January 2022
Sharing the cost of amenities is an effective approach to providing more services to more people at lower cost. This is most common when multiple condo buildings are built in close proximity to each other.
These buildings may share parking area, roadways, gatehouse, security and concierge services, exercise room, swimming pool and recreation spaces. A shared facility agreement remains the most effective way of determining who pays for maintaining these spaces and how they are governed. One approach to sharing expenses is to have each party pay in proportion to the number of units in a building. Another is to split all expenses equally. Problems can arise when no shared facility agreement exists or an existing agreement is not equitable.
Each party in a shared facility agreement can have different objectives. This can lead to disagreements and disputes regarding how facilities are to be managed, maintained and paid for. An agreement clarifies these matters and can minimize disputes.
Some shared facilities may have no shared facility agreement and no reserve fund. Others may have an agreement requiring unanimous agreement for decisions by all parties. Both situations may prove nearly impossible to make changes or fund maintenance of the shared space.
Where there is no agreement consider establishing one. Where a current agreement is problematic consider amending it. Avoid problems by ensuring the agreement is fair to all parties.
- Avoid any requirement for unanimous decisions. Majority votes are a better approach making it easier to get things done.
- Share of contribution to costs should be proportionate. An agreement prepared by a developer may not have established a proportionate sharing of costs between condominium corporations.
- Establish a separate reserve fund and operations account for shared facilities. Otherwise each corporation may be responsible for costs of shared facilities located on their property rather than a proportionate sharing of costs.
- Establish a shared facility committee to make decisions for shared facilities. Require that all parties be present to make quorum.
- Shared facilities need to be managed. A shared facilities manager is desirable.
- Avoid agreements where the developer or other party appoints a shared facilities manager. This, combined with unanimous decisions, can make it difficult to terminate the manager or company.
- Ensure all shared facilities are included in an agreement. If certain spaces are not included there can be disputes over the cost of maintaining them and responsibility for this cost.
