When you’re looking for a home, you need to find a unit you like, and one that’s also in a good building. My job is to help you avoid the bad buildings and make sense of the decent buildings. One of the most common details the Buyers, especially first time home buyers, don’t totally understand is building maintenance and what makes a worthwhile building. Below is a quick – and far from extensive – overview of some of the most common misunderstandings and considerations to make.
Who Pays for Condo Maintenance?
You do! As the owner of your unit, you have to pay your share of building maintenance to upkeep your investment. This includes everything within your unit and your portion of all building maintenance and repairs.
Every year, owners in a condo elect between 3 and 7 people to be on the Strata Council. These 3 to 7 owners make common building maintenance and management decisions on behalf of all owners. One of these decisions is the total yearly building budget, which stipulates how much money is allocated to various building repairs and costs, and determines your monthly strata fee by applying the % of the building you own to the total yearly budget.
The yearly building budget takes into account all expected costs (i.e. hallway electricity, gas for the heating system, building insurance, etc) as well as a small fund for inexpensive repairs and maintenance (i.e. if a common building pipe leaks) as well as a contribution to a “Contingency Fund” for unexpected costs (i.e. if the parking garage door breaks and needs to be replaced ASAP). However, every building will have to attend to expensive maintenance costs from time to time that fall outside of the yearly budget. These expensive maintenance items are paid for by the owners via something called special levies. Maintenance items that would be paid for via special levies include a new roof, new piping, new windows, new balconies, new elevators, new parkade membrane, new exterior and more.
No condo building in Vancouver has enough money set aside to pay for major maintenance items, which is why you have to expect to pay for some expensive maintenance in a building every few years.
The requirement that all owners pay for regular maintenance (via strata fees) and major maintenance items (via special levies) is why researching the building to understand its maintenance history and future requirements is SO important. Just because a building has maintenance coming up in the next few years doesn’t mean it’s a bad building – we need to make the difference between it being age-related maintenance or issue-related maintenance, and as a potential owner in the building, you want to see a strong history of completed age appropriate major replacement projects. For example, if you’re interested in a unit in a 1970’s building that hasn’t done any exterior updates aside from the roof, then you know that the building will likely need to replace the balconies, windows and exterior soon – all expensive projects that you will need to be financially prepared to pay for.
Another scenario to consider is if you buy into a building that just completed a major, high cost repair (i.e. a full exterior renewal including new exterior, windows and balconies). After paying for an expensive special levy, many owners aren’t eager to pay another special levy anytime soon, so you might have a few years before the building pursues an expensive repair. One thing to remember is if you buy into a building that just completed a major repair, the seller will be asking a premium for the unit, so you end up paying for the repairs indirectly.
Maintenance Costs for New Condo Buildings
One of the only ways to “avoid” building maintenance costs is to buy in a new building – about 15 years old or younger – though this isn’t a fail proof method of avoiding special levies.
Every new building comes with a warranty: 2 years for fixtures, 5 years for exterior work and 10 years for structural work. If one of these items breaks during the warranty period, the Strata can pursue the Developer for the fix. This warranty work can help the Strata avoid costly maintenance, though technically, this warranty is in place to cover poor quality installations, not the expected first repair. In an ideal world, new buildings shouldn’t have to undertake costly replacement projects for years.
Having said that, if something that is not under warranty breaks or needs repair, owners will have to pay for it. Newer buildings don’t have a big Contingency Fund to cover unexpected maintenance and repairs so there is a chance the Owners will have to pay for a small levy.
I’ve also seen a lot of newer buildings levy owners for improvements to the building – for example: extra security features, more furniture for the common room, and a “Contingency Fund Top Up” where the operating budget wasn’t planned properly (the initial operating budget is set by the Developer and often isn’t good enough) and the building needs extra funds to cover cost overruns.
Types of Condo Maintenance and Repairs
Every condo in Vancouver will need regular maintenance and at some point, large repairs. A well built building can help mitigate repairs compared to a poorly built building, but every building will need maintenance and repairs to maintain their value.
Depending on how well the building is maintained, future repairs can be pushed to a later date with some minor fixes. For examples, a lot of buildings can postpone a full re-piping by installing a water conditioning system for a fraction of the cost. This won’t prevent the eventual re-piping, but it gives the owners some time to build up the funds necessary for the re-piping. Buildings with strong maintenance records, and knowledge of construction often fair better in the long run.
There are major differences in maintenance and repairs for wood frame vs concrete buildings. All buildings have the same list of standard components but the type of project used and the maintenance/replacement required can vary. Ironically, sometimes components in older buildings can last longer than new components (i.e. elevators in 1970’s buildings tend to last a long time, whereas new elevators break constantly and need to be replaced sooner… go figure).
This is a very quick overview (definitely NOT an exhaustive list) of the major repairs a building will need to consider:
- Exterior Paint and Caulking: This is typically done every 10 years or so. It’s a routine project to help prevent water ingress.
- Balcony Membranes: The surface of the balcony. This needs to be replaced to prevent water ingress into the construction of the balcony. This usually needs to be updated after 10 years.
- Roof: Generally an easy project to do, but it does depend on how complicated the design of the roof is. Roofs typically last 20-25 years.
- Piping: Pipes naturally degrade over time, especially in condo buildings where water is constantly running through them to reach each owner on every floor. Pipes typically last around 25-30 years. If units have their own hot water tanks (vs a common tank for the entire building) the pipes tend to last longer.
- Balconies: The construction of the balconies needs to be replaced after 25-30 years, which includes construction of a new balcony platform and new balcony railings.
- Windows: Windows have a lifespan. Both sun and rain affect windows and lead to them eventually needing to be replaced. Windows are an expensive project so most buildings replace windows on an “as needed” basis, expect for complete exterior overhaul projects. Windows can last 25-50 years.
- Exterior: This is a major project, and encompasses that buzzword “rainscreen” that Buyers always hear. The exterior – whether it’s stucco, brick, vinyl, wood or other – has a lifespan and needs to be replaced. The different styles of exterior make a huge difference in how long the exterior lasts and what work needs to be done but you can expect an exterior to need major repairs around 30+ years.
- Elevators: It’s a mechanical items that requires regular maintenance and will eventually break. Elevators can be expensive for small buildings since they’re the same cost if for a 4 unit building as they would be for a 40 unit building. Elevators can last 25-50 years.
- Parkade Membrane: The parkade membrane is basically the roof of the parkade. The parkade underneath the building typically extends out further than the foot print of the building, and like any roof, it needs to be repaired. This is a big project because all the landscaping and patios need to be removed, the “roof” needs to be replaced and the landscaping needs to be re-done. Parkade membranes typically need to be replaced between 30-40 years.
- Other projects can include updates to: the lobby and hallways, fire alarm system, hot water tanks, landscaping, fencing, security, amenities (i.e. pools, gyms, etc), and more.
How do we determine what maintenance has been done, what maintenance hasn’t been done and how much it’ll cost? We have to review the Strata Documents provided by the listing agent (from the condo’s Strata Council). Thankfully, there is often a helpful document that most buildings have available: a Depreciation Report.
How Depreciation Reports Help Detail Future Maintenance and Costs
A BC Strata Bylaw changed two years ago with the introduction of Depreciation Reports. These reports – often done by Engineering Companies – take stock of all the components in the building, how old the component is, when the component will need to be repaired/replaced and how much that will cost. All timelines and costs are based on industry standards so these reports are not exact and Strata’s are not required to follow any of the advice in the report. The purpose of Depreciation Reports is to give Strata’s a guidelines as to what to consider and plan for in the short term future and to prepare Owners for the expensive projects they’ll need to be ready to pay for over time. Building’s aren’t required to have a Depreciation Report so not every building will have one – but that in itself can be indicative of how well organized the Strata is. Depreciation Reports, if available, along with Strata meeting minutes, financials and other documents related to the management of the building are available to prospective purchase (via the Listing Agent from the Strata Council) to review during the purchase process.
There is SO MUCH to learn about building maintenance, and it doesn’t happen overnight. These little tidbits are learn with every property you’re interested in and every set of strata docs we go through. There’s lots to know and it’s my job to ensure you’re educated.