Condos—fourth level of government or members-only clubs?

                             Politics in ancient city states

Fourth level of government
Many people in the condo industry state that condo corporations should be considered our fourth level of government.

At first glance, this seems to make sense as a condo is a small community, with some being the size of small towns, 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 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 equal say.

A condo is like a government in their ability to raise large amounts of money from their tax base (the owners). Like municipalities, the condos infrastructure may be neglected but the board's pet projects, such as an expensive grand lobby or huge legal bills have no trouble being fully funded.

                                 A members-only club

Private clubs
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 sell 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.

Both have AGMs and the directors are elected by the membership.

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.

Granite Club

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.

Possum Lodge

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 condo corporations are not “government,” nor their activities “government-like.” In law, therefore, a condo corporation is not like a fourth level of government at all!"

Investment club

Buying a condo unit is also like joining an investment club. You invest $200,000 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?
Every condo, like every private club, can be very different from its neighbours, so it is important for a purchaser to pick the right condo corporation to "join" and then select a suitable unit in that corporation.

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