When you buy a condominium one of the things that you (or usually your representatives) look into is whether or not the condo corporation has a healthy reserve fund.
When you buy a condo unit, the vendor has to order what is referred to as an "estoppel certificate". This will outline the status of the fees for your specific unit, but it will also give you details about the reserve fund of the corporation.
Why the Reserve Fund Matters
The reserve fund is important because it is there to prevent owners of units in the condo corporation from being surprised with the costs of large repairs or upgrades to the common elements. These funds should only be used for non-routine repairs or replacements.
The reserve funds are collected as part of your condo fees that you pay each month.
Without a proper reserve fund the unit owners of the corporation can be on the hook for large lump sums to fix things like the roof, or repave the parking lot etc. This is known as a "special assessment". In Nova Scotia the condo corporation is required to obtain the consent of 2/3 of the unit owners to levy a special assessment. (Representing 66 2/3% of the ownership of the common elements) However, while this does safeguard from some surprises, some major repairs are necessary, so consent is likely, despite being very expensive.
If you have any questions about this subject, you can call us at (902) 826-3070 or email us at email@example.com to set up a meeting with one of our lawyers at our Tantallon law firm. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By: Briana C. O’Grady J.D – Associate Lawyer
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