Aging condos in Ontario will need expensive repairs in the future, report finds
About 15 per cent of Ontario households currently live in condominiums and more than half of new homes being built in the province are also condominium units.
There are 900,000 condominium units in the province that are managed by 11,000 condo corporations and some units that are more than 30 years old are starting to show their age.
A recent research report released by the Canadian Institute of Actuaries found that condo boards should be making sure there are enough reserve funds being budgeted to help pay for expensive repairs in the future.
Jon Juffs, with McIntosh Perry, an engineering firm which has expertise in reserve fund studies said that condominium boards need to make sure they have funds ready for unexpected repairs.
“A large number of condo corporations can realistically expect to suffer a special assessment because the planning horizons are so short and the decisions around the costs are driven by either deferrals or trying to get the least expensive repairs which maybe won’t last as long,” said Juffs.
A special assessment is when owners are asked for an additional payment on top of their monthly maintenance fees to cover a major expense such as replacing roofs, exterior glass walls, balconies, foundations and parking garages.
While condo owners pay maintenance fees each month to look after their building, there may not be enough money collected to cover major renovations when they are needed.
Also, compounding the issue is that many condo owners put pressure on their boards to keep monthly maintenance fees as low as possible.
"When you're not doing the proper increases you’re not saving enough money when the big bills come due," said Mark Weisleder, a real estate lawyer with the firm RealEstateLawyers.ca LLP.
Special assessments can range from a few thousand dollars to as much as $50,000. The assessments are usually divided by the number of units in a building or complex although the assessments may varying depending on the square footage of the units.
If a roof for a building is needed and the cost is $1,000,000 and there are 200 unit holders, a special assessment would be issued of $5,000 each to the 200 owners.
In the event someone refuses to pay a special assessment a lien could be placed on their unit.
While a rise in condo maintenance fees can be frustrating for owners if it is helping to top up the reserve fund that can prevent special assessments in the future.
“If a larger percentage is going into your reserve fund than people should understand that they are putting money away and that is a good thing because it means the money will be there when repairs are needed” said Weisleder.
If your building is in need of repairs now and they're deferred for too long, the situation could get worse and more expensive to fix later.
“If you are already noticing deterioration (in your building) and you are putting it off that deterioration is only going to get worse and the cost will get bigger to repair," said Juffs.
It's important when buying a condo to check it's status certificate to see the state of the building's finances and to check if there are any lawsuits or special assessments pending.
CTVNews.ca Top Stories
Walking pneumonia is surging in Canada. Is this unusual?
CTVNews.ca spoke with various medical experts to find out the latest situation with the typically mild walking pneumonia in their area and whether parents should be worried.
Joly, Blair condemn anti-NATO protest in Montreal that saw fires, smashed windows
Federal cabinet ministers condemned an anti-NATO protest in Montreal that turned violent on Friday, saying 'hatred and antisemitism' were on display, but protesters deny the claim, saying they demonstrated against the 'complicity' of NATO member countries in a war that has killed thousands of Palestinians.
Retiring? Here's how to switch from saving for your golden years to spending
The last paycheque from a decades-long career arrives next Friday and the nest egg you built during those working years will now turn into a main source of income. It can be a jarring switch from saving for retirement to spending in retirement.
Police thought this gnome looked out of place. Then they tested it for drugs
During a recent narcotics investigation, Dutch police said they found a garden gnome made of approximately two kilograms of MDMA.
'Her shoe got sucked into the escalator': Toronto family warns of potential risk of wearing Crocs
A Toronto family is speaking out after their 10-year-old daughter's Crocs got stuck in an escalator, ripping the entire toe area of the clog off.
Canada's top general takes on U.S. senator in defending womens' role in combat units
Canada's top general firmly rejected the notion of dropping women from combat roles -- a position promoted by president-elect Donald Trump's nominee for defence secretary -- at a security forum underway in Halifax on Saturday.
Ottawa driver fined for hauling thousands of empty cans in trunk of car
Ontario Provincial Police stopped an Ottawa man for dangerously hauling thousands of empty cans from the back of his car.
Canadians are craving to take a 'adult gap year.' Here's why
Canadian employees are developing an appetite for an 'adult gap year': a meaningful break later in life to refocus, refresh and indulge in something outside their daily routine, according to experts.
Jason Kelce's wife announces she is pregnant with the couple's fourth child
Former Philadelphia Eagles center Jason Kelce's wife announced Friday that she's pregnant with the couple's fourth child.