Is there a maximum amount that a Homeowners Association Reserve…

Hi Lesley

Thank you for your clarification.

The Condominium Property Act governs the Homeowner's Association and all of its business dealings including management of the Reserve Fund. Nowhere in the Act does it impose a maximum amount that may be held in the Reserve Fund. There is no such provisions within the related Regulation either.

As for any repayment or share of the Reserve Funds, section 38(3) makes it clear that the Funds are an asset of the corporation and no owner is entitled and no funds can be distributed to owners unless the Corporation/Association ceases to be governed by this legislation. The only way this would happen is if the corporation was dissolved by special resolution and the condominium status of the homes no longer applied. If the corporation dissolves, the by-laws no longer apply and the owners, who have a vested interest in the remaining monies may stake claim.

Having examined the Act, the Regulation and bylaws, there is no upper limit on Reserve Fund monies with regard to condominium corporations/homeowners associations.

There are Reserve Fund maximums for other type of housing corporations, however these only pertain to government housing accommodation boards governed by the Provincial Ministry. (subsidized housing)

I have researched case law and there are no cases citing an upper limit for a reserve fund held by a private corporation or association.

Now while they are accountable to the owners and must ensure that sufficient monies exist to cover expenses, they are also accountable to ensure that the fees being assessed are reasonable under all circumstances. So if it appears that there is a surplus in the Reserve, there should properly not be any increases in fees to continue growing this fund. Now this must be managed carefully, in order to avoid a sudden expense requirement and a subsequent shortfall in the Reserve.

If the board is mismanaging, the owners do have recourse to remove board members by resolution.

I hope that this provides you with some additional insight. Please let me know if you require anything else.

Jim

As for property for which the Reserve Funds may be required, you have indicated that such property consists only of a fence. Clearly, were this the case, a minimal reserve would be required. Are there no street lights in the development? How about roads and sewers? Underground services for hydro, gas, water, phone, cable etc?

These are all common elements that may require service, repair or upgrading for which the corporation would be responsible. You should be able to obtain a list of common elements considered when the external audit was done to prepare the report for the Reserve fund.

Do you know how much of your monthly fees go towards the reserve fund and how much goes to the fund for administrative costs?

In accordance with section 44 of the Act, owners are entitled, upon written request, to be provided with details of the corporate budgets, accounts, funds etc.

Click here to see what they are obligated to produce on request.

Condos are okay for some and have their benefits, however the issue of maintenance fees can be a sore spot for some and is the most common reason why former condo owners would never do it again. This is simply a fact of life with condo ownership. Consider it another type of property tax, which you also don't see a benefit from. In the case of property taxes, they are monies which go to help run the municipality. The benefit is seen in city services such as road repair, snow removal, streetlights etc etc. In much the same way, fees go to run the condo development. So really, when you say it's unfair for an owner to pay fees and never see the benefit, you have identified yourself that it covers snow removal, lawn and garden maintenance etc. This again, is just the nature of the beast when dealing with condos.