In a recent estoppel (status) certificate prepared by the Corporation for a unit owner selling their condo, the following statement was included in that document: Item #11 of the Estoppel Certificate

The Corporation has adopted a funding plan in conformity with the recommendation in the Reserve Fund Study Report: (Yes or No)

-YES. If yes, provide the particulars of compliance:

-NO. If no, why not, or in what way, is the funding plan not consistent with the recommendation in the report? THE BOARD CHOSE NO with the following reason state below, as there was no compliance with the recommendation in the Reserve Fund Study Report.

“The Board of Directors chose to implement a cash call rather than using Reserve Funds”. Now we know why the Board has refused to permit attendance of the Reserve Fund author to attend and present their report before any meeting of residents!

So now you have it, our Board has admitted in writing that they have clearly contravened our Bylaws which REQUIRE THAT special assessments (cash calls), can only be made when common expense funds or RESERVE FUNDS will be insufficient to meet the BUDGETED COMMON EXPENSE OR RESERVE FUND EXPENDITURES.

This has been a clear obstruction of the Bylaws which requires that RESERVE FUND EXPENDITURES must first be included in budget presented to and approved by unit owners. The Board has refused to permit unit owners to approve Reserve Fund Expenditures AND AS WELL, unit owner approval of Reserve Expenditure Funding. This of course is a clear obstruction of the requirements of our Bylaws.

Cash calls have been a repeated illegal practice and clear attempt of the Board to circumvent our Bylaws which requires (along with the recommendations of our Reserve Fund Study) regular contributions within monthly fees to prepare for funding of any future RESERVE FUND EXPENDITURES. This is what responsible financial management requires! NOT IRRESPONSIBLE AND SURPRISE CASH CALLS, which are totally detrimental to unit owners for numerous reasons.

QUESTION: Would you as a unit owner when selling your unit, wish to see the statement “The Board of Directors chose to implement a cash call rather than using Reserve Funds” in your estoppel certificate? Of course not! Recent sellers have found this out the hard way, when astute purchasers demanded a much reduced purchase price with uncertainty of continuing illegitimate cash calls a primary reason! Expect up to a 20% reduction below market value for this very reason!

Speak to your financial advisor or lawyer. If they are responsible advisors, I garantee they will advise you to reject any further cash calls and demand Board adherence to our Bylaws.