Arrears “When you call your children and you say 'How are you?'—and what you are really asking is, 'Do you still have your job? And are you able to make the mortgage payment?' ” —Sharron Angle The condo corporation needs its budgeted cash flow to keep itself running smoothly. The common element fees is to a condo corporation what your blood pumping through your veins is to your body, the the steady flow of nutrients that keeps the body alive.

It is crucial that the board deals with any unit owner, who is in arrears, promptly and efficiently. Yet there are boards that ignore owners being in arrears.

Owners in arrears
I was at an AGM at a condo in northern Etobicoke that did not have audited financial statements for the previous two years. The owners didn't have a clue what was the corporation's financial health as the board did not even distribute unaudited statements.

Yet, during registration, over 20% of all the owners were refused a ballot or had their proxies rejected because they were in arrears. Even more shocking, while making his report, the president said that there were eight to nine owners who were over two years in arrears and the board was planning to start taking action to collect the delinquent fees.

Well, aren't they on the ball!

At another condo, the audited financial statements showed that $230,000 was in arrears. So how did the condo get by? The board starved the reserves, cut maintenance to less than the minimum required to keep the building from falling apart and failing to keep up with the monthly utility bills.

It was not without good reason that the Act gives Ontario's condo corporations great powers to collect fees when the owners go into arrears. When a board shies from using those powers, the corporation gets into deep financial trouble and the property values start to collapse.

A board that ignores units that are in arrears is a board that needs to be kicked out of office.

top   contents   chapter   previous   next