subject: Condominiums: Discussing By-laws, Reserve Funds, Condo-documents [print this page] Lets examine some of the more common questions buyers have about condos in general:
What do Condo-Fees pay for?
All condominiums have different arrangements. With some, your condo fee just pays for the very basic services, such as snow-clearing, lawn maintenance, management fees and common-element insurance. With other condominiums, the condo-fees might include water, cable-vision packages, heat and an on-site caretaker.
What are 'common-elements'? Basically it is any area where all owners have access. In an apartment style condominium, that would include the entrance and the hallways, as an example. In townhouse, or bungalow styles, it would be the roadway and the visitor parking lot. The 'common-element insurance' basically protects the owners from any lawsuits and insurance claims by visiting guests, whether invited or uninvited, but that is a subject all to itself.
What is a Reserve Fund? Each month, a small portion of the condo-fee goes into a special savings account, called a "Reserve Fund". Again depending on the type of condo we are looking at, this reserve fund might pay for any building renovations such as a new roof, new windows, painting and re-carpeting of hallways, etc. Basically the renovation and repairs of areas which are common to all owners, and which effect all owners. So for example, if you own a stand-alone bungalow condo, you might be responsible for your own roof repairs, new windows etc etc.
About Condo By-laws: When a condo-project is first built, the builder usually sets up a set of 'by-laws', which will rule the use and rights of the individual owners. The initial set of by-laws are quite often very rudimentary, such as "No Laundry to be hung from windows" in an apartment style condo. Bungalow condos might have a rule that states "No Outbuildings to be erected".
As owners settle into the condominiums, they will establish their own board, and can then write their own by-laws. In order to change a current law, or to create a new one, the owners need to approve such changes by a 75% margin. In short, majority rules.
