MemberJuly 25, 2022 at 11:20 am
I do understand your hesitation in funding for a surplus corporation. On paper it looks like, “Why are we paying you more?!”
The reality is that there is no way you won’t benefit from that surplus…
If it’s stagnant and held on the books forever, it’s contingent capital for repairs or emergencies.
If it’s placed into the Reserve, then it’s much the same as above.
If it’s used to purchase a small GIC investment, then the capital is not lost, and some return is being made to benefit the corporations budgeting.
If it grows to an amount the Board would like to spend on a betterment, then yes, it’s a change to the original plans and would require a Special Resolution. Whatever the project is will more than likely add value to the property and you can rest assured that the majority of owners will feel the same, either in favour or opposed.
Either way it’s used you can still pull a factor of that capital and dictate the future listing price of your unit.
The same rational is already in place with an empty or low Reserve, a fully funded Reserve, or an over funded Reserve. You take your contributed value and mark up the listing. It’s your discretion and if your corporations funding approach is low fees, minimum reserve… it’s buyer beware. If your corporation finances are in a healthy margin and you have surplus for contingency then you should be informing buyers to that advantage, and not shorting your past contributions. I’d rather owners question what we do with surplus, than the aftermath of why we didn’t budget appropriately to avoid special assessments.
Regardless of how you look at it there always could be some board members or individuals that may not be acting for the betterment of all and that is why we encourage everyone to become knowledgeable and participate within their communities and Corporations. Review the Condominium Property Act and request documents through section 44 actively, this can discourage a board that seeks to undermine owners.