Condo Maintenance Fees - Update

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Dear fellow owners.

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It’s unavoidable: Our monthly condo fee will be increasing for the coming year, not by an excessive amount, but enough to keep special assessments at a safe distance and our reserve fund in good shape. What are "special assessments", you ask?

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Condominium owners at

Guildwood Terrace, 3233

Eglington Avenue E, were

recently informed that they

needed to pay between

$25,000 and $50,000 each

to cover the $12.5 million

“building envelope” project

that included replacing all

the windows.[1]

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There was simply not enough money in the reserve fund from the monthly condo fees. The work had to be done, so owners were given the choice of making a single lump-sum payment or annual installments. This was a "special assessment", and for all condominium owners, a nightmare.

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In another case, owners at Twin Towers, 234 Albion Road, similarly had to pay a special assessment of about $10,000 each, in addition to paying off a seven years’ old bank loan to repair balconies. Again, the reserve fund could not cover the costs.

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No-one wants to receive a special assessment; they happen usually after years of boards’ mismanagement or reluctance to plan for future costs. Often, board members will champion the cause of “reducing the monthly condo fee,” until reality hits in the shape of insufficient funds to carryout necessary repairs. In most instances special assessments can be avoided by careful financial planning by the board.[2]

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At Silver Shadow Path (YCC 110) your Board examines the condo financial statements in great detail, and we follow the recommendations of the Reserve Fund Study (a required study done every three years, by a third party, estimating expenditures for anticipated work and detailing the amount of money the condominium corporation should hold in the reserve fund).

We face three challenges, and we want everyone to be aware of them.

• Age & repair. 2023 is our 50th year and like the human body things become worn out, fall off, or need repair. We have had three watermain breaks in the last 6 months on old pipes, so renewing pipework for the entire complex is a current top priority. Some of the fences are deteriorating, railings are rusting, roadways will need resurfacing, and fire hydrants will require replacing at some point.

• The cost-of-living surge. We have all been experiencing higher prices since the beginning of 2023 in the supermarket, but it’s also present in costs of energy, lumber, materials, equipment, contractors, and labour.

• A third challenge is the threat of increasing damage from changing climate: stronger winds, storm damage to trees, roofs, risk of flooded basements, and more. We certainly have experienced higher than “normal” wind over the past few years, causing ongoing damage to the roof shingles.
   

What is the current situation, and how far have Toronto condo communities lapsed?   Even before the current inflation spike, the Auditor General of Ontario reported in 2020 that 69 percent of surveyed condo boards did not have adequate funds to pay for major repairs. While the best-managed condominiums are likely to incorporate fee increases of eight percent or more, some high-rise condominium communities can expect fee increases in the double digits. Many condominium boards have been basing fee increases upon the Consumer Price Index (around 2 percent) - clearly unrealistic - and Toronto Condo News reports that increases between 35% and 50% may be necessary to avoid special assessments.[3]

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What about fees at Silver Shadow Path? We have consistently followed or exceeded the Reserve Fund Study Contribution Guide as we prepare the annual budget for the operating costs and reserve fund contributions. This year, we are planning a 6.9% increase for monthly maintenance fees. We believe this will keep the fund healthy, with enough of an allowance to deal with increased costs on building/repair materials, water, electricity and other related expenses due to the age of the complex, inflation, and more.

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You will see the budget and increase to our monthly fees in the communication that is being mailed today, May 8th, from the management office.  

Your comments and questions are welcome – send an email to tsly@torontomu.ca  or use the Owners’ Forum to post ideas and comments. You’ll find the Owners’ Forum tab on the front page of the website (www.silvershadowpath.com).

 

[1] TOCONDONEWS.COM April 2023, p. 22

[2] TOCONDONEWS.COM September 2022, p7

[3] TOCONDONEWS.COM September 2022, p6