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
BREAKING Israel attacks Iran, Reuters sources say; drones reported over Isfahan
Israel has attacked Iran, three people familiar with the matter told Reuters, as Iranian state media reported early on Friday that its forces had destroyed drones, days after Iran launched a retaliatory drone strike on Israel.
American millionaire Jonathan Lehrer denied bail after being charged with killing Canadian couple
American millionaire Jonathan Lehrer, one of two men charged in the killings of a Canadian couple in Dominica, has been denied bail.
Nearly half of China's major cities are sinking, researchers say
Nearly half of China's major cities are suffering 'moderate to severe' levels of subsidence, putting millions at risk of flooding especially as sea levels rise.
Prince Harry formally confirms he is now a U.S. resident
Prince Harry, the son of King Charles III and fifth in line to the British throne, has formally confirmed he is now a U.S. resident.
Judge says 'no evidence fully supports' murder case against Umar Zameer as jury starts deliberations
The judge presiding over the trial of a man accused of fatally running over a Toronto police officer is telling jurors the possible verdicts they may reach based on the evidence in the case.
Health Canada to change sperm donor screening rules for men who have sex with men
Health Canada will change its longstanding policy restricting gay and bisexual men from donating to sperm banks in Canada, CTV News has learned. The federal health agency has adopted a revised directive removing the ban on gay, bisexual and other men who have sex with men, effective May 8.
Colin Jost names one celebrity who is great at hosting 'Saturday Night Live'
Colin Jost, who co-anchors Saturday Night Live's 'Weekend Update,' revealed who he thinks is one of the best hosts on the show.
Sports columnist apologizes for 'oafish' comments directed at Caitlin Clark. The controversy isn't over
A male columnist has apologized for a cringeworthy moment during former University of Iowa superstar and college basketball's highest scorer Caitlin Clark's first news conference as an Indiana Fever player.
'Shopaholic' author Sophie Kinsella reveals brain cancer diagnosis
Sophie Kinsella, the best-selling author behind the 'Shopaholic' book series, has revealed that she is receiving treatment for brain cancer.