Consequences of deferring condo fees

Q: Can a condominium corporation defer condo fees due to the COVID-19 pandemic?

A: As we continue to address questions and concerns from boards, owners and managers about deferrals or forgiveness on condo fees, we must firsts understand that the condo fees (contributions) are the lifeblood of your condo.

In the opinion of New Concept Management, condominium corporations should not waive or defer the payment of condo fees. The Condominium Property Act of Alberta Section 38.1 and subject to the regulation, states that a corporation shall from funds levied under section 39(1) (a) or (b), establish and maintain an operating account to be used to provide sufficient funds for the control, management and administration of the real and personal property of the corporation, the common property and managed property and any other obligations of the corporation.

In other words, the condominium fees are vital as they go towards all the costs associated with running the condo corporation, which includes the day-to-day operations and maintenance of the condominium.

Every condominium operates under the same principal: if condo fees are not collected, condominium corporations cannot pay bills, and other third parties (such as workers) are directly impacted.

We in the condominium management industry understand that these are trying times for everyone who has been impacted by the pandemic. Each board should evaluate individual requests as they are made. Some leniency could be provided to owners who have been affected in these trying times, such as payment deferments for a period of time.

We are hearing that the government (federal and provincial) may be implementing measures to provide financial relief to the condominium industry and we are hopeful that this will come sooner then later.

To learn more about relief available to Canadians during this pandemic. Please go to Service Alberta’s website https://www.alberta.ca/covid-19-supports-for-albertans.aspx

The bottom line, though is that no one truly knows how long or what the end result of this pandemic will be or how it may affect the economy. Forgiving or deferring the paying of common expenses is a very short-term solution and can drastically affect the owners in the future.

In saying that, and in light of the world’s current, exceptional circumstances, condominium management companies will have to make every effort to work with our condo boards to thoroughly consider all options that may be available to help everyone through these challenges.