Condo boards have a language all on their own! From bylaws to maintenance to new condo owners – each condo meeting is filled with terms that all board members should be familiar with.
So, let’s go back to basics and break down those commonly tossed around terms. Next condo meeting, you’ll speak up with confidence; no more condo corporation faux pas, no more glossing over important condo terminology in the middle of a board meeting. This is Condo Terms 101, and class is officially in session.
Operational and Financial Terms
In order to know how to properly run a board, it’s important to have a firm, solid grasp on all the terminology that will be thrown about during meetings – and if you’ve ever been to a condo corporation meeting, you’re well aware what a ridiculous amount of jargon gets thrown around. Just keep this glossary of terms pulled up on your phone during your next AGM and you’ll be in good shape.
- Condo Board: This one’s easy. Interchangeable with the term “Board of Directors,” your building’s condo board is essentially the governing body that works to represent and push forward the community’s best interests. Typical roles include President, Vice President, Treasurer, Secretary, and a smattering of Board Directors. If you want to make an impact on your condo community, start by joining your building’s condo board.
- Special Assessment: Two words dreaded by condo owners everywhere. If your condo community finds itself faced with unexpected costs that it must find funds for immediately (think critical building hardware failure or something along those lines), it will sometimes invoke a special assessment to secure the cash it needs. This involves the collection of funds from condo owners above and beyond normal monthly contributions and is rarely a popular move (for obvious reasons).
- Reserve Fund Study: In order to properly plan for the future, condo boards will conduct a reserve fund study in order to get an idea of what sorts of investments the building and community will need over the coming years and to plot a financial course accordingly – detailing not only what monies need to be made available, but what sorts of maintenance and upkeep need to take place, as well.
- Regular V. Audited Financials: Regular financials are those that your condo management company produces on a monthly basis; audited financials are those reports that have gone through to a third party for review. Essentially, audited financials act as a report card for your condo management company and speak to the quality of their number-crunching abilities, giving you a bit of extra peace-of-mind that things are being handled the way they should be.
- Profit/Loss: Just like it sounds – a quick overview detailing whether your condo corporation is sitting in the red or the black with relation to your building’s budget.
Legal and Insurance Terms
Now that you’ve got those general operational terms down-pat, we can dig into the nitty-gritty of condo legal terms. Sound like fun? We thought so, too.
- Caveat: This is definitely something you don’t want to see coming your way. Essentially, a caveat is a legal document that gets registered against an owner’s title if they owe money for things like condo fees or chargebacks but have refused to pay. What’s a chargeback? We’re glad you asked.
- Chargeback: This is a fee that is levied against a unit owner, generally resulting from things like repair costs to common property that was damaged explicitly due to the actions or negligence of that specific individual. Again, not a particularly great thing to have come your way.
- Director and Officers Insurance: This is a unique sort of insurance coverage that keeps directors and officers protected from legal action as a result of decisions they might make during their tenure on their building’s condo board. An absolute must-have for all boards to protect their members!
Almost done! Before we wrap up, we want to go through a few quick terms and definitions associated with condo boards themselves.
- AGM: Or, Annual General Meeting. This is a once-yearly meeting when a condo’s board of directors will report to owners on management and financial matters. During this time, non-board members are able to speak up on issues that they want to draw attention to. Board elections often take place during AGM’s as well.
- Governing Documents: Also referred to as CC&R’s (that’s Conditions, Covenants, and Restrictions – not Creedence, Clearwater, and Revival!), this set of documents essentially gives the condo board its power and lays out plainly where the board’s authority and jurisdiction starts and ends. These documents cannot be changed by the board alone – that process is usually detailed within the CC&R’s themselves and generally involves a building-wide vote with a large majority approval for any amendments to be affected. Definitely a document worth getting to know, especially for board members.
- Bylaws: Legally, all condo corporations in Alberta are required to maintain and adhere to a set of bylaws. These regulations cover everything from renovation guidelines and parking restrictions to what sorts of pets are allowed in the building. It’s in an owner’s best interest to become intimately familiar with them.
That’s definitely a lot of information to absorb, but hopefully, most of the terminology above was nothing more than a quick refresher. Be sure to take a minute to bookmark this page on your phone or tablet – that way, it’s right there for you to quickly refer to next time you need to quickly remind yourself, “What exactly is a caveat, again?”
To learn more about the terms we covered today – or to pick our brains on any other condo terminology that we didn’t have a chance to get to explore – feel free to reach out to us at Edmonton condo management companies. We pride ourselves on our condo management expertise and are always happy to take a moment to educate owners on the info and key terminology that matters to them. Until then – class dismissed!