IRP - Mandatory repairs on condos

[TimBit]

Read the policy throughout, flipping the pages upside down lest I missed something, and still found no answer. Maybe one of you will know...

Three years ago I bought a condo unit in the NCR and we got slapped with 12K mandatory special assessments for external repairs... woohoo! Anyone knows if these can be taken into account for the calculation of base value when selling with IRP?

Tks!

 

[George Wallace]

Sounds like what a "home owner" would face when it comes to the sale of their house; what they spent on repairs and renovations would be lost other than making it up in the sale of the house being more than the original purchase.  I don't think there will be any clause in any of the documentation, whether it be a house or a condo, that will allow for the recuperation of what may be normal maintenance charges.

 

[TimBit]

Yeah so I thought... but then if you put in a new kitchen it's accounted for in the base value. I guess it is considered "improvements", though...

Ah well... 12K down the drain.

 

[George Wallace]

Ah well... 12K down the drain.

Only if you sell at a loss.

 

[dapaterson]

Remember the New Yorker cartoon - "On the Internet, no one knows you're a dog"

Confirm details with Brookfield about what is and is not covered - they are the experts.

 

[CountDC]

I agree with DAP - what may seem to be simply repairs may actually be considered an improvement depending on what was involved.

 

[TimBit]

Excellent point, CountDC. Part of it actually was an improvement since it included new eco-friendly materials to increase insulation and thus decrease heating costs. I'll ask the property for a cost breakdown before taking that to Brookfield.

Still... in the end I WILL have lost money. But what the heck, surely I ain't the first one.

 

[dapaterson]

Quickly looking over the directive:  You may need more info from the Condo Corp about what was done.

The following is an all-inclusive list of eligible capital improvements:
•
Additions - bedroom, bathroom, deck/patio, porch, walkway, storage shed, garage.
•
Installations - new windows, driveway (including paving), central air conditioning.
•
Complete modernization – kitchen (new cupboards, countertops, sink, taps, etc) or bathroom (new cupboard/vanity, countertop, sink, shower/tub, etc).
•
Heating System – change from hot water radiator to forced gas or upgrade to high efficiency furnace and required ductwork.
Basic Landscaping – other than decorative including the installation of a perimeter fence. (On new home construction excludes initial landscaping which occurs within one year of occupancy when not identified by Building Agreement.)

Thus, if the work included a new driveway or new windows or basic landscaping, a portion attributable to those activities MAY (and I stress MAY) be reimbursable.

Again, confirm with Brookfield - and be ready to provide info from the Condo corporation about what was done, how much it cost, and what costs were attributed to what parts of the work.

 

[TimBit]

I'm bracing for the worse and hoping for the best  ;D

I see nothing in the policy (the exact paragraph you quoted) which could conceivably include what we did. I will sure as hell know for our next purchase...

 

[Pusser]

If you sell your home at a loss on posting, there are two benefits that may kick in.  One is capital improvements (already discussed) under Section 8.2.10 of the current IRP Directive, but the other is Home Equity Assistance (HEA) under Section 8.2.13.  In the case of HEA, you only have to have lost money.

It is worth noting that we used to use qualifying capital improvements to determine an "adjusted purchase price" for use in calculating reimbursement for Home Equity Assistance.  We no longer do it this way and instead treat capital improvements and loss of equity as two separate items.  However in both cases, they only kick in if you sell at a loss.

 

[TimBit]

Thanks for that Pusser. My apparent problem is that, according to the real estate agent, I'm probably going to sell at a small profit over my purchase price (like 4-5k), nowhere near enough to recover the sunken costs (12K).

The other option would be NOT to sell, and rent instead, until market has picked up a bit. But over two or three years, while the value would increase maybe 4-5 k, those profits would be eaten by me having to pay the real estate commission.

Gosh I'm stessing out just writing about it...

 

[Pusser]

You might want to look at the Real Estate Incentive (REI) at Sect 8.2.14.  This will pay you 80% of the estimated real estate and legal fees if you choose not to sell.  However, be careful because once you choose this it is completely irrevocable, but if you think you might ever get posted back to the same location, you'll already have a place to live.  If you do get posted back, the clock is re-set and you could sell and claim the real estate and legal fees on a subsequent posting.  Another advantage is you can take the REI up front and sell the condo next year if the market improves.  You would have to pay the real estate and legal fees, but by then you would have had the advantage of the REI in your pocket in the interim.

 

[observor 69]

I am a member of the Board of Directors in our condo apartment building.
Just a few nights ago we had our monthly meeting of the Board and our Property Manager.
Our building went through a number of bad property managers. We took great care and searching to find our present PM.
Ontario passed a new Condo Act a few years ago, it sets out strict rules and time lines on operation and maintenance. A building engineering Reserve Fund Study done at regular intervals establishes the requirements of the  Reseve fund to meet the projected costs over the next 20 years of the building life.
Hence a condo building with a Property Manager who keeps the Reserve fund monies, through condo fees, at the levels  recommended by the engineering study should hold no surprises such as Special Assessments.
It is the responsibility of the buyer's lawyer to ensure the "Status Certificate" shows a current Reserve Fund Study and a Reserve Fund containing the money called for in the Study.

 

[TimBit]

I know all that Baden Guy. Here are the things however:

1. Quebec does not have such a law..it will very soon, but back then it didn't.
2. Just like you, we had bad PM's and completely uninterested owners who do not attend meetings (I was on the board).
3. Judging by the condo fees of most new constructions, I would venture a guess that people still haven't learned. 65$ a month is a ll sweet and nice but you're not gonna get a reserve AND a renovation fund. And 5-10 yrs down the road those repairs will come and bite you in the bum.

But most important, when we bought I wasn't Reg Force and it certainly wasn't on the radar. So we were planning on staying long enough to make it back, BUT...funny how things change. Other thing is we had our hand forced by a little fire four years ago, which precipitated further constructions. Now our funds are healthy and the condo fees high enough that no surprises should come. BUt I was caught in those bad years.

And...also very important:  I was young and stupid. I did not know. Now I do.  :crybaby: Things will sure be different in our next home I can guarantee you that.

 

[observor 69]

Timbit I guess, make that I know, you can call me lucky. We bought our condo apartment a few years after I retired. So we were starting with a brand new building and shortly after the Ontario Condo Act came into effect. The new Condo Act is an attempt to deal with all the issues you and other owners have had to deal with.
Our building is ten years old now, our Reseve Fund Study is up to date and our Reserve Fund follows the balance in funds called for by the study.
At our last Board meeting our PM was telling us tales of some buildings they have taken over that had major problems and little in a Reseve fund.  Sad!

Best of luck with your situation.