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.
top
contents
chapter
previous
next