To carry out its maintenance, upkeep, and administrative activities, a condominium needs cash. The sources of income for a condominium are not very diverse. This largely consists of common expenses, which include condo fees and special assessments, if applicable.
Other sources of revenue are very limited. In some cases, these may include:
In rarer situations, the following sources of revenue may also be found:
Upon reviewing these various sources of ancillary revenue, it quickly becomes clear that these revenues are limited, unsecured, and difficult to quantify. Thus, common expenses represent the central focus of the syndicate’s activities; without funds, it cannot operate. The allocation of these expenses is established by the condominium’s budgets and distributed according to the condos’ ownership shares. Depending on the situation, they are distributed among 3, 10, 25, 50, or even 600 condo units.
In the world of condominiums, sound financial management relies largely on the regular collection of common expenses. When certain co-owners fail to meet their payment obligations, the intervention of a collection agent becomes essential. But what exactly is their role, and why is it so important to pay condo fees on time?
The collection agent acts on behalf of the condominium syndicate to recover unpaid amounts. Their main responsibilities include:
The primary objective is not only to recover the amounts owed but also to maintain a healthy financial balance for the entire condominium.
When a co-owner refuses or fails to pay their fees, several remedies may be considered:
The process generally begins with sending reminders, followed by a formal demand requiring payment within a specific timeframe.
Additional fees may be applied to overdue amounts, in accordance with the declaration of co-ownership.
The syndicate may register a legal hypothec on the defaulting co-owner’s unit. This ensures payment upon the sale of the property.
As a last resort, the syndicate may take legal action to recover the amounts owed, which may include seizure or forced sale of the condo.
Condo fees are not optional. They are used to cover:
Failure to pay can have significant consequences:
The collection agent plays a key role in the financial stability of a condominium. Through their actions, they help limit the impact of late payments and protect the collective interests. For co-owners, paying their condo fees on time is not only a legal obligation but also an essential contribution to the proper functioning and value of their building.
Nellie L.
Collections Manager
In Quebec condominiums, a subtle yet troubling trend is gaining momentum: the politicization of the contingency fund.
With Bill 16, the legislature’s intent was clear: to make this tool a mechanism for long-term planning, ensuring the sustainability of buildings without imposing financial shocks on co-owners.
In practice, however, its implementation raises certain questions.
Boards of directors are elected. And as in any electoral context, financial decisions can sometimes be influenced by short-term considerations: limiting increases, postponing certain projects, easing immediate pressure.
Yet, a building does not negotiate with time.
Components age, infrastructure deteriorates, and deferred costs do not disappear—they accumulate.
What appears to be a saving today may become a significant burden tomorrow.
Added to this challenge is a more technical, yet equally critical, dimension: the assumptions used in contingency fund studies are not consistent across professionals.
Inflation, component lifespans, rates of return, and whether certain work is included or excluded: these parameters can vary from one expert to another, with significant impacts on the results.
Thus, for the same building, recommendations may differ significantly, without it always being easy for co-owners to understand the reasons why.
This variability raises questions of transparency and comparability.
It may also lead some boards of directors to favor, consciously or unconsciously, the least restrictive scenarios in the short term.
The most concerning aspect is that this new approach—where one believes oneself to be protected by studies of the contingency fund—could create a false sense of security.
Although a condominium may appear to be well-managed, it could in reality be accumulating an invisible deficit. A liability that does not always appear clearly… until the day it becomes impossible to ignore.
In this context, the issue of standardizing practices becomes central.
Many industry stakeholders believe that a framework of common assumptions could improve the clarity of studies and facilitate comparisons between buildings.
Without diminishing the role of professional judgment, such an approach would help limit discrepancies in interpretation and would allow for:
By 2028, all co-ownership syndicates in Quebec will be required to maintain a maintenance log and a contingency fund study.
This stricter requirement imposed by Bill 16 and its implementing regulations was necessary to improve the management of the assets. However, we must follow this logic through to its conclusion: the reports must be useful in guiding directors in their work and must enable potential buyers to effectively compare properties.
Hence the need for a more structured framework that proposes common assumptions and leads to a single financing scenario.
For a director, saying that an increase in condo fees is necessary is never popular, especially not with his neighbors. Planning major renovations is no more popular. However, this is precisely where the quality of governance comes into play.
Maintenance logs and contingency fund studies must serve to protect assets, and to do so, we must facilitate sound decision-making in buildings through well-conducted studies.
Without standardizing practices, Bill 16 risks creating an illusion of rigor… while allowing for new forms of underfunding.
Elise Beauchesne, CPA, Adm.A
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