considering his options. A needed fee raise won’t happen. He will be removed as treasurer and his successor will be elected on a promise of no fee increases.

That would be detrimental to the building. That will be, and already is very unfair to future owners. Most of the old folks lived here for decades using the parts of the building that needs replacement. They should have paid for them as they used it. But now the new owners will pay for it.

Should he ask the board to apply for an Administrator? That would create a huge additional cost to the owners. Besides, the other directors would never agree to do this.

Should he resign and inform the city building inspectors that our condo does not meet building codes? They could get the needed work done and the city would bill the condo for it.

He did not know yet what he will do.

If the owners will be hit with costs that are too high, some will have to sell their units. Maybe they will rent the units that are now their homes.

The only one thing clear in his mind was the fact, that as a director his responsibility was to the corporation, not with pleasing the owners. But most of the owners did not understand this. How can a democratic election by the owners be reconciled with the responsibility of the directors?

Something is wrong here. Something needs changing.

He looked at the empty chairs, almost as if they were saying to him: forget about the building. Forget about repairs, forget about maintenance, forget about replacing failing parts. You can’t worry about any of those because


With a big sigh and with heavy heart Ralph picked up his papers and slowly left the room.