A «bulk» compensation agreement is an agreement that includes improvements made by the owners of more than one of the units, ideally the company would try to encourage all shareholders to participate in the bulk agreement. The main motivation is cost. If the company offers unit owners the opportunity to sign up for a «bulk» compensation contract, it would significantly reduce costs and the business could even cover the costs of the contract for the owners. Therefore, it is possible to enter into an agreement under Section 98, which contemplates possible improvements that the current owner or future owner of the unit wishes to conclude or which the Board of Directors wishes to approve. There is no need for improvements. A Section 98 agreement is a valuable tool for any real estate administrator or council who wants to ensure that a common-going unit owner`s installation does not endanger the occupants of the condominium, their structural integrity or value, or that the business is subject to additional insurance costs, maintenance and/or repair obligations. A well-developed Section 98 agreement will clarify, attribute and minimize the risk. A Section 98 agreement, also known as a «compensation agreement» or «amendment agreement,» is required in all cases where a unit owner proposes to complete, modify or improve the common elements of a condominium (together the «improvement»). Condo companies must exercise caution to ensure compliance with the law. The agreement must be registered on the securities and binds the current and future owners. The Section 98 agreement will not enter into force until all of the steps described above and the agreement against ownership of the owner`s unit have been registered. This means that even if the company signed the agreement and passed all the other steps described above, if the co-ownership lawyer did not register the agreement against the ownership of the unit, the agreement is not effective and does not protect the company.
You should make sure that your lawyer has prepared the agreement and is responsible for the registration. Costs should be borne by the unit owner. Preparing, executing and registering a Section 98 agreement can be costly for a unit owner, and the unit owner is not always happy to have to pay for the change to be registered on the title and often does not understand why this needs to be done. The other option is a «bulk» or «group» agreement. In this type of agreement, several owners enter into a single agreement with the company. The main advantage of these agreements is that they allow a group of owners to share the costs of preparing and registering the agreement, so that the unit cost is significantly lower than the preparation of individual agreements for the same number of units. These agreements are also simpler for managers, as the conditions are the same for each participating owner; there are not several agreements with different conditions and obligations to remember. Many companies offer mass tariffs or flat fees for Section 98 agreements. For more information on our company`s prices, please contact us or check out our 2017 Services – Fees package.
Please share our company`s forecasts of Section 98 agreements. As a result, the typical practice of entering into «bulk» agreements was that the board of directors, sometimes in consultation with the unit owners, presented a list of acceptable possible improvements as well as actual improvements, to ensure that the agreement covers the needs and plans of each owner, as well as for the plans of each unit owner.