Commentary by Property Manager: Shiona Niven
I’ve had the opportunity to manage both brand-new properties and buildings as old as I am… and let me tell you, that’s pretty OLD. Well, maybe not that old, but over 50 years—old enough!
Buildings, much like people, require a lot of maintenance. Those with preventative maintenance practices in place are always better off in the long run. One building I managed was built in the early 1970s. Unfortunately, it wasn’t properly maintained over the years. By the time I took over management, they had a laundry list of crucial projects. These included replacing the emergency generator, doing masonry work on the exterior, and installing a new roof—not to mention several other expensive repairs.
It’s easy to understand why a building of that age would need major repairs. As I age, I realize things don’t work as well as they did in my 20s, 30s, or even 40s. My body isn’t quite the same, and my “reserve fund” isn’t as bountiful as I’d like! I probably should have taken better care of myself growing up. This is the same issue with many buildings, regardless of their age. If they haven’t been properly cared for with preventative maintenance, repair costs can become overwhelming.
Neglecting maintenance leads to a long list of repairs that not only strain budgets but also affect the quality of life for residents. A well-maintained property is like a well-tended garden—what you invest in it pays off over time.
Let’s talk briefly about reserve fund studies and the importance of Condo Boards maintaining a healthy reserve fund.
Condominiums are required to have an up-to-date reserve fund study and must update it every three years. All owners contribute to the reserve fund, and this amount is included in the monthly condominium fees. There’s no way around this.
Owners of new buildings often don’t understand why they need to contribute to the reserve fund, especially if they plan to sell within a few years. Some even struggle with the amount required. Older buildings, like the one I mentioned earlier, often face major increases in condo fees just to make the necessary contributions to their reserve fund, especially as costs rise.
Without a strong reserve fund, a building may need to levy a special assessment to cover the cost of major repairs. I don’t know about you, but I’d much rather have a healthy operating and reserve fund than suddenly have to come up with a large sum to cover a special assessment. Educating residents about the long-term benefits of a well-funded reserve—like avoiding hefty assessments—can help them see the bigger picture.
The impact of rising costs, particularly in a post-COVID world, adds another layer of complexity. Condo boards must be transparent about how these rising costs affect fees. Regularly updating the reserve fund study ensures that all owners are aware of potential future expenses and fosters a proactive mindset within the community.
Bottom line: buildings need to be properly cared for and maintained to ensure their long-term success. Self-care is important, not just for people but for buildings too. The Condominium Authority of Ontario (CAO) has just published an excellent report on reserve fund survey findings. I encourage you to download it and give it a read—there’s plenty of valuable information inside! (Report on Reserve Fund Survey Findings (condoauthorityontario.ca)).
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