Facing operating deficits and dwindling reserves, the board goes on a
The security guard hours may be cut back to twelve hours a day instead
of twenty-four. Then they are on site only on the weekends. Next, the
board finds a lower-cost provider. Finally security may be cut
Some boards repair and replace parts, materials and machinery in the
condo's common elements using the same logic. They will get
the job done as cheaply as possible so it will last long enough for
them to sell their units before the work has to be redone.
maintenance work may be eliminated or pushed back. Work
that should be done monthly may be done every three months. Bi-annual
window washing gets reduced to once a year or once every two years.
Hallway carpets may not get cleaned regularly and the parking garage
may not be swept clean annually; maybe every two years and then maybe never.
A leaking roof may get patched rather than being replaced. Major
repairs to the parking garage get ignored.
Some boards change management companies, hiring lower-cost providers
and even do some of the management work themselves.
When we owned our house, we would shop at "Colour Your World" for
paint and wallpaper. Evey time we were there, someone would come in and
say to a sales clerk that they wanted to buy the cheapest paint and
wallpaper in stock because they were refreshing their house so they
could sell it.
Mould is often ignored
For example, a building may get a pinhole leak in the hot water risers. The
first two or three times, they get the plumber to patch the hole and
have a handyman repair the broken drywall. That should buy them six
months to arrange for replacement of all the hot water risers.
When it becomes obvious that the risers need to be replaced, they can
use three different quality of materials.
L copper 20-25 years (piping & balancing valves)
M copper 15-20 years
There are boards, not many thank goodness, who replaced their copper risers with PVC because
it was a lot cheaper. Not only is the material less expensive but it is
a lot quicker to install.
Some boards don't replace the risers when they age. They just keep
on repairing pinholes as they occur putting off the major cost for
To save money, some of the amenities are closed. A guest suite may be
leased out to a renter instead of being rented from time to time and the party and
fitness rooms may be closed.
Closing the swimming pool saves a lot of money as they are very
expensive amenities to service while hiring life guards for an outdoor
pool is very costly. Once closed, they may never be re-opened.
The city threatens to
disconnect a condo's hydro
What expenses cannot be cut, may get pushed out into the future. Bills
do not get paid when due. Late payment charges add up but the board is
trying to buy time. Contractors may have to wait longer before getting
paid and a defective elevator may stay out of service far longer than it should.
Funds are transferred out of the reserve fund to pay for operating
expenses so the reserve fund gets drained.
On the other hand, the board needs to insure that it is collecting all
the common element fees that is due. The corporation lawyer needs to
lien all the units that are behind on their fees. (Yet some boards are
very reluctant to go this far and units may be months or even years
behind in their fees.)
Finally, all the tricks have been exhausted and there is a financial
hole that has to be filled. That is when the condo fees have to be
raised but it is now far too little—far too late.
chapter previous next