New condo corporations go through a transition period after the declarant (developer) hands over control of the corporation to an owner-elected condo board.
When this happens, the condo board has some priorities in addition to its regular duties.
This is an inspection performed by an engineer to determine if there are structural deficiencies. The performance audit is mandatory if building deficiencies are to be covered by a Tarion warranty. Identified structural deficiencies may be covered under a Tarion warranty and result in a claim for payment or repair.
Reserve Fund Study
This planning document identifies anticipated current and future cash requirements for repair and replacement of building assets. This first reserve fund study is required by end of the first year after registration and is completed by an engineer.
First Year Budget Deficit
The first year budget, upon which condo fees are based, should be compared against actual expenditures. If condo fees were unreasonably low or expenditures poorly estimated there may be a budget deficit. The Condo Act makes the “declarant” responsible for this deficit which can be recovered by the condo corporation. This requires that the declarant be informed of the deficit within 30 days of receipt of audited financial statements. The declarant then has 30 days to accept and pay the deficit. Disputes are mediated or subject to binding arbitration.
Agreements entered into by the declarant can be terminated by the condo board.