Can a Seller Get Refund of Prepaid Common Expenses?

If a unit owner sells a unit before the end of the condominium corporation’s fiscal year, the owner cannot obtain a refund for any prepaid common expenses but should provide for adjustments for prepaid expenses in the purchase or sale agreement. Monthly maintenance fee covers the upkeep and replacement of common elements — whether you use them or not. The fees may also cover the corporation’s insurance policies, utilities and services such as snow removal. Part of those monthly fees may be put into a reserve fund to cover the estimated cost of future maintenance and repairs.Required by law in some provinces and territories, a reserve fund study is often used to tell condo owners how much money should be paid into the reserve fund. Conducted by an engineer or other professional, it involves a detailed examination of all components, an analysis of when repair and replacement are expected, and an estimate of these costs. Condominium fees may have to be adjusted from time to time to reflect the changing costs of goods and services and the state of the building’s reserve fund. Look for these adjustments in the next year’s budget. Don’t expect a refund if the board overestimates the common expenses. Refunds are not commonly given to unit owners. Instead, surpluses are typically either applied to future common expenses or paid into the reserve fund.