Sifting your way through condominium jargon and legal mumbo jumbo can be difficult and confusing. There are so many new terms referenced it can make your head swim keeping them straight.
To avoid feeling small when you don't know what anyone's talking about, we've built a go-to dictionary for you to reference in times of need!
Dictionary of Condominium Terminology
Allocation of Costs- Allocation of costs is when condominium expenses are divided among the condominium owners. Costs are typically divided according to unit factors or percentage ownership. They're collected in the form of monthly contributions.
Amenities- Amenities are parts of a condominium that entice individuals to live there (i.e.,) swimming pool, gym, etc. These features add value to the building but have maintenance costs which unit owners pay for as part of their condominium contributions.
Board of Directors- A Board of Directors manages the corporation on behalf of the condominium owners. These directors are elected at the annual general meeting (AGM). The Board enforces bylaws and oversees the corporation's finances.
Bylaws- Bylaws are rules that the condo community (owners, tenants, and visitors) must follow. If bylaws aren't followed, owners may be subject to fines. Owners can change bylaws with a majority vote.
Related: Understanding Condominium Bylaws
Condominium Contributions- Condominium contributions cover the cost of maintaining the common property in the building. Contributions are based on the funds required laid out in the annual operating budget. This total is then divided among owners according to their percentage of ownership. Contributions are collected monthly and are commonly referred to as condo fees.
Condominium Manager- This person is hired by the Board to take care of the day-to-day operations of the condo. They are in charge of collecting rent, taking care of maintenance issues, and finding tenants/owners.
Fiscal Year- A fiscal year is a financial year for a corporation. It doesn't necessarily end the same time as a calendar year. A corporation's financial statements must be prepared before the end of a fiscal year to show the financial activity that has taken place.
Improvements and Betterments- These are renovations, additions, or upgrades made to a unit by an owner. Condo bylaws may prohibit specific renovations or upgrades.
Liability Insurance- Liability insurance can be purchased by the corporation or a condo owner for protection in the instance where someone gets hurts on their property. This insurance would cover the cost of defending oneself in a lawsuit.
Mediation- Mediation is a formal process used to resolve disputes between unit owners or the Board of Directors. A professional mediator is present throughout the process.
Motion- A motion is a proposed action on an issue. It's raised and voted on in meetings. Individuals present at meetings vote on a motion, and if majority rules, the motion is passed.
Professional Fees- Professional fees are paid to lawyers, reserve study experts, accountants, and other professionals. These fees are often found in the operating budget and assist the Board of Directors in carrying out their responsibilities.
Property Management Company- A property management company can be hired by the corporation to handle the maintenance, daily operations, and other services. The Board would still handle the overall responsibility of the corporation.
Reserve Fund- A reserve fund has money saved for large expenses and maintenance problems such as replacing the roof or furnace. Money is collected for the fund from unit owners as part of their condo contributions.
These are some terms you will find helpful once you become a condominium owner or Board of Director. Enjoy your quick reference guide to condo terminology!