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How much are condo strata fees?


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#21 sebberry

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Posted 31 December 2013 - 10:22 AM

Stratas can't just spend the money in the contingency fund willy-nilly.  There has to be approval from the majority of the owners.  Fortunately we anticipated the difficulty with obtaining quick access to funds in the event of an unexpected situation and set aside $x,000 for emergency repairs.  This separate fund didn't require a vote from the owners to access. 

 

Sure enough, our garage door opener kicked the bucket (4 years sooner than predicted by our depreciation report) and we had some significant sewage blockages that needed cleaning because previous councils hadn't bothered to do the required routine cleaning.

 

Similar to the roof story I just posted, we still have a couple of owners crying about us spending too much money on these (necessary) repairs.  Would they have coughed up the dough if we were relying on special assessments?  Would they have cared if the sinks backed up and caused damage to suites? 

 

Sure, as an owner I'd rather save the money up myself and not trust it to the council.  As a council member I see the need for quick access to funds for large repairs. 

 

The depreciation report helps owners to plan for major repairs, but it doesn't force them to save. 


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#22 MarkoJ

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Posted 31 December 2013 - 10:28 AM

Sure, as an owner I'd rather save the money up myself and not trust it to the council.  As a council member I see the need for quick access to funds for large repairs. 

 

The depreciation report helps owners to plan for major repairs, but it doesn't force them to save. 

 

Bylaws don't force owners to be quiet either when they should be.  

 

Managing a building is not really property management, in reality it is people management.

 

Irresponsible owners come with every strata.


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#23 sebberry

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Posted 31 December 2013 - 11:19 AM

I think of it more like running a business than just managing people and you need to mitigate the risks of having bad people on-board. 

 

You can manage people and enforce bylaws 'till the cows come home (see my earlier comment in another thread about being stopped by the council chair leaving the parking garage and "disciplined" for not flattening a box in the dumpster) but that does little for maintaining the bones of the building. 


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#24 Mike K.

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Posted 31 December 2013 - 11:28 AM

Everything has to be taken in context using common sense.  Would I question a 20 year old building deferring a depreciation report? Yes.  Would I question a 1 year old building deferring a depreciation report? No.  

 

Family friends purchased a waterfront condo in Victoria a couple of years ago. Going back through six years of strata minutes they could not find any mention of any engineering reports and there was a record of council tackling a few maintenance issues over the years. The building itself seemed fine and a preliminary inspection of their unit checked out, suggesting major remediation or maintenance was not in the cards. All in all everything checked out.

 

Two years later strata announced a $5.5 million remediation was required immediately. When the folks who bought inquired about an engineering report that hinted at the need for remediation, it turned out strata had withheld/no longer had minutes from year seven onwards (they claimed none were on file but that the engineering report had been issued some seven or eight years prior) and the owner who sold the condo claimed he had no knowledge of the engineering report having ever been issued.

 

This case went before the courts and luckily the buyers were able to produce documents and find minutes mentioning the engineering report from seven/eight years back and confirm the seller was in fact a member of the council at the time. The seller claimed ignorance, the council was off the hook, but the judge agreed the seller could not claim ignorance and willfully sold his unit without alerting the buyer of the report. Meanwhile a slew of other buyers in that building could not afford the massive levy and had to sell off their units at a huge loss.

 

Hearing of this and spending time with them while they were preparing for the court case made me realize that buying in an older building can be seriously risky/costly, even if everything seems kosher.


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#25 Greg

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Posted 31 December 2013 - 11:37 AM

Yes, fair enough. But a contingency fund is just a bank account, so whether I manage that bank account or the strata council manages it is pretty moot in my opinion.

 

Actually it is more like an escrow account. The issue (as you have acknowledged) isn't whether that account is a better place to keep YOUR money. It is whether it is a better place to keep your NEIGHBOR's money. And it definitely is. When you may predictably have to depend on someone else to co-fund something, and where you are less then certain of their ability/desire to act when the time comes, then an escrow account is a very useful and common vehicle in lots of business arrangements.


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#26 sebberry

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Posted 31 December 2013 - 11:37 AM

A building very near me is undergoing some major repairs, and from what I've heard (really just speculation) is that a similar thing happened there.  Council member hid documents, moved, etc... 

 

I'm trying to be open and build a better archive of documents for our building.  When I proposed the idea of a private website to store our documents on, a previous council member started screaming that the NSA might be interested in our documents if we stored it on servers in the US. 


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#27 Mike K.

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Posted 31 December 2013 - 11:44 AM

You know what saved the folks I mentioned? One owner out of over 100 units or what have you, just happened to have collected all council minutes and stashed them somewhere in her storage. The folks placed a note in the building's elevators asking for older minutes and by the grace of some higher power this lady turned up with the info they were looking for. Without those minutes they would have been on the hook for a massive amount of money.


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#28 sebberry

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Posted 31 December 2013 - 11:55 AM

When you don't want all the documents and maintenance records for your building archived somewhere, you're surely hiding something.  Either your own corruption, incompetence or both. 

 

We've had documents go missing from one council to the next, or one property management company to the next. 

 

My proposal to store documents electronically was attacked from multiple angles.  Makes you wonder, doesn't it? 


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#29 MarkoJ

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Posted 31 December 2013 - 12:09 PM

Actually it is more like an escrow account. The issue (as you have acknowledged) isn't whether that account is a better place to keep YOUR money. It is whether it is a better place to keep your NEIGHBOR's money. And it definitely is. When you may predictably have to depend on someone else to co-fund something, and where you are less then certain of their ability/desire to act when the time comes, then an escrow account is a very useful and common vehicle in lots of business arrangements.

 

There are many problems with huge contingency funds as it can become a huge money management headache.  Let's say you are stalking away for new elevators/roof/etc. in 15 years and 12 years from now we get hit by massive inflation?  At that point you have volunteers trying to manage millions in a tricky situation. 

 

Also important to remember that no contingency fund will cover a serious problem (parkade membrane leak, envelope failure, etc.)


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#30 MarkoJ

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Posted 31 December 2013 - 12:11 PM

My proposal to store documents electronically was attacked from multiple angles.  Makes you wonder, doesn't it? 

 

I am a huge fan of strata corporation that run private websites to store documents.  Makes sense to me.


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#31 MarkoJ

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Posted 31 December 2013 - 12:15 PM

Hearing of this and spending time with them while they were preparing for the court case made me realize that buying in an older building can be seriously risky/costly, even if everything seems kosher.

 

It sure can be risky irrelevant of contingency fund.  I believe the building you speak off had a massive contingency fund too, but not in relation to $5.5 million.

 

Anything older than 5 years (out of rain screen warranty) were the depreciation report has been deferred and there is no engineering report I would be fairly concerned.   


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#32 Mike K.

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Posted 31 December 2013 - 12:35 PM

Yup, knowing what I know now I would be too.

 

I can imagine though that when looking for a home and you finally find one in the perfect location with the perfect layout and at a price you can handle, finding out that certain reports have yet to be generated or that there might be missing details here and there are probably at the back of a buyers mind. Once that home buying train starts rolling its hard to stop it ...especially if the wife loves the kitchen. And then two years later WHAM, it hits ya.


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#33 pherthyl

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Posted 31 December 2013 - 03:12 PM

I agree. If I were looking for a condo I would run the hills once I realized strata fees were the bare minimum and the council was frugal.

 

The implications of a frugal council could be financially catastrophic for a new buyer. Imagine suddenly finding yourself in a situation where you have to borrow $45k on top of your mortgage.

 

I would argue it is the buyer's (or possibly their realtor's) responsibility to be aware of that before buying.  If you buy without knowing the state of the strata finances it's kinda your fault.



#34 pherthyl

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Posted 31 December 2013 - 03:23 PM

I think the fundamental lesson from this thread is:  Don't buy a condo.

 

Now fight.



#35 Greg

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Posted 31 December 2013 - 03:27 PM

I think the fundamental lesson from this thread is:  Don't buy a condo.

 

Now fight.

Because there is absolutely no chance that one day a single-family home may require repairs that you can't afford to make. :)


Edited by Greg, 31 December 2013 - 03:28 PM.


#36 mysage

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Posted 31 December 2013 - 03:31 PM

I would argue it is the buyer's (or possibly their realtor's) responsibility to be aware of that before buying.  If you buy without knowing the state of the strata finances it's kinda your fault.

Actually I believe that  the Seller must provide a copy of the Strata Minutes for at least the last fiscal year (if not longer). I believe that buying a condo may be safer that buying a single family dwelling as there is so much more documentation avialble for the buyer than what a buyer would find when buying a house.



#37 rambaldi

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Posted 31 December 2013 - 06:38 PM


As for the Wave (which is where I live), the (two year) holdup was getting the original development team to pay for the repairs/replacement.  A tentative agreement has been reached, subject to approval of the membership of the strata corporation.  I think it would be unfair to assume the strata council was "paralyzed"; these things take time and lawyers to sort out.  In my opinion, the Wave is very well run, with a decent contingency fund, and a solid plan for regular maintenance.  Implying the delay in getting the mosaic fixed is due to poor building management is very unfair.  

 

jklymak, Did the Strata need to obtain legal representation to reach a tentative agreement? If so, do you happen to know the name of the lawyer?  



#38 jklymak

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Posted 31 December 2013 - 08:54 PM

Sorry, I didn't realize you lived in The Wave. Weird co-incidence. I didn't take into account the original developers might be on the hook for repairs. Sometimes it's really hard to get them to fix things years after completion but you should have a good case as it's a failure of the outside envelope. Yes, if the developers are still in play legally, then the delay is normal and totally understandable.

 
No problem.  I certainly have pointed out to council a few times that having tarp on the side of the building for years on end makes the building look bad and that we should be compensated for that.  Not sure the settlement has any such compensation, but I bet it was used as leverage.  
 
Just to clarify, there is no problem with the building's envelope that I've ever heard about - that would have been covered under the 5-y envelope warranty.  The tiles are decorative.  
 

jklymak, Did the Strata need to obtain legal representation to reach a tentative agreement? If so, do you happen to know the name of the lawyer?  

 

Sure, its public knowledge:  Sat Harwood at Lesperance Mendes in Vancouver.  He apparently specializes in these situations. 



#39 Mike K.

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Posted 01 January 2014 - 11:23 AM

I would argue it is the buyer's (or possibly their realtor's) responsibility to be aware of that before buying. If you buy without knowing the state of the strata finances it's kinda your fault.


Absolutely, but the point is sometimes the buyer and their realtor are not made aware of a defect and have no way of knowing what's coming down the pipes. What do you do if you have minutes for the last five years but a big issue was diagnosed six or seven or eight years ago, as was the case in my earlier posts? Eventually you have to settle on something.

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#40 jklymak

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Posted 01 January 2014 - 12:45 PM

^ sellers are still legally responsible for passing this info on. Glad it worked out for your friends

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