17 October, 2011
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It should always be clarified that there is a very distinct difference between fees and fines for condominiums and HOAs.
Fees are a monthly or yearly amount that are levied to cover the maintenance of the common property – the building, hallways, plumbing, heating, roof and other building envelope issues. For HOAs it may be to maintain the streets, signage, and landscaping. In both cases the levy is set out years in a budget, it is approved by the board, and the costs are shared between owners based on a formula (usually equally or based on a unit’s percentage of the square footage).
Fines are the option of the board to impose on owners that violate any of the bylaws or quasi-official rules. They are intended as a means to encourage compliance of the owners with the corporation or HOA rules.
When I talk about how important it is for Condominiums and HOAs to collect the money owe to them, and I support all legislative rules to ensure the organizations are paid what they are owed – I’m talking about the fees. It’s important that the condominium or HOA always be correctly funded as to their budget for the maintenance of the common property.
When it comes to collecting fines for by-law infractions, well, I think they can be collect at the bottom of the barrel. There are a bunch of reasons. The easiest arises from the ease that board use in levying them and the lack of any appeal or challenge to them. The board is judge, jury and executioner when it comes to applying fees. It’s a condo Star Chamber.
It’s truly sad that there are so many boards that use fines as cudgels on their neighbours, and more importantly, to make life unbearable in condominiums and HOAs. It’s especially noticeable that more and more HOAs have rules “for the board and loyal owners” and ones for “new and disliked owners”.
It’s scary – Stepford HOA scary.
11 October, 2011
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Insurance, Natural Gas, Electric, and Water/Sewage are usually the four big budget items for any condominium. Together in one condominium that I own in, that represents 48% of our operating budget (excludes contributions to reserve fund). As they are such large amounts of a budget, even small fluxuations in billing can significantly impact a condominium.
Watson Heights Condominiums in Guelph, Ontario, received a $25,603.89 bill for 21 days of excessive use. The water consumption was normal before and after, and during that time there were no repairs of leaks or burst pipes. The meter was tested and was determined accurate. The residents will have to pay for this ghost water consumption.
Kingman Acres Village Condominiums in Florida was 70 percent higher one month because of a software glitch that public works admits happened (kudos to the city for quickly identifying the issue and owning up to it – that’s admirable and should be supported).
A condominium in Sandy Springs, Ga. received a more than double bill ($16,000 vs. an average of $6,500) ghost consumption bill in early this year.
And a whole swack ( here, here, and here) of condominium complexes this year have received outrageous bills because the city metering system (1) either had been failing to bill over time – sometimes for years, or (2) when the condominium was switched to metered billing, the difference over actual consumption and assumed was back billed – again up to 5 years.
In all my searching though, I never did find a report of a city municipal water service rebating a condominium for having lower metered billing than the averaged billing. Seems payment is a one way issue.