What happens when condo building is getting too old?

[Zeiss]

What happens when condo building is getting too old and it's too costly to maintain ? The older it gets, the more repairs it needs, the maintenance fee will get so high that is not going to be worth it and no one would want to buy.

 

[Johnny Au]

It gets demolished and a new one with higher capacity is built.

Note that most condos aren't old enough to be designated heritage status, even when they become too costly to maintain.

 

[Zeiss]

It gets demolished and a new one with higher capacity is built.

Note that most condos aren't old enough to be designated heritage status, even when they become too costly to maintain.

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Ok, maybe my question is not clear enough.
Our condo is 40 years old, it needs more and more repairs, the maintenance fees gets higher and higher. I am afraid that the price may start going down due to the age of the building and the cost of upkeep.
At what point is best to get rid of it, before it gets too late?

 

[junctionist]

It isn't necessarily the case that most condos will get demolished in anyone's lifetime, unless there's an economic case to build something else on the land. The cladding will get replaced at some point and the mechanical systems will be refurbished. All common spaces should get renovated. After a generation of refurbishing, maintenance costs should stabilize.

 

[Admiral Beez]

How do you demolish a condo? I mean, what's the process to get hundreds of individual owners to agree? Do the unit owners get a piece of the new build? Does the condo corp. just buy everyone out and then dissolve? Where does the money come from for the demolish?

 

[DSC]

How do you demolish a condo? I mean, what's the process to get hundreds of individual owners to agree? Do the unit owners get a piece of the new build? Does the condo corp. just buy everyone out and then dissolve? Where does the money come from for the demolish?

As noted in Condominium Act the Corporation can sell the building and owners will get the % of the proceeds that equals their share of the monthly fees.

Corporation’s sale of the property

82.1 (1) A corporation may sell the property if,

(a) the owners of at least 80 per cent of the units, at the date of the vote, vote in favour of the sale;

(b) at least 80 per cent of those persons who, at the date of the vote, have registered claims against the property that were created after the registration of the declaration and description that made this Act applicable to the units being sold, consent in writing to the sale; and ....

 

[argus]

A condo building - or more precisely elements of a condo building can always be fixed or updated. The plumbing, electrical, HVAC, windows and cladding can be repaired or replaced. There is no need to tear down the entire structure. Keeping up the reserve fund is essential, as is getting a good engineer to do a thorough reserve fund study.

 

[ShonTron]

If you're in a building that's "getting old" but without regular maintenance and the funds for major rehabilitation, then you're not living in a properly managed condo. And many aren't. Maintenance fees should be high enough to cover all the expenses; with those dreaded special assessments levied only for unexpected emergencies.

Trouble is, many condo boards are unaware, incompetent, or in some cases, even corrupt. Like municipal politicians, condo boards are often elected on promises to keep fees low, but ignoring the long-term consequences.

 

[lrookies]

If you're in a building that's "getting old" but without regular maintenance and the funds for major rehabilitation, then you're not living in a properly managed condo. And many aren't. Maintenance fees should be high enough to cover all the expenses; with those dreaded special assessments levied only for unexpected emergencies.

Trouble is, many condo boards are unaware, incompetent, or in some cases, even corrupt. Like municipal politicians, condo boards are often elected on promises to keep fees low, but ignoring the long-term consequences.

This is absolutely true. Housing Co-operative Boards often have the same problem. No Capital Replacement Reserve funding and planning by Boards means that inevitably everything ages and nothing is replaced. That can get costly in the long run. Aging taps can create water problems, which create other problems (mold, etc); windows and doors, elevators, etc. Whatever is considered replaceable, long term planning and funding is ABSOLUTELY necessary, or deterioration can be sudden and pretty swift. Boards that do not commission a replacement study and do not put away funding for Replacement Reserves are only sucking up for future problems.

 

[DSC]

This is absolutely true. Housing Co-operative Boards often have the same problem. No Capital Replacement Reserve funding and planning by Boards means that inevitably everything ages and nothing is replaced. That can get costly in the long run. Aging taps can create water problems, which create other problems (mold, etc); windows and doors, elevators, etc. Whatever is considered replaceable, long term planning and funding is ABSOLUTELY necessary, or deterioration can be sudden and pretty swift. Boards that do not commission a replacement study and do not put away funding for Replacement Reserves are only sucking up for future problems.

Not sure about the rules for co-ops but in CONDOMINIUMS in Ontario a Board must have a Reserve Fund Study done every 3 years. These look 30-years into the future. (They must be done by a professional like an engineer.) Then the Board must follow the funding requirements set by the Study. Not perfect but far better than nothing!

 

[ShonTron]

Not sure about the rules for co-ops but in CONDOMINIUMS in Ontario a Board must have a Reserve Fund Study done every 3 years. These look 30-years into the future. (They must be done by a professional like an engineer.) Then the Board must follow the funding requirements set by the Study. Not perfect but far better than nothing!

But if they don't (and they don't more often than anyone wants to admit) it's up to the owners to take their condo board to court if they don't comply. The laws are great, if they're followed.

 

[DSC]

But if they don't (and they don't more often than anyone wants to admit) it's up to the owners to take their condo board to court if they don't comply. The laws are great, if they're followed.

Yes, that is one of the things the new Condo Authority just being set up is supposed to make easier. If a Board does not have (or follow) a RFS this would be noted unfavourably by the auditor but ...

 

[Ex-Montreal Girl]

Our building is 40+ years old and it's been one damn thing after another. The envelope, the garage, the balconies, the exhaust fans, etc. It didn't help that it was the wild west for many years where people did what they please, interfering with common elements and, as a result, impacting on the plant's systems.

I joined the Board as treasurer after years of fees being kept down more than they should have been and money spent on cosmetic changes, the lobby, the corridors etc. A window replacement project about 10 years ago was a disaster (we were not living here then) for a number of reasons starting with the Board trying to go as cheap as possible. Anyway, once I got on the Board, we bit the bullet and announced that our fees were jumping by 10%/a three years in a row in order to catch up. The balcony replacement project resulted in SA of less than $3K per suite which I think is amazingly low. Now we are in excellent shape, working on the ventilation system, renovating our gym and party room, doubling our emergency generator capacity from 72 hours to 144 hours (one elevator, emergency lights, cold water to the top floor and power on the lobby level where folks can charge their phones and make tea/coffee.)

Our next big nightmare is the elevators which should have been done in the early 2000s but the former Board opted for a refurbish which was throwing good money after bad.

You can't afford to be cheap.

The bottom line: Our building was kind of a fixer-upper but had great bones, spacious suites, amenities and other features. Now it's like one of those extravagant Riverdale renos which went up bigly in value.

 

[lrookies]

Not sure about the rules for co-ops but in CONDOMINIUMS in Ontario a Board must have a Reserve Fund Study done every 3 years. These look 30-years into the future. (They must be done by a professional like an engineer.) Then the Board must follow the funding requirements set by the Study. Not perfect but far better than nothing!

Federally funded Co-ops were ordered by the Federal Agency for Co-ops, who took over the oversight for Federal C0-ops in the 1990's to up their replacement reserve funding and submit a 3 year replacement plan to the agency. They were also pushed to complete a Reserve Fund Study as well, by a professional engineering firm. Unfortunately, this should have happened when Co-ops were in their heyday, signing Mortgage papers in the early 1980's. Unfortunately, many did not, and as a result, as their mortgages come close to expiry, those who did not manage their replacement reserves and maintenance programmes, either wound up in serious disrepair or having to go for a second mortgage just to pay for those repairs. Boards of Directors need to budget for future maintenance...if they don't, its a recipe for future problems.

Condo Boards are the same way. Board members should not be elected because they promise to keep fees or rents down. They should be elected on the basis of how well they will protect the assets. A condo is an investment, as is a Co-op. They may function slightly differently, but the principles are exactly the same.

 

[Alwaysup]

Ya I have always wondered what happens to any residential building that gets to old