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
CFIA monitoring for avian flu in Canadian dairy cattle after U.S. discoveries
The Canadian Food Inspection Agency is encouraging veterinarians to keep an eye out for signs of avian influenza in dairy cattle following recent discoveries of cases of the disease in U.S. cow herds.
Mandisa, Grammy award-winning 'American Idol' alum, dead at 47
Soulful gospel artist Mandisa, a Grammy-winning singer who got her start as a contestant on 'American Idol' in 2006, has died, according to a statement on her verified social media. She was 47.
'It could be catastrophic': Woman says natural supplement contained hidden painkiller drug
A Manitoba woman thought she found a miracle natural supplement, but said a hidden ingredient wreaked havoc on her health.
DEVELOPING G7 warns of new sanctions against Iran as world reacts to apparent Israeli drone attack
Group of Seven foreign ministers warned of new sanctions against Iran on Friday for its drone and missile attack on Israel, and urged both sides to avoid an escalation of the conflict.
After hearing thousands of last words, this hospital chaplain has advice for the living
Hospital chaplain J.S. Park opens up about death, grief and hearing thousands of last words, and shares his advice for the living.
Vancouver firefighter in rehab at home after losing leg to flesh-eating infection overseas
A family trip took a frightening turn for Christopher Won when he was diagnosed with flesh-eating disease while in Hong Kong and now, after weeks of treatment overseas, the Vancouver firefighter is back home recovering.
WATCH Video shows dramatic police takedown of carjacking suspects chased through parking lot north of Toronto
Police have released video footage of a dramatic takedown of a group of teens wanted in connection with an attempted carjacking in Markham earlier this month.
WHO likely to issue wider alert on contaminated cough syrup
The World Health Organization is likely to issue a wider warning about contaminated Johnson and Johnson-made children's cough syrup found in Nigeria last week, it said in an email.
Advocacy groups speak out against domestic violence comments by Nova Scotia minister
Several Nova Scotia groups that assist women are speaking out against comments on domestic violence by Justice Minister Brad Johns, and at least one is calling for his dismissal.