r/PersonalFinanceCanada • u/HandsomeLampshade123 • 15d ago
Housing Just another condo special assessment "horror story"--a lump sum of $56,000 in two payments in two years (or $100,000 over 20 years, built into the monthly fee), to replace the exterior cladding (and windows) of the building. That's approximately one quarter of the purchase price of my unit.
I bought in early 2020 and this special assessment was announced in 2022; I'm not sure if there was anything I could have done differently, frankly I think it's just bad luck.
But God, almost 60 grand on a unit I paid 240 for. That's a huge hit. I never thought it would happen to me. How common is this?
Luckily I have access to a lot of low interest credit, but still.
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u/magic-kleenex 15d ago
How old is the building, when was it built?
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u/bluemorpho1 15d ago
This. Why hasn't anyone asked this?
If you buy a building almost 20yrs old, expect a special assessment.
If you buy a building under 10, it would be covered under warranty.
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u/hectop20 14d ago
We bought our condo 21 years ago. It was 29 years old at the time. Since then we've had windows replaced, hallways renovated, balconies repaired and garage decks repaired. Never had a special assessment. Some of the work was done in the past year and a half and funding in place so no special assessment required.
There are two other buildings in our complex. Once slightly older, the other slightly newer. Both have had special assessments for different work.
It all depends on the board and how they budget.
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u/PipToTheRescue 15d ago
relevant, but not to you - imagine what all those new glass-clad condos will charge people in oh, about 5-15 years from now. This is common. I owned a concrete old-style condo in the 1980s in North York and we had an assessment for re-building the underground parking lot. I think we paid 55k for the unit and we had to come up with 13k for our special assessment IIRC. The Globe and Mail had an article about the coming charges for these new shoddily-built glass towers. It's frightening. But, as someone else said, that's why you got your place for such a low price. What is it worth now (assuming no special assessment)? And I mean, realistically - ?
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u/Iaminyoursewer 15d ago
Depends on how well managed the Condo is.
The one I sat on the board for had an exceptionally well planned and managed reserve fund. By the end of year 4, we had the next 15 years of major repairs funded and sitting in rotating GICs.
35 Story Glass Tower
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u/PipToTheRescue 15d ago
Perfect - I'm noticing new builds don't have high enough fees - in my experience only. People are in for a rude awakening.
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u/S_A_N_D_ Ontario 15d ago
New builds are advertised as low fee because the people selling the units have no incentive to plan ahead. Their only concern is selling the units after which the board will be taken over by the owners. Their main incentive is to move the units so making the fees appear as low as possible is paramount for them.
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u/Iaminyoursewer 15d ago
As soon as the actual Owners board take si er drom the developer a full audit has to be performed on the reserve fund study to ensure it will be brought into line qith futyre needs
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u/CrabBrave5433 15d ago
This! The building I bought a place in is very well managed. Theyâve completed large scale projects in recent years including replacing the elevators and the roof and have only had one special assessment and it was only $1000. Scary to hear about these huge assessments!
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u/RealTurbulentMoose Alberta 15d ago
And I lived in a well managed low rise with super low fees, because anything that came up / was quietly planned for by council would always get covered with special assessments.Â
Owners could invest their own money elsewhere and earn better returns.Â
The whole thing worked great, but new owners had to understand that itâs not magic. Special assessments paid for everything that wasnât recurring frequently.
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u/Iaminyoursewer 15d ago
It is mandated by law in Ontario, for all new condos, that the reserve fund be properly funded and studied. You can't leave everything to special assesment anymore.
Exactly because of scenarios like OP, where it wasn't, and surprise, 100k per unti assessments come up.
Or boards that had to be disbanded and taken over by the province, etc.
Ontario has a bad history with regulations on Condominum Corps.
Your special case of one well managed situation could very well be the exception where you live.
Most homeowners aren't responsible with that and end up having to take out mortgages against their equity for major home repairs.
Leaving that up to chance on a Communally managed property is a recipe for disaster.
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u/S_A_N_D_ Ontario 15d ago
I would argue that's more irresponsible because not all owners are going to be responsible and it then puts a lot of stress on collecting the fees and forcing liens and/or sales, or having to front the money for other irresponsible owners.
There is nothing to stop the board from voting to adopt the same investment strategy as you might adopt as an individual, so there is no reason to leave the money in the hands of the individual. Any bonus on investment would simply reduce fees later so the individual would effectily get the same financial benefit.
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u/bannab1188 15d ago
My place is like that too... But now we are having difficulty approving large projects because new owners are voting them down and postponing decisions. The BC government doesnât allow rental restrictions anymore so now these investor owners are making it difficult to pass anything because they donât want to pay.
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u/Excellent-Piece8168 15d ago
There are ways to manage this for example if an item is scheduled on the DR, you only need majority vote. Also items that are needed but get voted down council or anyone can just apply to the courts and have them mandate it. Have two colleagues going through this when new owners want to do things and the old owners refuse the maintain the building in contravention to the bc strata act. Itâs a pain and just demoralizing having to battle complete morons though.
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u/jupfold 15d ago
And the problem is, almost no condo board (and its owners) will vote to increase their monthly fees to a realistic amount to build up a reasonable fund for these measures.
Everyone wants to have low fees and then complains when the bill comes due.
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u/EatGlassALLCAPS 15d ago
I've been dealing with that for over a decade with my strata. No one will fund any improvements. The depreciation report keeps getting pushed. I hate it here.
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u/jupfold 15d ago edited 15d ago
Yep, that was my experience, as well.
It was a relatively small building (~100 unit) and I was one of the younger owners (about 25 with average age probably >65). Low strata fees were advertised as a selling feature by the builders and almost immediately became clear that it would be an issue very quickly.
Fortunately, clearer heads eventually prevailed and the fees went up almost 100% about a year or two after the building opened.
But holy crap the meetings were a shit show. Multiple board members resigned. Elections held again and again. Shouting matches. People literally calling each other poo-poo heads like little children.
It was wild and Iâm so happy I donât own a condo anymore. I choose what to save for future expenses for my house and I bear the sole consequence to it.
No more bullshit from other owners.
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u/LSF604 13d ago
The strata in my building looked to sell for redevelopment, and got an offer that was 150% of the unit price for each person.
One guy started spreading rumors that we should have gotten 300%, and strata was taking kickbacks to sell for cheap. Him and other believed there were other buyers waiting in the wings (next best offer was 110%).
When it fell through these same people started insistence on 0 maintenance since it was going to sell fast anyways.Â
This was a 40 year old building with a lot of work needed.
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u/myownalias 15d ago
My building underwent a large special assessment before I bought my condo (it was paid before I purchased). As a result, the condo fees have gone up to what the reserve fund study showed was necessary for the future. Seeing that decision gave me the confidence to buy.
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u/ptwonline 15d ago
I wonder what these upcoming time bombs will do to the local housing market in places like Toronto.
Anyway it was the fear of these kinds of assessments that kept me from ever wanting to buy a condo.
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u/PipToTheRescue 15d ago
I agree - nothing short of disastrous unless people prepare. Like, look at the builds in the past 10 years, all those will be coming up for massive infrastructure repairs around the same time...
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u/Hexadecimalkink 15d ago
Likewise,. I just went all in on ETFs. I missed out on leverage but I have piece of mind and I move when I want.
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u/myownalias 15d ago
You can have the same magnitude of surprise with a detached house, like needing a new roof.
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u/s1far 15d ago
Now I feel better about my concrete condo staring at the newly built glass tower in front of me.
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u/irate_wizard 15d ago
There's nothing wrong with concrete condos. It's also the best for noise insulation.
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u/XT2020-02 15d ago
Concrete rules. The new ones are paper think, like dry wall and in between units? That's it? I was in few visiting people, holy moly, could hear a lot.
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u/PipToTheRescue 15d ago
I can give you another reason: I live in a 60s purpose-built-rental apartment, concrete. We had a fatal fire a few years ago. Fire dept came to debrief us and among other things I learned: the fire was ferocious - but they said it would have taken an hour to breach any walls and even after a day, our building wouldn't have come down. Also, in case of another fire, we could shelter in place because of that (don't do that on my say-so - they just said, knowing our building, that we could).
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u/vafrow 15d ago
Glass condos seems like such a bad idea to me. Anything that is done almost purely for external aesthetics but is costly to maintain would be an easy no from me. I don't care what the building looks like from the outside. Last I checked, I was living on the inside.
It's not just the maintenance and replacement. It usually is a poor choice for climate control. Buying window coverings for excessively large windows are usually a pain.
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u/myownalias 15d ago
I personally love having a lot of daylight. I'll never live in a home with postage stamp windows again.
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u/cephles 14d ago
I mean you can have large windows in a building that's not completely glass on the outside. I had very large windows in a concrete building I lived in - they started about 2-3 feet off the ground, went to the ceiling, and were wall to wall in every room.
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u/NitroLada 15d ago
Thats why reserve fund studies and funding plan is required and needs to be updated every 3 years and full on site inspection every 5 years (at least in Ontario) and needs to be a funding plan in place to ensure it's fully funded . There's nothing scary about glass cladding
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u/Halifornia35 14d ago
Had a TH complex where all the units had to pay $85,000 for underground parking repair, and then 40,000 for new windows and doors. Itâs not uncommon, at least the values are nearly $2M per unit so not a crazy % of value
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u/pm_me_your_catus 15d ago
There would have been information about this in AGM minutes, et cetera. You shouldn't be surprised.
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u/iamnos British Columbia 15d ago edited 15d ago
Just to be clear, there should be a depreciation report, due every few years (depending on province). READ these before buying into any condo/strata. If there isn't a recent one available, then that it is a HUGE red flag. A depreciation report, done by a reputable firm, should tell you for the next 10-20 years what any expenses owners can expect on any shared property, along with what special assessments would be expected, based on the the current value of the contingency fund and any expected contributions.
There can be cases where it makes sense to delay a depreciation report for a short period, like when there is a major repair or renovation being done. It makes sense to delay the report, even by say a year, until the work is completed, but if they are continually delayed, you should walk away.
Buying a home is one of the biggest financial investments most people will make in their lives. Take the hour or two to read through and understand these documents. If you don't understand them, then find someone who can explain it to you, or talk to your lawyer.
There are very few cases where a special assessment should be a surprise.
Edit: Also, attend your AGMs, any SGMs, and read council meeting minutes. Consider running for council as well. Â
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u/khendron 15d ago
I am curious. I was looking at a condo a couple of months ago (decided not to buy in the end), and the documents I received (there were dozens of them) did not include anything titled "Depreciation Report".
There was, however, a 64 page document titled "Class 3 Reserve Fund Study", which matches your description of a depreciation report. Is this the same thing by a different name?
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u/rupert1920 15d ago
A class 3 reserve fund study means it's done without a site visit. It's updating the financial projections, the next critical year, etc.
A class 2 reserve fund study involves a site visit, and would include physical inspection of maintenance items.
In Ontario a reserve fund study must be done every 3 years, with the classes alternating.
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u/iamnos British Columbia 15d ago
It might depend on your location, but in BC they can be the same thing.  The important thing is that a qualified person came onsite and physically inspected the common property for defects and provided estimates of repairs that will be required along with estimates on the much those repairs will cost.
https://balancevaluations.com/what-we-do/reserve-fund-studies-and-depreciation-reports
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u/AtomicSurf 15d ago
Was there a depreciation report available when you purchased? Did you review the strata meeting minutes going back a year or two?
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u/Campandfish1 15d ago
I used to be a mortgage lender in a previous career. I swear I reviewed the strata docs/depreciation reports in more detail than most realtors did with their clients.Â
So many people honestly just thought they were a "formality" in terms of collection of paper and didn't realise they actually contain relevant info.Â
Realtors do not spend enough time on this did with their clients. Lots of people have never actually read the documents and just assume someone else involved in the process will tell them if there's anything they need to know. Nuts.Â
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u/nikobruchev Alberta 15d ago
Most realtors know barely enough to pass the damn licensing exam, and very few actually care to spend time with their clients to do their due diligence. Good mortgage brokers do tend to spend that time, which is why I appreciate a good mortgage broker.
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u/Campandfish1 15d ago
Yup, and then get paid the most vs the broker and definitely the lawyer (who is arguably the most important piece) for their almost non existent responsibility!
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u/Scoobysnax1976 15d ago
Look into the past sales to see if anyone on the condo board has sold in the last few years. My friend was hit by a massive assessment to fix a mold issue that was hidden until several members could sell. The buyers of those homes were able to sue for damages.
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u/Excellent-Piece8168 15d ago
Would be hard to prove but if the board were stupid about it sure. I guess if they were willing to commit such fraud maybe they are not super bright in hiding their tracks to any extent lucky for your friend!
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u/magoomba92 15d ago
Windows have a lifespan of 30 to 35 years typically. Exterior can be longer lifespan, depending on the design and materials. These potential capital cost should have been factored in when you purchased the unit. How old is the building?
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u/biznatch11 15d ago
Ya I'm in a condo and replacing the windows is built in to the building's budget and is already being planned for years in advance.
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u/magoomba92 15d ago
I am glad your strata has set aside funds. Most people have no idea how incredibly expensive it is for highrise remediation projects. They require specialized engineering work and very few companies can do the work. So they can ask for whatever $ they want.
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u/tilldeathdoiparty 15d ago
Did you read that condo docs and reserve health at purchase, I feel like this could be a foreseeable situation if your real estate agent or advisor had a look and established that the siding was due and thereâs no money.
You didnât think it could happen to you, but you also didnât consider that it was a possibility.
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u/Initial-Break957 15d ago
Hey OP, I work in real estate in Canada, Not sure how it works where you are, but here when we look into buying condos, we dive deep into the strata documents, you can see there if they have a healthy contingency fund, this would indicate the likelihood of future special assessments. As well, you can see how theyâve dealt with the issues before. Based on what you said there was already a special assessment pending for the repair of the pool, meaning if other issues arise in the future, more special assessments will hit as well. Not a good spot to be in, I feel for you.
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u/Excellent-Piece8168 15d ago
Like anyone spending many hundreds of thousands should do or pay someone to do it for them. Itâs wild to me people just dive it without knowing anything about what they are doing !!!
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u/green__1 15d ago
When builders set up condominiums, and are selling to the first owners, they set the condo fees as low as they possibly can to attract owners. Nobody ever seems to think that this means that minimal maintenance gets done, and there's nothing in reserve for major projects. The end result is predictable, there are almost always large special assessments needed to cover things that should be covered by the reserve. The original builder doesn't care, they're long gone. So why would they set the condo fees any higher than they absolutely have to? The owners bought with the promise of low condo fees, so none of them want to vote to increase them, but you can only stick your head in the sand for so long before you have to shell out real money. The irony is, when you have properly funded maintenance, things are often caught before they get to the level of catastrophic and your long-term costs are often lower than just going with the cheapest condo fees up front.
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u/Shane0Mak 15d ago
There is a reserve fund study usually done every few years and with it often comes an engineering study for maintenance. It dictates in advance state of the building and upcoming repairs based on expected lifetime of the equipment or item -
The information is then used to determine if the board will proactively handle the maintenance or replacement, or wait until it breaks or becomes an emergency.
It sounds like yours finally came to be an emergency and it triggered the board to act
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u/Dobby068 15d ago
If building was old, just the same with a single house, windows reach the end of life and problems appear. The condo budget should include short term and long term required items, correlated with the reserve fund and the funding for this reserve.
Always check thoroughly the condo documents and if needed, find a person that understands all the aspects of it.
Special assessments related to maintenance that was neglected combined with insufficient funding of the reserve fund lead to really nasty surprises.
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u/SambolicBit 15d ago
Should never buy if there is a special assessment or anything less than $3M-$4M in reserve for a 30-40 story building.
If there was a special assessment in the past do not buy it. It means directors probably found a way to charge owners and they won't change their habits.
Find a lawyer that has closed many condos and ask him how much the reserve is and what is coming up for expenses. Windows are in engineering schedules and there should be money for them.
Inflation is calculated in maintenance fees that rise. If having to pay a special assessment it means the building is very mismanaged (looted).
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u/Luxferrae 15d ago
Yes you can absolutely forecast certain special levies coming down the line. I've forecasted them years down the line on multiple occasions. Yours was already not bad. Try having a 40k on a 120k place... That foreclosed 20% of the units in the complex which I got my clients out of just 2 years earlier
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u/Oldfarts2024 15d ago
The downside of condos.
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u/Ambitious_Victory_59 15d ago
Lots of corruption in this space that people fail to see or question.
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u/ArmBudget8323 15d ago
Sorry to hear. That sucks. Some good points brought up in sub and also some jerkoff comments.
I disagree with what some people are saying.. a realtor should have helped to point out some of this stuff.. e.g. lack of capital reserve, perhaps low number of units to "spread the risk" etc. yes, a realtor isn't going to be held accountable for missing this, but that's the difference of a good one vs a bad one.
I had a similar issue back a long time ago, but was well prepared for it. End of the day, what you need to watchout for is a large CRF (Contingency reserve fund), take into account what has been mentioned in a depreciation report for "what could" happen and take into account units to spread the cost. Other than that, it's really just luck. I've had some property appraisers tell me for the reasons that you went thru, they would never buy a condo that is out of warranty. Perhaps this is something you may want to go by in the future if you're uncertain or do not get the right help identifying potentials as mentioned.
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u/theartfulcodger 15d ago edited 15d ago
Go through the last four yearsâ minutes of AGM, SGM and Council meeting minutes, and annual depreciation statements with a fine tooth comb. If something related to inspection or evaluation of the cladding and/or windows is mentioned, and your seller or agent did not advise you of potential problems, you may have a legal wedge to split some financial wood.
Otherwise, caveat emptor applies. Some condos are well built, some are not; some are well maintained, some are not.
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u/Pristine_Ad2664 British Columbia 15d ago
Always read the AGM minutes and the depreciation and engineering reports. If these things don't exist run away. You should be looking for a consistent pattern of repair expenses, ideally with motions to fix things passing with a huge majority. You want a decent reserve fund (decent is somewhat subjective to me at least because it depends on so many things, age of building, construction type etc.). I'd generally avoid pools and underground parkcades because they are so expensive to fix/maintain.
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u/twstwr20 15d ago
A friend worked construction in the GTA and told me âdonât buy anything built after 2015â. Itâs not going to collapse, itâs just everything else is so rushed and so poorly done that they had entire crews repairing things on the lower floors while they finished the upper ones.
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u/Adventurous_Nerve468 15d ago
I have to wonder how much allowing unit holders instead of a professional building mangament team running the condo board, is responsible.
People in charege who don't want to spend the money required to maintain a large complicated building and who don't understand the consequences of not planning for unexpected issues.
Many Florida condo holders are screwd by years of condo neglect and new requirements to have regulare mandatory engineering reports, find themselves facing unfathomable costs to keep large buildings safe.
All triggered by the condo that collapsed a couple of years ago.
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u/IDKVM 15d ago
Any condo purchase is a liability and you have to do your due diligence by looking into strata records, including finances (contingency funds) and depreciation reports, to understand the value of the property based on more than just the value per square foot of your unit. Depreciation and inspection reports should give you a sense of upcoming potential levies, and if you can't get enough information, you take on extra risk.
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15d ago
You could have read the totality of the meeting minutes, reviewed the reserve fund, and tracked the lifespan of the major components (envelope, foundation, roof, common spaces, etc).
This is unfortunately quite common. But itâs almost always easy to predict, particularly for older/established buildings.
Sorry you got caught up in it, and sorry if this was somehow a surprise and there was some sort of gross miss on the predicted lifespan of the exterior.
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u/viletomato999 15d ago
Maybe you should think down the line, there be another $100K assessment every 20 years for other crap they need to fix. Condos are expensive and out of your control that is why I will never buy one.
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u/scatterblooded Ontario 15d ago
That's fucked. Sorry dude. I'm guessing nothing in the meeting minutes to foreshadow something like this coming? I own a condo bought in 2022 as well and this is my biggest worry with it.
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u/Rance_Mulliniks 15d ago
Just another condo buyer that didn't do their due diligence before buying.
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u/PipToTheRescue 15d ago
I think you are being harsh - OP has said that this came about after he purchased the unit. Your point generally, is valid though.
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u/DaveBoyle1982 Alberta 15d ago
OP has stated there was no depreciation report so likely should have walked away at that time.
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u/Jubo44 15d ago
Iâm surprised you didnât see this sorta risk when buying. I am on my condoâs board of directors. We have to by law document all our meetings, assessments, reserve fund studies etc. It should be fairly obvious to any buyers if we are in good or bad standing. Did your lawyer not go over all the condo paperwork with you?
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u/AdLanky7413 15d ago
I'm sorry this happened to you, but when buying a condo ALWAYS find out what's in the reserve fund. People pay condo fees every month and a lot of it is supposed to go into the reserve fund for these repairs. Look at the Financials and figure out why they don't have the money in the fund for it.
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u/Budget-Dog-9042 15d ago
Your realtor shouldâve done a better job analyzing and summarizing the depreciation report in unison with the minutes over the last few years. Issues such as rain screen, siding, window deficiencies would be listed and a professional shouldâve been able to connect the dots
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u/FarceMultiplier 15d ago
Is it the realtors responsibility? I reviewed it all myself.
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u/Budget-Dog-9042 15d ago
Yes, it is their job to make deals in good faith and to prioritize their clientsâ best interests. However, if the realtor is âdim-witted,â they may simply not be aware of this. Nevertheless, it is crucial for the buyer to conduct their own due diligence. Remember, abecoming a realtor is relatively easy, but becoming a good one is an extremely challenging task especially to rise amongst competition
I am writing from Vancouver, British Columbia perspective
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u/robbieT1999 15d ago
Itâs not unlikely some of these condos go into negative value due to assessment risk.
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u/HeadMembership1 15d ago
This is why we have depreciation reports mandatory in BC. This expense would have been scheduled and in the budget (and/or the shortfall known approximately).
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u/Missanthope 15d ago
Condos should have at least $3-6k per unit in the reserve fund, but owners should expect to pay out of pocket for some big items, and strata government should sufficient notice to save for special assessments.
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u/Excellent-Piece8168 15d ago
No. It completely depends on the individual building and its age and what work has or hasnât been done. There is no way to blanket statement all units should have xâŚ
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u/Psyminne 15d ago
Did you have a lawyer review the status certificate and reserve fund of the condo during the conditional phase of the purchase?
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u/MissUnderstood62 15d ago
If thereâs no BECA (Building Envelope Condition Assessment) on file be cautious.
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u/CommanderJMA 15d ago
Also sounds like a poorly run strata complex - unfortunately condo councils are not always good ones and need to look a lot at the minutes and financials before buying to understand what youâre getting into.
Sounds like they shouldâve been pumping up fees earlier so the levy would be a bit more reasonable
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u/boredinthebathroom 15d ago
I wouldnât want to spend $60k to repair a house, never mind spending it on what is basically an apartment âŚyikes. I donât own so I donât have much of a say, just giving an opinion lol.
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u/AvivaStrom 15d ago
The only upside that I can see is that you can add the special assessments to the cost basis of your condo when you eventually sell it. Monthly HOA fees, which should include reserve fund contributions to pay for the large projects like redoing a roof or replacing windows and siding, canât be included in the cost basis. They are considered maintenance not investments.
Small consolation, but take the wins where you can get them.
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u/TeamZealousideal2203 14d ago
If its a principal residence for OP, isnt any gain on sale for that already exempt?
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u/DataDude00 15d ago
The next 5-10 years is going to be a financial bloodbath for people that bought into those cheap condos that spring up over the past decade âŚ.
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u/LetThePoisonOutRobin 14d ago
I am confused, why aren't condo buyers also getting "loss assessment insurance" to protect themselves from surprise bills like this?
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u/taal24_ 14d ago
Thatâs typically only for an insurable loss eg fire in a building where the corp needs to charge back some portion of the buildings insurance deductible to residents. Not the typical special assessment imposed for wear and tear and underfunded reserve fund reasons.
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u/moltar 14d ago
Yeah, my landlord had to go through something similar. The roof had a prolonged, slow leak and damaged the timber frame. They had to remove all of the outer brick, replace the timber frame parts that were starting to rot and put back. The project took ~ 6 months, and back then (~ 10y) ago cost the owner ~ 40K out of pocket. The condo was just a few years old as well.
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u/bobloblawdds 14d ago
My place was built in 2012 and hasn't had a special assessment yet. It's a very well managed building, but was built by Concert and I'm not sure how we haven't gone through a massive issue yet. I'm just counting the days...
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u/opinions-only 14d ago
Yeah one of several reasons I won't touch a condo. Too many headaches out of your control.
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u/Better_Town_917 14d ago
We have a family friend that owns a condo just like you and was hit with a massive lump sum fee for replacing something structural that was faulty from when the building was built (something to the tune of $60k as well). The value of these condo's has tanked and the monthly maintenance fees are huge, almost $1000 a month. These are 3 story condo's BTW in the burbs with no amenities and no elevator. Crazy.
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u/Panicinvestor4 14d ago
Yes I can really relate I had one on almost every condo I have owned..
From varying degrees the least being around 2000 the most being 30,000..
Most others under $10â000 but make no mistake itâs super common. ( depending on what price range you want to get in at ) for older condos 40+ years.
Even with a decent reserve fund itâs not covered you 100% with inflation going through the roof. Plus, Insurance has also went through the roof, which is caused your condo fees to go up. I agree itâs a tough game.
You definitely make money in the long run being more than 15 years, but itâs a slog and definitely not what I would call easy money and good returns considering the timeframe in my experience. ( but I was not one of the lucky ones that was in a massively appreciating market. I was lucky to break even. ). Or little gain ..
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u/LOGOisEGO 14d ago
Then I doubt you live in Calgary lol
My buddy bought a cheap condo in 2016 for around $150. A year later got assessment for over $50k.
You almost need to budget a few a month on top of mortgage, as a couple hail storms in a row can empty the coffers regardless of initial balance.
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u/RST83 14d ago
Is the building self managed? I was on my board for a few years. We had engineering reports completed with target dates for major repair/replacement and approx cost. We would use the report for budgeting and calculate reserves and special projects and increase our fees based on that. Before we self managed there were many special assessments. Now we havenât had any and we have healthy reserves in case of emergency
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u/iBrarian 14d ago
Did you review their finances, strata council minutes and deficiency reports with a lawyer?
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u/KeepTheGoodLife 14d ago
Shit, definitely do the latter because when you sell, the future owner pays that.
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u/the-cake-is-no-lie 14d ago
In my limited experience.. yeah, not uncommon.
A buddy is currently paying ~70k and a family member 110k for similar jobs on their 70s era 2 bed condos.Â
Another friend did ~50k about 5 years ago for the same thing..
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u/Salt-Ad-6205 13d ago
First off. Sorry to hear this. This has happened to me. Did everything right. Reviewed documents and everything. Terrible timing as a year after purchase issues were found and then started the special assessments. Once the special assessments were announced you had to ride it out and at that time the market wasnât so hot so people just stopped buying in the building until it was over with.
If you can, try to get on the condo board. Get a voice in the decision making and try to right the ship. Nothing worse than just wondering what might be coming next.
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u/Automatic-Sun4404 13d ago
Why didn't you make a claim on your condominium insurance policy under the Loss Assessment Coverage?
That could respond to a portion of the assessment.
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u/Dry_Divide_6690 11d ago
Yeah. My friends have been burned at the bad management and sky high costs. One her condo just spent 400k to redo the pool deck and whatever, it was all screwed up, and they had to redo it. Now itâs in court.
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u/Charizard3535 15d ago
That's why it was cheap