Protecting yourself

It is astonishing how long these condos can get away with keeping the fees too low to properly maintain the building. This can go on for 10-30 years before the city inspectors or the fire department forces the corporation to face reality by issuing work orders, CMHC stops insuring mortgages and perhaps the banks refuse to mortgage the units.

What can concerned owners do?

If you cannot organize even just a small percentage of the owners to fight against the board on a "Raise the Fees, Fix the Building" platform, then you must think hard about protecting yourself.

Get off title

Put your unit up for sale and move out of the building before the prices drop. This is probably your best bet. You will be better off renting than being an owner on title at a deteriorating condo.

Didn't get out in time
You didn't sell in time and now the prices have dropped and you can't sell.

The huge increases in your monthly expenses and the special assessments and/or loans have made it impossible to pay your housing costs and pay your bills. So what do you do now?

Rent rooms
Rent out the second bedroom and get a second job. Cut your costs. If you sell your car, you can rent out your parking spot.

Become a slumlord
If that is not enough, then convert the den and the living room into two more bedrooms while you keep just the master bedroom for yourself.

If this doesn't sound like something you could live with, move into a rental building and lease out your unit to someone who will live there and will sub-divide your unit to make the monthly costs affordable.

Abandon the unit
As a last resort, abandon your unit.

I know of a couple who's condo corporation went under court-appointed administration. The monthly fees took a huge jump and the administrator was negotiating a long-term loan so the monthly fees were going to be even higher.

The couple couldn't sell their unit as the monthly fees were so high no one would buy. Unit values dropped to a third of what they paid for their unit and it would be years before the prices would rise.

So they stopped paying their mortgage and monthly maintenance fees. The money they saved paid the first and last month's rent on the apartment they leased plus their moving costs. They also got a little cash.

The bank will own the unit and will pay the maintenance fees. The bank will sell the unit under power of sale and will take the loss. The value of the other units will take another hit as yet one more unit is on the market for whatever the bank can get.

Sure the ex-owners' credit rating will take a pounding for a few years and that will hurt but soon they will be off title and out of a dysfunctional condo corporation. Already there is far less stress in their lives.

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