January 2025
Elected condo boards volunteer their time and have authority to manage the condominium corporation. Their role is to make decisions and perform functions so every decision does not become a battle, dispute or legal situation.
Their time is primarily spent in meetings where decisions are made, or doing personal research in preparation for making decisions. Communicating with owners is not high on the list for many condo boards.
Proactive boards do understand the importance of communicating with owners and residents, and make greater effort to share information about their activities. Less proactive boards seek shortcuts to avoid sharing information. They are prone to making broad or ambiguous statements intended to deter questions, disputes, conflicts or disagreements. Rarely do these statements present an accurate description.
Here are a few of the more commonly used and misunderstood statements, and what they really mean.
“Our corporation is in a strong financial position” is soothing with no real meaning. Few condo directors understand financial statements. Most have never read the reserve fund study. It is doubtful that many know more than the current annual surplus or deficit, reserve fund account balance, and the annual increase in condo fees. This basic financial information is nowhere near sufficient to make a broad pronouncement on the corporation’s financial position.
“The annual increase in condo fees is limited to 2 percent (or some other ridiculously low increase) this year” is intended to facilitate re-election of current directors. They may rely on the consumer price index to support the fantasy. In reality, 2022 expenses likely increased at or near a rate of 18 percent. No recent period has had expense increases below five percent. Minimal or no increase in fees can only be achieved by reducing expenses even when this goes unsaid. While there are always ways to do things more efficiently or economically, it is far more common to infer savings by avoiding a conversation about where expenses are being cut and the impact on a community.
“We’re migrating to new management software, or eliminating it entirely, as a way to save money” distracts owners from real issues. It likely means they have not bothered to properly use the current system which has resulted in higher expenses elsewhere including management and security, and remaining blissfully ignorant of growing problems until they become immediate concerns necessitating greater maintenance and repair costs.
“We’re terminating the management contract (for the third, fourth or fifth time over the past ten years)” means the board continues to struggle with finding a condominium manager willing to do things their way regardless of what is proper, legal or in the interests of the community.
