Cost cutting
Facing operating deficits and dwindling reserves, the board goes on a cost-cutting campaign.


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 altogether.

Some routine 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.

Low-cost providers
Some boards change management companies, hiring lower-cost providers and even do some of the management work themselves.

Replacement parts
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
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.

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
PVC           5-10 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 years.

Amenities closed
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.

Revolving payments

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.

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