In the realm of condominium management, maintaining the harmony and functionality of common elements is crucial. One significant tool in this process is the Section 98 Agreement, also known as an "alteration agreement." This formal arrangement is essential when a unit owner wants to make modifications to the common elements of a condominium. Here’s a deeper dive into what a Section 98 Agreement entails and why it’s an important aspect of condominium governance.
What is a Section 98 Agreement?
A Section 98 Agreement is a legal contract between a unit owner and the Condominium Corporation. It is required whenever a unit owner seeks to alter, add to, or otherwise modify the common elements of the condominium. Common elements can include areas like hallways, gardens, and exterior facades, which are shared by all residents and contribute to the overall aesthetics and function of the property.
Before any modifications are made, this agreement must be executed. This ensures that all parties are clear on the terms and conditions associated with the proposed changes and that the condominium's integrity is preserved.
Why Does a Section 98 Agreement Matter?
Maintaining Uniformity: One of the primary reasons for a Section 98 Agreement is to uphold the uniform appearance and structural integrity of the condominium. For instance, if a unit owner wishes to install a deck in their backyard, the Board must consider whether this addition will disrupt the visual harmony of the property. A uniform appearance helps maintain the overall appeal and value of the condominium.
Protecting Neighboring Units: Alterations can sometimes impact neighboring units. The proposed deck, for example, might encroach on a neighbor’s privacy or block their view. The Section 98 Agreement ensures that these potential issues are addressed, safeguarding the interests and comfort of all residents.
Ensuring Structural Integrity: Any modification to the common elements could affect the building’s structural integrity. For example, installing a deck may involve drilling into the building’s exterior, potentially leading to drainage problems or affecting the structural support. The agreement outlines how these concerns will be managed and mitigated.
Clarifying Financial Responsibility: Financial implications are another critical aspect. The agreement specifies who will bear the cost of maintaining and repairing the alterations. The Condominium Corporation typically does not want to assume responsibility for maintenance related to individual modifications, so clear financial terms are outlined in the agreement.
The Process and Impact
A Section 98 Agreement is registered on the title of the unit, making it a matter of public record. This means that when the unit is sold, future purchasers will be aware of the agreement and its implications. This transparency is crucial for ensuring that all parties are informed of any alterations that could affect the property’s common elements.
What happens if a change was made and a Section 98 Agreement was not in place? Is the new homeowner responsible for the repair and maintenance? The answer, all owners are! If there is no agreement and we use the deck example, if it needs to be repaired or replaced the cost would be the responsibility of the corporation.
If you are purchasing a condo unit, among other items you should be reviewing you should ask if not listed, if there are any Section 98 Agreements on file for this unit.
The take-away lesson: a Section 98 Agreement is a vital component of condominium management that helps balance individual unit owners' desires with the collective interests of the Condominium Corporation. It ensures that alterations are made responsibly, considering the impact on the property and the community as a whole. By understanding and adhering to these agreements, both unit owners and management can work together to maintain a harmonious and well-managed living environment.
Contribution by Carly Smith
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