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Changes In Condo Maintenance Fees, Or "Special Funds"


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Back to the net, I found the following which provides partial answer to my own question.

"The Minister of the Interior shall have charge and control of the execution of this act (B.E.2522) and shall have the power to appoint Competent Official, issue Ministerial Regulations , fixes fees and expenses not exceeding the rates annexed hereto and prescribes other business for the carrying out of this act."

"Such Ministerial Regulations shall become effective upon their publication in the Government Gazette"

Elsewhere, B.E. 2522, et al are also called "Ministerial Regulations".

So, question is: What, if any, Ministerial Regulations to do with Condo Law have been made since July, 2008 - and do they clarify any further the position regarding Maintenance Fees and Special Assessments/Funds? Lots of luck with this one, methinks, as the Govt. Gazette is undoubtedly in Thai. But perhaps a lawyer specializing in Thai Condo Law is conversant?

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Ripley States:

If Maintenance Fees were not covered by Sec. 48, getting increases would not be the pain in the arse it is currently! And if Maintenance Fee increases are covered by SEc.48, then most Special Assessments are as well.

I do see in Section 48 any reference to maintenance payments or special assessments.

The Act refers to co –owner financial contributions as follows:

SECTION 40, The co-owner shall jointly contribute money to the juristic private, commonly-owned housing for operating activities of the juristic private, commonly-owned housing as follows:

(1) the expenses of the juristic private, commonly-owned housing that each unit’s co-owner is required to pay in advance;

(2) the capital funds required for the initiation of any acti­vity according to the rules or resolutionof the general meeting;

(3) other funds for performance in accordance with the resolu­tion of the general meeting under the conditions prescribed by the general meeting,

In the Regulations as per the condo where I live it states:

Administer and maintain public utilities, notify partners of bill payments in order to support expenses and to execute tax expenses.

This is simply an objective to be achieved. It’s left to the Manager /Committee to achieve.

Given that none of Section 40 Paragraphs 1 thru 3 need a 50% vote.

Unless I am missing something then increases should not be the pain in the arse .

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Chris2004:

My condo needed to raise more money for maintenance. As i understand it to increase the normal common fee at least 50% of ALL the co-owners need to agree at an AGM. As we never get that many attend this was not possible. But it seems we can charge an additional fee using only 50% of co-owners ATTENDING an EGM. This is the route we took to get an additional 5million baht of funding. Our standard common fee is fairly low at 20 baht per sq m per month

:Delight:

Increasing the basic maintenance charge does require a 50% vote.

:Delight:

Special Assessment ( and Sinking Funds) can save condos.

In relation to the condo where I live, achieving a 50% Vote to increase fees would either be impossible or at least very difficult(my opinion)

In the event it was achieved (as a Special Assessment) at an EGM with 26% of total building vote.-It raised the fee by 25% p.a. and this Assessment has a 3 year life)

The management company that was appointed, after the Condo voted to get rid of the original developer /manager, advised us of the approach.

Johnny_Aloha:

I do not agree and the Land Office in Pattaya also does not agree. Jomtien Complex Condotel at their 2010 AGM had over 35% of all co-owners votes represented and voted by 95% of those voting voteed in favor of increasing the Maintenance Fees for every co-owner. However, only about 20% of the total of all co-owners actually voted their votes on this issue and the Land Office deemed that one third of all co-owner votes were required to change the Maintenance Fees so disapproved the AGM minutes, specifically this vote.

The Thai Supreme Court before the enactment of the July 4, 2008 admendment to the Thai Condo Act did decide in the favor of a single co-owner who sued his condominium for increasing the Maintenance Fees without the required percentage of co-owner votes, however, they stated that a Special Fund for specific, non-routine maintenance kind of work, e.g. painting the entire building, could be approved by a simple majority at a second meeting but the funds approved could only be used for the specific item(s) that was voted on. Unfortunately, unknowing or unscrupulous Committees and JPMs have used these Special Funds on occasion for their own agenda leaving the spefific items approved without monies to accomplish the work. Both scenarios are being contested in numerous court cases with no new verdicts to date to my knowledge.

Delight

Section 48 of the Act makes no reference to any kind of maintenace funding.

We have been discussing little else but the difficulty of achieving Maintenance Fund increases and the usefulness as well as legality of using "Special Assessments" to achieve the same result without the hassles.

What has changed that now makes increases easy??

I think that an interpretation of the Law may make it appear to many a simple matter, but that the reality on the ground is very different indeed.

Edited by ripley
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Ripley States:

I think that an interpretation of the Law may make it appear to many a simple matter, but that the reality on the ground is very different indeed.

For certain based on the input to this post –the foregoing statement is valid

I stated earlier that a 50% vote was required to change the basic maintenance fee. This is because the management employed at the condo where I live advised me of same.

As a consequence of this post I have studied the Act in more detail.

I struggle to find any reference to this 50% requirement.

My current opinion is that Section 40 is the only section that covers the issue of contributions to maintenance funding.

For convenience I detail it as follows:

SECTION 40, The co-owner shall jointly contribute money to the juristic private, commonly-owned housing for operating activities of the juristic private, commonly-owned housing as follows:

(1) the expenses of the juristic private, commonly-owned housing that each unit’s co-owner is required to pay in advance;

(2) the capital funds required for the initiation of any acti­vity according to the rules or resolution of the general meeting;

(3) other funds for performance in accordance with the resolu­tion of the general meeting under the conditions prescribed by the general meeting.

If I am correct then I fail to see the validity of court action.

What this section does emphasize is that the co –owners are responsible for costs.

The level of the fees to match those costs is determined at a legal co –owner meeting. A simple majority vote is all that is required- because maintenance fees, and the like, do not appear as a specific topic on the list of topics that require a 50% vote (or for that matter a 25% or a 1/3 vote)

If co –owners fail to attend meetings to register their views and challenge the management then they are potentially vulnerable to the self serving actions of others .

So to summarize:

Section 14 determines the ratio of payment responsibility between the co –owners.

Section 18 states that co –owners have to pay and details penalties for those who choose not to.

Section 40 determines 1) that co –owners have to jointly pay all costs , ,2)when they have to pay and 3)the mechanism for legally establishing the fees to meet the costs.

Capital spending does require a 50% vote as detailed under Section 48 as follows:

SECTION 48, A resolution on any of the following matters shall not be less than one-half of the votes of the total number of the votes of all co-owners combined:

(1) a purchase of immoveable property or an acceptance of immovable property of binding value as common property;

(6) a construction that modifies, adds to or improves the common property;

I think that this just about covers it-but maybe not

Edited by Delight
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***Remarks: The reason for promulgating this Act is: Whereas the Condominium Act, B. E. 2522 has been in force for quite a long time and it appears that many rules and details, practically, cannot be put into force and are not adequate for use in providing protections over the people purchasing the condominium units for dwelling purpose, therefore, it is expedient to revise the provisions under this Act in order to solve the problem arising out of the law enforcements and to provide protections over the people purchasing the condominium units for dwelling purpose, with more efficiency including the expediency to reasonably adjust the rates of fees and expenses. Therefore, it is necessary to enact this Act. (Notes from B.E. 2551).

I always just skim the "Penalty" part at the end of the Act, but finally read thru the above.

I'm now inclined to agree with Delight about the intent of the Act and with his interpretation of same. I still think there will be test cases with the Land Office and the courts & the outcomes of these will be definitive.

This thread has been a very valuable learning experience. Thanks!

Edited by ripley
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  • 4 weeks later...

P.S. One area in which the law might be queried is its requirement of 1/3 total ownership vote to pass a resolution in a Second Call meeting.

How to protect oneself from unreasonable rises in Maintenance Fees and "Special Assessments"? Well, the Act calls for regular audits and full disclosure. If it can be proved that monies previously obtained by the administration have been re-routed, misspent or are unaccounted for, the matter can be raised at an AGM and also reported to the Land Office or even to the courts. I would think that, in such a case, any move for a rise or assessment could be forestalled until the previously collected funds have been accounted for.

Back on my Soap Box, I must repeat: Realistically, follow-thru on any of this requires the united effort of a bldg's co-owners. Many (most?) Co-owners have earned their reputation for indifference and non-attendance, and this one fact alone denies them of the power to prevent unreasonable rises, etc. The only solution that I can think of is for someone or some group to make the effort necessary to change their bldg's Regulations to state that all owners are required to attend - either in person or by proxy - the AGMs and Second Call Mtngs. Full participation encourages full awareness, guarantees a quorum and the necessary vote ratios. Definitely worth the effort even if it takes a few years to achieve.

Edited by ripley
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  • 10 months later...

Aha!

Check this out: To propose a Special Assessment the purpose of said assessment must be detailed. If the purpose falls under a category which can, by definition, be viewed as a maintenance project then the Special Assessment - no matter what it's called - is a maintenance expense for the owner. The Owner is paying more per square meter. Therefore, the "formula" is affected/changed which, according to Condo Law, requires a 50% vote by total ownership.

Bet one could make a good argument in court to this effect and win.

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In relation to the condo where I live, achieving a 50% Vote to increase fees would either be impossible or at least very difficult(my opinion)

In the event it was achieved (as a Special Assessment) at an EGM with 26% of total building vote.-It raised the fee by 25% p.a. and this Assessment has a 3 year life)

If at the first general meeting 50% is not achieved (usually), a second meeting only requires one-third of floor area votes to raise condo fees.

Whilst it's an effort, one third is usually do-able.

Interested to hear your three year life assessment got through though.......was it OKd by the Land Office? Can you refer me to anything that says 3 years anywhere or was that an arbitrary figure proposed in your agenda?

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I know that at one of the view talay condo's management lost also in appeal about collecting fees and disconnecting water.

It was about collecting Sinking fund after first

management left the building

I know people living there present management has not given details for the moment but they risk to refund the co- owners from this collected Sinking fund according verdict done by appeal court

All very confusing but I hope to hear more

At my place then we could be in same situation and if people ask their money back then I am scared for the maintenance for our place, we are already on low financial reserve and have big problems with the elevators

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I know that at one of the view talay condo's management lost also in appeal about collecting fees and disconnecting water.

It was about collecting Sinking fund after first

management left the building

I know people living there present management has not given details for the moment but they risk to refund the co- owners from this collected Sinking fund according verdict done by appeal court

All very confusing but I hope to hear more

At my place then we could be in same situation and if people ask their money back then I am scared for the maintenance for our place, we are already on low financial reserve and have big problems with the elevators

Wait.

Elevators (and lots of other maintenance can be squeezed into this one) count as urgent work which doesn't require a general vote it can just be ordered by the JM, advised by the committee of course. Cannot a special assessment be legally demanded for urgent work?

Edited by cheeryble
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. The only solution that I can think of is for someone or some group to make the effort necessary to change their bldg's Regulations to state that all owners are required to attend - either in person or by proxy - the AGMs and Second Call Mtngs. Full participation encourages full awareness, guarantees a quorum and the necessary vote ratios. Definitely worth the effort even if it takes a few years to achieve.

Huh?

You think owners are personally legally bound by the condo regulations?

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Yes cheeryble, the regulations have the force of law so owners are legally bound by them.

But keeping on topic,

The condo fee is in the regulations, so it does need a change in regulations to change the condo fee. With some degree of effort it is posible to get the 50% or 33.3% of owners to aprove the change - I have been around long enough to remember having to get 75% of owners voting to agree an increase and that was possible.

(PS, in the past I tried to get the regulations to say the condo fee was what was set by the AGM - but the Land Office rejected this saying the regulations must explicitly state the condo fee)

I've always had the feeling that a special assessment that is for essential matters, eg to pay the electricity bill or stop the building falling down, can be made without any discussion since, by the condo act number 4, owners must pay the running costs of the Condo.

But a special assessment to put in a 250,000 Baht fountain in the lobby would need the owners permission.

Somewhere between these two examples is a cross over point. And is the reason why management must work with the owners to ensure things run smoothly.

It always has to be remembered that the condo act contradicts itself in a number of places and has sections that almost makes a condo un-managable - so again the management must work with the owners within the framework of the act.

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Agree w/ Briley as to the spirit in which things ought to be done.

However for any system to work all parties must be vigilant and take responsibility. A Special Fund - even for a necessity - should be requested ONLY after Owners receive a full and satisfactory accounting for the CAM fees already paid in. If it can be legitimately proved that the CAM budget won't cover a necessity/urgency, then and only then should a Special Assessment be considered.

It's up to the Owners to keep themselves informed of the activities of their elected representatives, Business Office, and Thai Condo Law for any of this to work.

Well, that's my opinion anyway...

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Yes cheeryble, the regulations have the force of law so owners are legally bound by them.

.

I"m aware that's true but it seems competely out of context to demand someone's presence somewhere under Condo Law.

I thought to myself "how do you enforce that"?

Well, actually maybe you could.

Could you impose a modest fine under condo regs for non attendance or no proxy at a general meeting?

Not reaching 50 or 33% would no longer be a problem.

Problem may be getting the vote for the regs change in the first place.

Except those who would vote against are the ones who tend not to show up!

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Yes cheeryble, the regulations have the force of law so owners are legally bound by them.

.

I"m aware that's true but it seems competely out of context to demand someone's presence somewhere under Condo Law.

I thought to myself "how do you enforce that"?

Well, actually maybe you could.

Could you impose a modest fine under condo regs for non attendance or no proxy at a general meeting?

Not reaching 50 or 33% would no longer be a problem.

Problem may be getting the vote for the regs change in the first place.

Except those who would vote against are the ones who tend not to show up!

Having the force of law is one thing, enforcing them is a totally different kettle of fish.

Putting a non-enforcable clause in the regulation is a bit on the silly side - one of our owners has been dead for about 5 yearssad.png. Encouraging enough owners to participate is well worth the effort.

IF there is any need for a change.

It could be that the majority of the owners are happy with the situation and that is why they do not attend the meeting or do not support increase in common area fees and the like.

If an owner wants a change then it is up to them to get the 50% support needed - if it can not be obtained then things have to continue as they are.

Some people want to live in a luxury Condo, others are happy in a slum - or maybe that is all they can afford.

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  • 1 month later...

Yes cheeryble, the regulations have the force of law so owners are legally bound by them.

.

I"m aware that's true but it seems competely out of context to demand someone's presence somewhere under Condo Law.

I thought to myself "how do you enforce that"?

Well, actually maybe you could.

Could you impose a modest fine under condo regs for non attendance or no proxy at a general meeting?

Not reaching 50 or 33% would no longer be a problem.

Problem may be getting the vote for the regs change in the first place.

Except those who would vote against are the ones who tend not to show up!

Having the force of law is one thing, enforcing them is a totally different kettle of fish.

Putting a non-enforcable clause in the regulation is a bit on the silly side - one of our owners has been dead for about 5 yearssad.png. Encouraging enough owners to participate is well worth the effort.

IF there is any need for a change.

It could be that the majority of the owners are happy with the situation and that is why they do not attend the meeting or do not support increase in common area fees and the like.

If an owner wants a change then it is up to them to get the 50% support needed - if it can not be obtained then things have to continue as they are.

Some people want to live in a luxury Condo, others are happy in a slum - or maybe that is all they can afford.

The Thai Condominium Act Law is there for that exact purpose.

If a Juristic wishes to increase fees they must get over 50% of ALL co-owner votes.

If a Jursitic is too lazy or incompetent, they won't get a legal increase of fees enforced. The Condominium Act law is a criminal law. It overrides all other resolutions and agreements a juristuic may make. i.e. A resolution cannot be make that removes or tries to change a provisiion in the Act.

It's really very simple. If co-owners wish to increase fees, they need a majority vote of ALL co-owners. If they can't get it, there is no legal obligation for any co-owner to pay it.

If the condo is well managed and run, a reasonable increase in fees will be simple. If it is run by useless or negligent Juristics, it will be hard.

If you don't agree, go check with your local land office for an opinion. They say the same as above.

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  • 3 months later...

In relation to the condo where I live, achieving a 50% Vote to increase fees would either be impossible or at least very difficult(my opinion)

In the event it was achieved (as a Special Assessment) at an EGM with 26% of total building vote.-It raised the fee by 25% p.a. and this Assessment has a 3 year life)

If at the first general meeting 50% is not achieved (usually), a second meeting only requires one-third of floor area votes to raise condo fees.

Whilst it's an effort, one third is usually do-able.

Interested to hear your three year life assessment got through though.......was it OKd by the Land Office? Can you refer me to anything that says 3 years anywhere or was that an arbitrary figure proposed in your agenda?

Ripley's 'testing 'blog has prompted me to re read some of the other contributors to this post

Spotted a Q submitted by 'Cherybie' which was directed at my earlier post.

Cheerybie's Question:

-3 years for a Special Assessment-referenced or arbitrary?-

Answer -The 3 year figure came from the facilitator who worked from the Management company that we intended to employ.Suspect he got it from his boss -who eventually became the JPM.

For certain if that increase in fees had not been achieved -then the condo where I live would have to change. . Security(which is our 2nd largest single monthly outgoing) would probably have to go ,that plus other economies would be the order of the day.

With the benefit of hindsight, I now think that we would have got through.

Edited by Delight
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Just thought maybe you'd be interested in what eventually happened in our condo re: Special Assessments. We were robbed!

Millions of baht was collected but the owners didn't get any info on where & how much was being spent. Very few noticeable improvements. The Sinking fund was drawn from. Another special assessment was called for. When we asked "what happened to the millions you've already collected? Account for those first." we were told "It's gone." Accusations were thrown around, seems some money was stolen, but the owners have no clue to the reality.No supporting documentation has ever been produced. Now an attempt is being made to grab yet another assessment - for millions more.

Our committees seem to have discovered a simple and profitable way to run the place. Let it deteriorate, then ask for a special assessment. Usually if it's a building maintenance issue, the assessment gets passed. Any questions? Stonewall and threaten to sue or otherwise penalize those who refuse to pay. This same tactic works for ignoring the condo's regulations and just about anything else you want to do.

You can count on the lethargy and ovine nature of most owners and the fear of repercussions to anyone who speaks out.

I wish I'd rented! But you can see why I'm interested in driving a nail into the special assessments coffin.
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Just thought maybe you'd be interested in what eventually happened in our condo re: Special Assessments. We were robbed!

Millions of baht was collected but the owners didn't get any info on where & how much was being spent. Very few noticeable improvements. The Sinking fund was drawn from. Another special assessment was called for. When we asked "what happened to the millions you've already collected? Account for those first." we were told "It's gone." Accusations were thrown around, seems some money was stolen, but the owners have no clue to the reality.No supporting documentation has ever been produced. Now an attempt is being made to grab yet another assessment - for millions more.

Our committee seems to have discovered a simple and profitable way to run the place. Let it deteriorate, then ask for a special assessment. Usually if it's a building maintenance issue, the assessment gets passed. Any questions? Stonewall and threaten to sue or otherwise penalize those who refuse to pay. This same tactic works for ignoring the condo's regulations and just about anything else you want to do.

You can count on the lethargy and ovine nature of most owners and the fear of repercussions to anyone who speaks out.

I wish I'd rented! But you can see why I'm interested in driving a nail into the special assessments coffin.
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The AGM has refused to accept at least 2 audits that I know of, primarily on the grounds that they do not itemize the expenditures of the special assessments.
I think one auditor refused the job for this reason amongst others. This has been carrying on throughout the last few years and as members of the committee are changed. The thing is, there has to be dirty work at the crossroads' otherwise making a proper audit of the assessments would be a very easy and straightforward job. From day one the owners shoud have got a monthly report on expenditures and income for the assessments. The administration usually gets it together to post a report on other expenses/income once a month. But for this they don't. They won't.


Edited by ripley
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The AGM has refused to accept at least 2 audits that I know of, primarily on the grounds that they do not itemize the expenditures of the special assessments.

I think one auditor refused the job for this reason amongst others. This has been carrying on throughout the last few years and as members of the committee are changed. The thing is, there has to be dirty work at the crossroads' otherwise making a proper audit of the assessments would be a very easy and straightforward job. From day one the owners shoud have got a monthly report on expenditures and income for the assessments. The administration usually gets it together to post a report on other expenses/income once a month. But for this they don't. They won't.

Special assessments have to be agreed at a legal general meeting and typically have a short life -say 3 years. After that period they need a new vote.

In truth assessments are a way around the need to obtain a 50% vote to alter the basic fee.Its just money in the pot for day to day expenditure.

The annual balance sheet needs to be scrutinized to see where the money is going.If you are happy with this then I fail to understand your complaint.

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The AGM has refused to accept at least 2 audits that I know of, primarily on the grounds that they do not itemize the expenditures of the special assessments.

I think one auditor refused the job for this reason amongst others. This has been carrying on throughout the last few years and as members of the committee are changed. The thing is, there has to be dirty work at the crossroads' otherwise making a proper audit of the assessments would be a very easy and straightforward job. From day one the owners shoud have got a monthly report on expenditures and income for the assessments. The administration usually gets it together to post a report on other expenses/income once a month. But for this they don't. They won't.

Special assessments have to be agreed at a legal general meeting and typically have a short life -say 3 years. After that period they need a new vote.

In truth assessments are a way around the need to obtain a 50% vote to alter the basic fee.Its just money in the pot for day to day expenditure.

The annual balance sheet needs to be scrutinized to see where the money is going.If you are happy with this then I fail to understand your complaint.

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The AGM has refused to accept at least 2 audits that I know of, primarily on the grounds that they do not itemize the expenditures of the special assessments.

I think one auditor refused the job for this reason amongst others. This has been carrying on throughout the last few years and as members of the committee are changed. The thing is, there has to be dirty work at the crossroads' otherwise making a proper audit of the assessments would be a very easy and straightforward job. From day one the owners shoud have got a monthly report on expenditures and income for the assessments. The administration usually gets it together to post a report on other expenses/income once a month. But for this they don't. They won't.

Special assessments have to be agreed at a legal general meeting and typically have a short life -say 3 years. After that period they need a new vote.

In truth assessments are a way around the need to obtain a 50% vote to alter the basic fee.Its just money in the pot for day to day expenditure.

The annual balance sheet needs to be scrutinized to see where the money is going.If you are happy with this then I fail to understand your complaint.

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The AGM has refused to accept at least 2 audits that I know of, primarily on the grounds that they do not itemize the expenditures of the special assessments.

I think one auditor refused the job for this reason amongst others. This has been carrying on throughout the last few years and as members of the committee are changed. The thing is, there has to be dirty work at the crossroads' otherwise making a proper audit of the assessments would be a very easy and straightforward job. From day one the owners shoud have got a monthly report on expenditures and income for the assessments. The administration usually gets it together to post a report on other expenses/income once a month. But for this they don't. They won't.

Are you aware that publicly posting a balance sheet monthly.....which should allay cncerns.....is a legal obligation?

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The special assessments to which I refer were for specific items and work. They were not to be mixed with normal annual maintenance money and were to be reported in a separate designation for the audit.

This has been disregarded by the committee/s. Because we've never had a detailed report none of the owners know where that money went and the committees aren't talking.

What to do about that? Think about it - in the real world - how do you make somebody do a thing? I'd say either by direct force or via legal means - lawyers and attendant expenses. Even then the chances are small to nil that you''ll get your money back.
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I should mention that I live in the condo only part of each year. My AGM vote is delivered by proxy. It's only when I'm present that I discover just how bad things are. The obvious thing to me would be to report to the Land Office or other Govt. administration, and perhaps someone has done so discreetly without my knowledge. There certainly is no sign of resistance amongst the owners except the usual grumbling. I can't understand why but, in the creepy political context that exists here, I myself hesitate to act.

Edited by ripley
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The special assessments to which I refer were for specific items and work. They were not to be mixed with normal annual maintenance money and were to be reported in a separate designation for the audit.

This has been disregarded by the committee/s. Because we've never had a detailed report none of the owners know where that money went and the committees aren't talking.

What to do about that? Think about it - in the real world - how do you make somebody do a thing? I'd say either by direct force or via legal means - lawyers and attendant expenses. Even then the chances are small to nil that you''ll get your money back.

This is where things get blurred between 'Special Assessments ' and 'Sinking Funds'. The condo act has no specific detail on either that I can see. Maybe others can see that which i fail to see.

In the condo where I live the 'Special assessment' is just money in the pot for day to day expenditure. It has a 3 year life.

The 'Sinking fund' is used for condo development and larger maintenance issues such as building painting and replacement of the lift cable etc.

It has its own bank account and is separately audited.

If something along the same lines was agreed at your condo -and has been ignored -then yes, you have,in my view, a valid complaint.

Progressing that complaint to a point where you are satisfied will, I suspect, be difficult to achieve.

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