October 1, 2023 - Blog Post

Answers to questions on condo fees

I received the following questions from a member about the setting of condo fees:

1. In Nova Scotia, are there any such guidelines in terms of a minimum or maximum level of increase in condo fees which can be set by a Condo Board?  If so, where can these be found?
2. Can condo owners appeal an increase?  If so, to whom is the appeal made?  Also, would any condo fee increase be put on hold until such time as an appeal decision is made?

I replied that in my opinion the answer is no to both questions but I forwarded the questions to some of other board members to get their take and here is what they said:

"Your reply to the questions is correct - there are no limits on changes in condo fees, and no “appeal” from the board’s determination.  While there are ways that a board’s decision could be challenged, I cannot imagine a situation where it would be reasonable to challenge a fee increase.

The basic rule is that the board has the power and the duty to manage the property in the best interest of the condominium.  The board has the power and duty to determine the necessary common expenses of the condominium and set fees to recover them.  These include only operating expenses - not additions to the common elements (which need special owner authorization beyond a limit that is usually low), not capital replacements (which would be paid from the reserve fund), not reserve fund contributions (which are based on the reserve fund study).  Within the proper common expenses - insurance, energy, cleaning, etc - the board has a rather narrow scope for increase or decrease.  The operating costs will be what they are, and the board has a duty to set fees to collect those costs. 

If, however, members feel that the board has not acted in accordance with their duty, say by including an unapproved addition to the common elements and thus overcharging, or by failing to include necessary maintenance and thus undercharging, they could apply to require the board to do their duty.  They would have to show that the board was clearly over the line, if it is a matter of judgment within the board’s scope,  I am sure that no arbitrator or court would order them to change.  They might intervene if it could be shown that the board was deliberately and imprudently deferring maintenance in order to minimize fees. but it would be a technical and expensive process, almost certainly requiring lawyers on each side.  It would not just be an argument that an increase of X% is “too much” for residents.  Indeed, it would be more likely in the form of an application to force the board to increase fees in order to do something that is necessary.   That is why I say it is unlikely to ever be a practical option . If owners feel the board is recklessly wasteful or foolishly stingy, vote them out!"

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"We are not what we know but what we are willing to learn." (Mary Catherine Batson)

Michael Kennedy
CCI Nova Scotia