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Embed code for: UNIT factor letter
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June 8, 2017
My name is Gail Schuller and I live in Unit 36 at Rivers Edge with my husband Ron Rutledge.
Having lived in several condo developments and being familiar with how they are run, I have been concerned about the allocation of unit factors in this development. As suggested by Bard Golightly of CDL Homes and representative on the Board, I am contacting all owners regarding this matter. The Board is aware of this letter.
In the disclosure documents we all reviewed prior to finalizing our purchase was a proposed budget and a listing of all units and their corresponding unit factor based on square footage and resulting condo fees. The Linden model was assigned 242 unit factors (x13 units), Cypress model 247 unit factors (x15 units), and Sequoia model 262 unit factors (x12 units). All developments must have a total of 10,000 unit factors.
Calculation of unit factors based on square footage is STANDARD practice for all condominiums, be they high rise, townhouse, row house or duplex. In fact, unit factors for comparable CDL adult duplex bungalows in Sherwood Park and Leduc are based on square footage. Somewhere along the line all units here were registered the same unit factor (250) without notification to prospective buyers, current or subsequent owners, or any of the sales personnel, including Karey. Until recently the real estate agent currently selling here was also not informed of the change. This is a serious misrepresentation.
Our development, like every condo development, has a significant portion of the budget related to shared expenses. However, there are budget items that are affected by size. - The premium for insurance takes into account the replacement value of each unit.
- The reserve fund is used for large capital expenditures like roof replacement, windows, etc. The larger the unit the greater the draw on the reserve fund yet, under the current system, would have made the same contribution as a smaller unit.
- The reserve fund study, required every 5 years, will need to assess and evaluate each unit type separately as size will influence projected costs. Were all units identical only one unit would need to be inspected and the total could be extrapolated.
Another important factor is the amount of a special assessment, or levy, assessed to each owner is determined by unit factors. Once the new home warranty expires the Corporation (us) is financially responsible for any failures/deficiencies. Even new builds can require a levy. In one new condo we were levied $12,000 after 5 years and $7,000 two years later. Rivers Edge has had insulation problems and many other deficiencies, including leaking patio doors and mice infestation. Who can predict future issues?
Realistically, condo fees will increase. How many of you never had an increase in house
- Wages increase so it’s likely snow removal, lawn care costs will increase; even management fees could increase.
- A reserve fund study must be done every five years and the cost then, which we will be responsible for, will likely be more than what CDL will currently pay. It’s also possible the reserve fund study, once completed, could determine we need to contribute more than the $15,000 currently allocated.
- An insurance appraisal, required every 2-3 years to insure proper coverage, could be an added cost.
- The budget line for repairs and maintenance will be affected by any increase in cost of materials/labor.
- As well, Cameron Heights Home Owners Association (HOA), which we belong to, will also face the same increases and our monthly contribution to them will increase.
As these budget costs increase condo fees WILL increase. If the unit factors aren’t based on square footage, but remain equal, smaller units will continue to pay more than their fair share and the larger units will continue to pay less than their fair share, that is, they will be subsidized by the other units. Although the difference in condo fees, if based on differing unit factors is not large now, the disparity between units will increase as the budget increases.
In summary, all expenses are NOT shared equally. Size does matter. Unit factors should be based on square footage and condo fees based on these unit factors. The Canadian Condominium Institute, Northern Chapter, indicated “otherwise some units run the risk of of being less sellable if the allocation does not seem reasonable relative to the rest of the units.”
The current allocation of unit factors and therefore condo fees could be changed if enough owners want it.
Please complete the form on the next page to have your voice heard. If your unit is co-owned you would each vote one half of the 250 unit factors currently assigned to your unit. You may have differing opinions on the matter and do not need to vote the same way. If you are the sole owner on title you would vote all 250 unit factors currently assigned to your unit.
Once tallied I will inform you of the outcome and present the findings to the Board and request any action, if warranted.
I would be happy to answer any questions or provide any clarification.
Thanks for your participation.
Gail Schuller, Unit 36
Please complete ASAP and put in the mailbox of Unit 36
I_____________________________________co-owner of unit____with 125 unit factors
Want unit factors based on square footage and condo fees based on these unit factors____
Want all units to have the same unit factor and pay the same condo fees____
I___________________________________sole owner of unit____ with 250 unit factors
king patio doors and mice infestation. Who can predict future issues?
As these budget costs increase condo fees WILL increase. If the unit factors aren’t based on square footage, but remain equal, smaller units will continue to pay more than their fair share and the larger units will continue to pay less than their fair share, that is, they will be subsidized by the other units. A