Tuesday, April 27, 2021

2021 and Still Waiting

It has been a long time since I last posted. 

Looking back, I see an optomistic post I wrote in 2012 that talked about the problems with condo Reserve Funds and how I hoped that the Condo Act amendments that were starting to be discussed at that time might solve the problems. Yet here we are, in 2021 and the same problems still exist. Ontario Condos still start off underfunded in EVERY case. 10% of the operating budget IS NOT ENOUGH!!. The 30 year analysis period is still NOT long enough for new condos, given that there are very few expenditures in the first twenty years. And nothing has been done to prohibit long phase-in periods that allow condos to defer the bulk of the reserve fund contributions to future owners.

The oldest condos is our industry are now over 50 years old and many of them are struggling. They provide us with a very clear education about what happens when a reserve fund is not adequately funded. The financial difficulties simply build with time until they become almost insurmountable. The buildings degrade physically. People who move in are unlikely to have the resources available to afford a special assessment, if one is needed.

The Auditor General completed a review of the condominium industry in 2020 which contains many recommendations to rectify these same concerns.  The Ministry did a new consultation in 2020 are received much of the same feedback. We, as an industry, have done everything we can do to help move things in the right direction. Now we wait, again!

I joke that I won't retire until some of these key financial issues are addressed. I'm starting to fret that the government might make a liar of me.

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