Q: Two years ago, we purchased a townhouse in a five-unit complex. At the time, the condo board president told us that, due to the size of the condominium corporation, we did not need a reserve fund study, and none has ever been completed. Our realtor, home inspector and mortgage company did not seem concerned by this, so we made the purchase. Since moving in, we have had significant issues. There is no money in the reserve fund and we are trying to figure out how to fix this mess. We know that there will be significant special assessments in the future and that a reserve study needs to be completed. Any advice would be appreciated.
Q: Two years ago, we purchased a townhouse in a five-unit complex. At the time, the condo board president told us that, due to the size of the condominium corporation, we did not need a reserve fund study, and none has ever been completed. Our realtor, home inspector and mortgage company did not seem concerned by this, so we made the purchase. Since moving in, we have had significant issues. There is no money in the reserve fund and we are trying to figure out how to fix this mess. We know that there will be significant special assessments in the future and that a reserve study needs to be completed. Any advice would be appreciated.
A: Your first mistake was relying on a realtor, home inspector and your mortgage company to give you what, in essence, is legal advice. Your question indicates that you sought legal advice from everyone but a lawyer. Second, the board president was wrong to tell you that the condominium corporation was not required to do a reserve fund study; the law requires every condominium corporation in Alberta, regardless of size, to have a reserve fund study done every five years. With respect to the significant issues you now face, you will need to figure out who is responsible for those repairs, either the individual owners or the condominium corporation. You should review your condominium plan to see if you can find these answers.