Definitions Guide

Our condominium document reporting will include a number of terms and phrases unique to the condominium industry. Find something you’re unfamiliar with, or just need a primer? We’ve got your back! Please see below for a list of the more common phrases, and reach out to us any-time if you need help with something more specific.

Parties & Roles

Board of Directors

The Board of Directors are the elected governing body of the condominium corporation, tasked with decision making and stewardship of the property. Members of the Board have a fiduciary obligation to make decisions in the best interest of the condominium as a whole, and they do so via majority votes. It is the Board that approves and sets a Budget, determines all rules and policies within a condominium, selects and authorizes contracts and professionals, oversees committees, and generally determines the course of the Condominium throughout their elected term.

Manager

Most condominiums will hire an expert firm qualified, trained and licensed to work in Condominiums. These condominium management firms offer advise and expertise on all facets of a condominium, including day-to-day operations, budgeting, contract review, accounting, maintenance, etc. A condominium manager is a licensed consultant, whose role is to support, liaise and educate all parties in navigating their property, and to assist the Board in addressing requests or follow-up with their selected trades/professionals. Outside of emergencies and very specific situations, managers have no governing or decision making powers.

Owners

Owning in a condominium is a unique type of investment. It includes ownership of your home, as titled property, but also a responsibility to the condominium corporation as part of a shared common investment. Each Owner is assigned a Unit Factor, and this is used to determine the share of the expenses owed to the condominium. Owners have a shared responsibility to the condominium.

Meetings & Events

Board Meetings

An elected Board of Directors will meet as needed to review, discuss and make decisions on matters impacting the condominium corporation. This may include planning capital projects, reviewing and signing new contracts, discussing reported bylaw infractions, making decisions impacting committee projects, approving a new fiscal Budget, and addressing requests from Owners. There is no set requirement for how often a Board of Directors should meet, our suggestion would be a minimum of once every fiscal quarter.

Annual General Meeting

An AGM is held once each calendar year, within not more than 15 months of the previous meeting. The purpose of an AGM includes:

An avenue for the Board of Directors to update Owners on the happenings in the previous term.
to inform Owners of plans for the upcoming term.
to report on the financials of the condominium, including approval of appointment of an auditor.
for the Board of Directors ending their term to resign, and to open to the floor for nominations for new or returning members to join.
for the Owners to revisit old business or present new business for discussion and review through the upcoming term.

Special General Meeting

An SGM can be called by the Board at their discretion, or by the Owners with sufficient written support (determined by the Bylaws, or from Legislation) from the Ownership to request one. The purpose of an SGM is to address a specific topic or motion presented for discussion, this usually includes a specific motion or direction to the Board for a particular action or to address a concern that has arisen between AGMs.

Town Hall

A town hall is an event held to discuss one or more specific topics, usually as an educational forum, but without any formal motions or decisions being made. Town halls are typically held to discuss an important project or matter impacting a Condominium, such as a Special Levy, and to allow the Board, and any of their consultants or agents, to hear from and answer questions from the Ownership.

Finances & Budgets

Annual Budget

Each fiscal year, the Board of Directors will review and approve a budget for the upcoming term. The intention of this budget is to set out a list of all planned expenses for the upcoming year. A good budget will consider the actual costs incurred over the previous terms, adjustments to variable market costs (insurance, utilities, etc.), active or pending projects, and the needs of the capital reserve fund.

Reserve Fund

The reserve fund is a capital expense account, similar to a long-term savings account. The reserve is used to fund large scope capital projects, such as roofing or siding replacement, replacement of mechanical components, and the like. The value of the reserve fund is, in part, based on an independent reserve fund study. This is prepared by a qualified independent party within the first two (2) years of a condominium, and every five (5) years thereafter, and helps the Board to plan and save for large ticket future expenses.

Operating Fund

A condominiums operating fund can be considered similar to a day-to-day chequing account. This fund is used for common expenses such as contracts, general repairs and maintenance, preventative maintenance, insurance and utilities, and similar. A full list of each planned operating expense, and their respective values, can be found in the Budget.

Corporate Documents

Reserve Fund Study (RFS)

A reserve fund study is a document, prepared for the condominium by a qualified independent firm (such as an architect, building scientist, or engineer) and is designed to consider:

all capital components of a condominium.
the life expectancy of those components.
the expected market costs to replace those components when they reach or exceed their expected lifespan.

A reserve fund study considers each of these components over a 25yr term, and is revised every five (5) years. This document will include suggested annual contributions for each year, and is used as a reference when determining the annual budget.

Bylaws

Are a legally binding set of rules and policies used to define the obligations of all parties within the condominium. This includes (but is not limited to) who is eligible for the Board of Directors, when and how to call events, duties of the corporation, duties of the owners, use and occupancy restrictions, and the nature of the function of the corporation. A set of bylaws are provided by the Act, however many condominiums will have their own set of drafted bylaws that are particular and specific to the needs of that property. Bylaws are binding, and act as contract between the Condominium and the Owners.

Condominium Plan

a condominium plan is a document registered at the conception of a condominium, and which is designed to clearly outline the boundary of the condominium, each titled unit, storage locker and parking stall, all common property, and any easements. The condo plan is the document that defines the unit factor assigned to every legal unit, and which assigns and identifies their assigned unit factors.

Disclosure Documents

A disclosure document is prepared by the Condominium, or their agents, and outlines a number of important details regarding the property. This includes but may not be limited to a list of any legal actions commenced against the property, known structural defects, any active special levies, and similar. This is commonly reviewed by the purchaser when considering investing into a condominium.

Estoppels Certificate

An estoppels certificate is most commonly ordered by a purchaser as part of the sale process of a condominium. This document will confirm whether the account in question is up to date, including the details of any arrears balances owing or actively pending. This is an integral part of the purchase process as it ensures new owners are not buying into a known debt.

Common Definitions

Civil/Municipal Unit#

This is the visible number on a unit door or suite, and is used in the mailing address for the property. This is the most common way to reference a suite, however the number may differ from the Legal Unit#. It is important Owners are aware of both this number, and their legal Unit#.

Common Property

Common property, or shared property, is the areas of a condominium plan that do not belong to a single unit, but are shared by the Ownership. This can include greenspaces, walking areas, laneways, hallways, common rooms, amenity spaces, and the like. These areas are maintained and repaired as part of the budget.

Condominium Contributions (fees)

Unit Factor

Each legal unit is assigned a unit factor, which determines the share of the property each owner purchases. Unit factors are assigned to every legal unit, and (depending on the condominium) may also be assigned to parking stalls and storage lockers. The total unit factor for a condominium is 10,000, and the value is used by the Condominium to calculate what share of the budget contributions or special levy an individual owner must pay.

Insurance Certificate

A document that outlines the individual deductible value assigned to all loss types insured by the condominium. This will offer an at a glance review of what portion of costs the condominium will pay for in the event of an insured loss. Depending on the circumstance, some deductible costs may be considered chargeable to the unit owner, so it is very important each owner provide a copy of their insurance certificate to their personal insurer whenever it is updated – to ensure they are properly covered.

Legal Unit#

This is the number assigned to a legal unit, parking stall or storage locker in the Condominium plan. This number is used on your land title, and to help determine your assigned unit factor. It is not uncommon for the legal unit# to differ from the civic/municipal unit#.

Condominium Corporation

A condominium is it’s own unique style of not-for-profit organization, governed by it’s own legislation, regulations and bylaws. Each condominium is it’s own unique entity, and purchasing into a condominium means investing into the maintenance and well being of that corporation.

Special Levy

Also known as a special assessment, or a cash call. These events are determined by the Board of Directors, as needed and at their discretion as needed, to cover: sudden or unexpected losses not covered within the scope of the budget or reserve fund. This can include costs to repair a sudden loss, to recoup a deficit in the budget, or to address a planned and approved betterment outside of the scope of the current funding. A special levy is a binding requirement, and will include details outlining the reason for the levy, the total costs required, the individual values payable by each unit, and a deadline for payment.