This month’s news featured a horrifying story of a serious fire at the Millrise, a 159-unit condominium building in Calgary. Luckily, no one was seriously hurt, but 300 people are homeless and the 3-story wooden building was subsequently condemned by the city as uninhabitable.
We carried the following related news articles on our microblog, some of which feature video footage of the fire and resulting damage:
Continue Reading...Daily Commercial News reports on a trend emerging in response to the deteriorating physical and financial condition of older condominiums -- "lender tenders."
The article cites a report by GRG Building Consultants showing that condominiums built in the 1970s are in worse shape today in terms of their building envelope and structure compared to complexes built in the 1980s and 90s. Moreover, increasingly stringent reserve fund requirements in the Condominium Act since the 1980s have created a financial gap between condominiums built in the 1970s and those constructed afterwards. The 1970s condominiums are less likely to have a properly-funded reserve to pay for major repair and replacement of the common elements than condominiums constructed since then.
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In a recent blog post, personal finance diva Gail Vaz-Oxlade reminds homeowners of the need to budget for home maintenance items and be ready for big costs that can arise. Good advice.
Condominium corporations typically prepare their annual budgets with reference to the reserve fund study ("RFS") mandated by section 94 of the Condominium Act. The RFS helps ensure adequate funding for the major repair and replacement of common elements. The Act requires that the RFS contain both a physical analysis of building components (including a component inventory with estimated remaining lifespan for each item) and a financial analysis as to the various costs of each item and a plan for the future funding of the reserve.
The reserve fund study does not, however, provide much guidance about routine maintenance, which leaves condo boards to make their own judgement calls and to pay the cost for such work out of the operating account. As a result, it becomes easy to justify putting off expenditures for routine maintenance when times are tough or the budget is tight.
While deferring simple maintenance might seem like a good short-term solution, that approach may be more costly in the long run.
While her comments were probably directed to owners of freehold houses, Gail says the following which is directly applicable to condo complexes of any description:
"You can skimp on your home maintenance, ignoring the cracking foundation, the rotting deck or the fence that’s falling down only so long. When it finally MUST be done, no doubt it’ll cost three to five times as much as it would have if you’d simply maintained it."
With the good weather soon upon us, condo boards and their managers should inspect their common elements from top to bottom and work with their engineers and contractors to identify components that require preventative work this season.
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The Home Renovation Tax Credit (“HRTC”) generated considerable buzz after being introduced as part of the Federal Budget this year. The HRTC provides a tax credit of up to $1,350 for homeowners to perform renovations on houses, cottages and residential condominium units.
Click here to see Bob Gardiner’s summary of how the HRTC might apply to both condo corporations and unit owners.
With so many condominiums reaching 15-20 years of age, the HRTC will likely cause a small surge of renovation work in condominium units this year, which might help the economy in a small way and add value to condo units and complexes alike. But with this good news comes the possibility of a corresponding surge in disputes between condominium corporations and their unit owners.
Continue Reading...Bob Gardiner of our office has given the following quick summary of the nuts and bolts of the Home Renovation Tax Credit (“HRTC”) that was introduced as part of last week’s 2009 Federal Budget:
The HRTC will provide a 15% non-refundable tax credit to individuals for eligible expenditures in excess of $1,000 but not more than $10,000 made in respect of eligible dwellings. That will result in a maximum federal tax credit of $1,350 ($9,000 x 15%). The work must be performed between January 28, 2009 to January 31, 2010. The HRTC provides a single limit for each family consisting of an individual, spouse or common law partner and their children under age 18 throughout 2009.
An eligible dwelling consists of a person’s principal residence or the principal residence of one or more of the other family members. For condominiums and co-operative housing corporations, eligible expenditures will include the individual’s share of the cost of renovating common areas, in addition to costs to renovate the unit. Portions of a home used partly to earn business or rental income do not qualify, but the residential portion of a home can qualify for appropriate expenditures in respect of the personal-use areas. Expenditures made in respect of common areas or that benefit the housing unit as a whole such as re-shingling a roof, must be allocated between personal and income-earning use in order to determine the portion that qualifies for the credit.
The renovations must be of an enduring nature that are integral to the dwelling (or common elements), including expenditures for the cost of labour and professional services, building materials, fixtures, and equipment rentals and permits. However, routine repairs and maintenance typically performed on an annual or more frequent basis are excluded expenditures, as are expenditures for appliances, audio-visual electronics and financing costs. Furniture, draperies and other indirect expenditures that have a value independent of the renovation (such as construction equipment and tools) do not qualify. Goods or services must be provided by a non-arm’s length person supported by receipts and GST charges.
Click here to see Frequently Asked Questions about the HRTC on Canada Revenue Agency's website.
Click the picture to the left to view details about the HRTC on the Budget 2009 website.
Something unusual is going on in Vancouver this winter. It's snowing -- a lot.
In reporting on life in the snow in her State of Vancouver blog, journalist Frances Bula shares her readers' comments about people failing to shovel their sidewalks.
Among the commentators is a Vancouver city council candidate who focuses on the large number of downtown condominiums that have not cleared their sidewalks. He suggests that snow-clogged sidewalks in front of condominiums may just be the tip of the iceberg in terms of poor maintenance and repair practices at those buildings and could be a danger sign. He then offers some sensible suggestions to condo boards and prospective purchasers.
Daily Commercial News reports on the swag being distributed by more than 1100 exhibitors at PM Expo and shares some of the sights and scenes of the show, which ends at 1 p.m. today. Last call!
Dozens of seminars and workshops informed and educated hundreds of people over the past two days. I was one of many in attendance for the "Mould, Moisture and Related Building Envelope Failures" workshop given by Bruce Stewart and Phil Brearton of Pinchin Environmental. A handful of their many excellent points included:
Some additional information from Pinchin (thanks, Bruce!) on dealing with water damage and mould growth can be found here and the full PowerPoint presentation from the seminar is here. Stay dry.
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