State of Affairs Post Mar 6, 2013

March 6, 2013

Information to All Homeowners regarding our State of Affairs.

There has been a petition circulated by some concerned homeowners with regard to an “Information Meeting”.

There has also been a lot of misinformation and rumors about what we are doing with the Special Assessment funds collected.

We wish to clarify our position.

Any and all homeowners are welcome to hold any kind of meeting they like with no restrictions.

If business is to be conducted (motions), it has to be sanctioned by 25% of owners with a petition calling for an official General Meeting.

Owners in arrears cannot make motions, or vote at any meeting.

The meeting that they have called appears to be that type of meeting and would therefore be called an Extraordinary Meeting of the Corporation. This is unclear at this time.

The owners would be able to have motions placed on the floor and with it being seconded, a vote would be called on the motion.

They can give direction to the board on any action they wish to take place via the motions presented and passed.

However, the board is not bound by any direction resulting from this meeting.

We are however bound by the Condominium Property Act which clearly states we must maintain our common property. The CPA also describes the responsibilities of all owners to contribute to the expenses incurred to maintain the common property.

We, the corporation, decided to call our own “information meeting” to openly discuss issues and communicate our course of action at the January 22 board of directors meeting. Early May has been discussed as a date for OUR “Information Meeting” with the owners and will be finalized once a venue has been booked. We will communicate the date, time, and place, well in advance of this meeting.

It is hoped that some of the information herein contained will illuminate our current status of affairs prior to holding this Information Meeting the board plans to hold.

Special Assessment Update

It was clear in the information provided calling for the Special Assessment the reasoning for the amounts to be collected. I will reiterate what that notice stated. We had expended approx. 110k on engineering, 54K on construction and 35K on defense costs,(All this money came from the reserve fund and depleted it to a point where we were scrambling to do long term, planned for, and needed repairs to the buildings. These repairs are and shall be accounted for separately from the litigation case and any SA required to fund work necessary due to investigations on the plaintiffs claims by reputable Engineering firms we have engaged. Therefore, approx. $200,000.00 was a recapture of funds to replenish the Reserve Fund to allow for these needed repairs to take place. (roofing, stucco to siding replacement, siding replacement))

This leaves us with approx. $513,000.00 called for in the SA to do work directly associated with the litigation case investigations completed by Engineering Companies engaged by the corporation.

To date, we have collected approx. $400,000.00 of this amount.

We have voted on and passed a motion to award a contract worth approx $295,000.00 to Emcee Construction to do the exterior work around B3-5 only.

We have asked MH to get quotes on the interior portion of B5 only so we can proceed on it once we have actual prices and the SA in the bank. Unfortunately, collection of this $112,000.00 expected cost to do the necessary work is still outstanding.

Note: Special Assessments can be called for any reason the board deems necessary and used for any deficits or capital projects necessary to operate the corporation.

Common Property Expenses from Our Bylaws

85.       Common Expenses

The common expenses of the Corporation shall, without limiting the generality of the definition thereof in Part I hereof, include the following:

a)         All levies or charges on account of electricity, water, gas and fuel services supplied to the Corporation

b)         The cost of and charges for all management fees;

c)         All costs and charges on account of landscaping maintenance for and snow removal from Common Property;

d)         All reserves for repairs and replacements of Common Property and portions of Units of buildings the repair or replacement of which is the responsibility of the Corporation;

e)         All costs of and charges for maintenance and repair of those portions of each Unit for which the Corporation is responsible;

f)         All costs of and charges for maintenance and repair of Common Property for which the Corporation is responsible;

g)         All costs of and charges for insurance for which the Corporation is responsible

h)         All cost of and charges for all manner of consultation, professional and servicing assistance required by the Corporation including without limiting the generality of the foregoing all legal and accounting fees and disbursements;

i)          The amount of all costs and expenses whatsoever including (without limitations) all maintenance and repair costs, financing charges, common expense Unit charges, and all utility charges, for or in respect of any Unit owned by the Corporation itself;

j)          Reserves for future maintenance and expenses

86.       Assessment for Common Expenses

a)         At least Thirty (30) days prior to the beginning of each calendar year, the Board or, at its request, the Manager, shall estimate the amount of the common expenses that will be incurred or required in such calendar year (including a reasonable allowance for contingencies and replacements plus any deficiencies from the previous year and less any expected income and any surplus from the fund collected in the previous year) which estimate of common expenses is herein called (estimated common expenses”.  Each year’s estimated common expenses shall be apportioned, levied and assessed to and upon the Owners in proportion to the Unit factors as shown on the Condominium Plan.  The Corporation shall be liable for the amount of any assessment against Units owned by the Corporation.  If the amounts so estimated prove inadequate for any reason, including non-payment of an Owner’s assessment, the Board may at any time and from time to time, levy a further assessment of such further assessments as are required in like proportions as hereinbefore provided.  Each Owner shall be obligated to pay any and all assessments made pursuant to this provision to the Board or the Manager to the account of the Corporation, as directed by notice, in equal monthly installments on or before the first day of each month during the calendar year for which such assessment is made or in such other reasonable manner as the Board or the Manager with the consent of the Board (as the case may be) shall designate and further to pay interest on all assessments or payments in arrears at the rate of Fifteen (15%) percent per annum calculated from the date due until payment.

b)         The omission by the Board before the expiration of any year, to fix the assessments hereunder for that or for the next year, shall not be deemed a waiver or modification in any respect of the provisions of these By-laws, or release of the Owner or Owners from their obligations to pay the assessments, or any installments thereof for that or any subsequent year, but the monthly installments fixed for the preceding year shall continue until new installments are filed.  No Owner shall exempt himself from liability for his contributions towards the common expenses by waiver of use or enjoyment of any of the Common Property or by vacating or abandoning his Unit;

c)         The Treasurer of the Board or the Manager shall keep detailed accurate records in chronological order of the receipts and expenditures affecting the Common Property, specifying and itemizing the maintenance and repair expenses of the Common Property and any other expenses incurred.  Records and vouchers authorizing the payments involved shall be available for examination by an Owner at convenient business hours on week days.

87.       Default in Payment of Assessments and Lien for Unpaid Assessments, Installments and Payments

a)         The Corporation shall and does have a lien and charge upon and against the estate or interest of the Owner for any unpaid assessment, installment or payment (including interest on arrears) due to the Corporation in respect of his Unit, which lien shall be a first, paramount lien against such estate or interest subject only to the rights and priorities of the Mortgagee under any Mortgage registered against such Unit prior to the date that the assessment, installment or payment fell due and the rights of any municipal or local authority in respect of unpaid realty taxes, assessments or levies of any kind against the Unit title or interest of such owner but subject also to the provisions of the Act, and the Land Titles Act of Alberta.  The Corporation shall have the right to file a Caveat against the Unit title or interest of such Owner in respect of the lien or charge for the amount of such unpaid assessment, installment or payment and for so often as there shall be any such unpaid assessment, installment or payment, provided that each such Caveat shall not be registered until after the expiration of Thirty (30) Days following the due date for the first payment in arrears.  As further and better security, each Owner responsible for any such unpaid assessment, installment or payment which is in arrears for more than Thirty (30) Days shall, upon demand of and at the sole option of the Corporation, give to the Corporation a Mortgage or encumbrance for the full amount thereof providing for their payment on demand with interest thereon at the rate of Fifteen (15%) percent per annum calculated from the due date of the same, and the Corporation shall be entitled to enforce its lien, charge and security and pursue such remedies as may be available to it at law or in equity, from time to time.  Nothing herein shall restrict or abrogate any rights or remedies given to the Corporation by or under the Act;

b)         Notwithstanding any other term, condition or provision herein contained or implied, each unpaid assessment, installment or payment shall be a separate, distinct and personal debt and obligation of the Owner against whom the same is assessed and collectible as such.  Any action, suit or proceeding to recover such debt or to realize on any judgement therefor shall be maintainable as a separate action suit or proceeding without foreclosing, or waiving the lien, charge or security securing the same.

The board has a policy for dealing with non or late payment of fees which the PM is to enforce.

As the reasoning for this fee was clearly stated in the call for the SA and we gave til Oct. 31, 2012 to pay, there is no reason to not enforce our policy for those who have elected not to pay or have paid late. Interest has been applied to late payments and we are now in a position to caveat those that are over 90 days. (The caveat cost is aprox $350.00 and is added to the owners account). Letters have been sent to the unit owners and their mortgage holders for all arrears. This is to inform them of our next steps to be taken to collect outstanding fees.

If those who have not paid exceed the 180 day period, legal proceedings will be initiated to foreclose on the delinquent account. These actions are not a desired response to those that cannot pay, but are necessary to gather the funds necessary to maintain the common property.

 Please see the Arrears Policy below.

Arrears Policy

(As updated and passed at the March 28, 2011 board of directors meeting.)

Condo fees, parking fees and any other charges to units are due and payable the first of every month. The board has set this policy to ensure that all owners are aware of the steps taken to ensure that accounts are kept up to date at all times.

a.       Any outstanding fees are charged interest at 15% per annum or 1 1/4% per month as per our bylaw 2 (h).

b.      The Property Manager will respond by phone to any account overdue at 15 days of the due date.

c.       The Property Manager will respond in writing with a GENTLE REMINDER letter to any account overdue at 30 days of the due date.

d.      The Property Manager will respond in writing with a DEMAND FOR PAYMENT letter to any account overdue at 45 days of the due date.

e.       The Property Manager will respond in writing with a NOTICE TO PLACE A CAVEAT letter to any account overdue at 60 days of the due date.

f.       The Property Manager will place a Caveat on the property for outstanding fees at 90 days to any account overdue of the due date subject to the direction of the board.

g.      The Property Manager will contact legal council to start foreclosure proceedings at 180 days to any account overdue of the due date. All legal costs are for the unit owner’s account as per the Condominium Property Act.

h.      The cost to place a Caveat shall be $275.00 and discharged at a cost of $90.00 and this will be charged to the delinquent account at the time the Caveat is placed.

i.        The Property Manager will promptly remove the Caveat when the account is brought up to date.

Reserve Fund Side:

We have refurbished the Reserve Fund and have awarded contracts funded by it to get the roofing done, and stucco to siding replacement, completed this year to a value of approx $203,000.00

Work on both of these is scheduled for Feb, March (worst case April) to complete.

These 2 projects have been scheduled for at least the last 5 years since the 2007 Reserve Fund Plan was updated. We have Morrison Hershfield doing design work and inspecting construction to ensure all work is done to building codes and completed professionally due to the costs of these projects. This protects us from inferior work and or products.

We have encountered previously hidden problems with the substrate beneath the stucco as well as rotten structural members in the walls and decking supports and surfaces. To date we have been advised of cost increases alone to a tune of aprox. $78,500.00. Materials and other costs are to be added to this, as will Engineering costs.

We cannot stop the work in process and or overlook problems uncovered during refurbishment work. Again, this is being funded by our current, refurbished, reserve fund.

The items identified as being in need of repairs and or replacements in all our Engineering investigations for the litigation before us will be added to the Reserve Fund Plan and accounted for accordingly.

We still do not have some of the pricing needed to firm up the overall costs to us for all elements identified.

The board is putting together an update on the Reserve Fund Plan and it is expected to be circulated to owners at the information meeting.

As we incur extra costs for repairs, we will endeavor to plan for these costs over  number of years to reduce the chance for future Special Assessments. However, it will not eliminate the possibility of them.

Litigation Side:

No work is being done on the crawl spaces at this time. We will be starting the weeping tile and site re-grading as soon as the weather permits excavations.

Emcee Construction advise they will start April, finish in June for the Litigation side for $298,000.00.

We will not be in a position to do the interior of B5 until the whole $713,000.00 called for in the SA is collected.

It was hoped that everyone would pay the SA promptly which has not happened.

Your board is available to answer any questions you may have on the contents of this Update.

Respectfully

Grant McCargar

President, 2012-13 Board of Directors