# How often do Condo Special Assessment Fees occurr?



## techcrium (Mar 8, 2013)

Any condo owners who can weigh in on this? What was it like for your property?


On average how often do Special Assessment Fees occur? Once every 10 years? Once every 5 years? etc?


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## Cal (Jun 17, 2009)

Depends on the property....the one I am currently in, 15 years and no special assessment.


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## Davis (Nov 11, 2014)

Special Assessments are, by definition, special, and not predictable. You are kind of asking how much you will have to spend on car maintenance without specifying whether you're talking about a 1985 Plymouth Reliant or a 2013 Ford Fiesta or a 2015 BMW.

Your mileage might vary.

New building? Old building? Large reserve fund? Inadequate reserve fund? Good state of repair? Bad state of repair? Talk to your condo board and a real estate agent who specializes in condos to get better information on your particular building.


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## GreatLaker (Mar 23, 2014)

In a well built, properly managed building they should be very infrequent, if they happen at all. My building is 14 years old and has not had one. If you own a condo you should get a summary of the reserve study every 3 years when it is done. If you are thinking of buying, get the status certificate. (For Ontario condos anyway. Not sure how it would work in other locales.)

Here are a couple of relevant links:
http://www.thestar.com/business/2015/02/13/the-real-costs-of-maintenance-fees.html
http://millerthomson.com/en/publications/newsletters/mtcondolaw-ontario/april-2015/mt-condominium-group-responds-to-toronto-star

The Board is responsible for maintaining an adequate reserve fund, but many are reluctant to raise fees, especially on older buildings.


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## kcowan (Jul 1, 2010)

The size of the reserve fund will determine the frequency of specials. A big reserve might mean you are paying too much a month.

(Of course, disasters like leaky condos always require a special.)

The useful life of glass-sided condos is between 15 and 20 years. Then the building envelope will need serious attention.

The useful life of copper plumbing is 30 to 35 years, so that is another special for older construction.


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## AltaRed (Jun 8, 2009)

CBC's 'Doc Zone' has a documentary 'The Condo Game' on its website that every high rise prospective (and even existing) condo owner should watch. It's a bit dated but there can be (and are) major horror stories on high rise condos. 

Not only are high rise condos very expensive to repair, but condo boards are way above their pay grade in managing such buildings AND even if they hire a property manager firm to advise on operations and maintenace, almost anyone who can walk and talk at the same time can put their shingle out as a 'property manager'. IOW, a crap shoot.

I would never own a high rise condo. It would be limited to a <100 unit townhouse type development that behaves and acts more like houses in terms of ops and maintenance. Problems are also more visible than the complexities of high rise buildings. I echo the comments that critical reading of Board minutes of meeting, AGM minutes of meeting and the latest Reserve Study are essential prerequisites to purchasing a condo. There should rarely be a need for a Special Assessment if the reserve fund has kept up to the Reserve Study recommendations


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## nathan79 (Feb 21, 2011)

I've owned my condo for 12 years and there have been three assessments totalling just over 2K. My building is 24 years old now, so I'm expecting some bigger ones in the near future. I have a feeling we've been kicking the can down the road a bit too long.


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## lightcycle (Mar 24, 2012)

We lived in a 30+ year old building which kept the maintenance fee artificially low to facilitate resale of the units. The reserve was inadequate to cover extensive repairs to the roof and heated ramp leading to the underground garage. Estimate probably around $3K in special assessment fees over the last decade.


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## Westerly (Dec 26, 2010)

We're in BC. Have owned a condo as rental for 5 years and have paid 2 specials of aprox $1500 each - landscape drainage issues and now painting. The strata now has a depreciation report detailing the expected costs over the next 15-20 years. I expect this to continue and am not entirely upset by it. We'll do elevators over the next year or two, perhaps $1,000 each. . 1980s building, over 70 units. That said, paid $245K plus legal, could sell now for $220, closing costs $10K, mortgage has decreased $20K. Our saving grace has been the interest rate @ P-.8. Just resigned @ p-.6 and valuations appear to be headed back up.


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## ShannonC (Nov 16, 2012)

I own a condo and it just came out of special assessment. It was built in 2003 and I believe it was the first one that's occurred (I've only owned for 6 years). It was just under 10k per unit... so a big hit. They didn't have enough support for the underground parkade ceiling, so they had to add numerous more support beams.


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## Just a Guy (Mar 27, 2012)

This is why, when you buy a condo, it's important to join the condo board. In my experience, they are always looking for members. I'm on the board of every condo I own, so I wind up at a lot of meetings (if you only own one, it's not so bad), but I also can ensure the property is properly run. If you set up the condo fees properly, you'll never have a special asssessment. Money will always be there to cover the expenses. The problem, as others have noted, are when the funds are insufficient or misspent. Many people think low condo fees are attractive to buyers...in reality, it's a sure sign you'll be hit with multiple special asssessments. 

He other problem is owners who think of the reserve fund, or condo fees, as "free money" to be spend without regard. It's not, it's money out of the owner's pocket. If the latch on your screen door breaks, you can fix it yourself for under $10 or, as many condo owners seem to think, they can have the condo fix it for "free". In reality, the condo has to hire someone to come out and fix it, paying them an hourly wage, plus parts...a lot more than the $10...which comes out of the fees you pay.

Personally, as an investor, I prefer special assessments, since I can usually put my money to work instead of having it sit in the condo's bank account and condo boards can go a bit "spend happy" if they think they have a lot of money, but I always vote to have places properly funded.


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## Cal (Jun 17, 2009)

Good advice^

I would rather be involved in the process as well.


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## fraser (May 15, 2010)

My parents owned a condo in Burnaby, BC for 25 years. No special assessments during that period though my understanding is that there was an assessment in 2008/9- a year after they sold.

A colleague in Burnaby had a leaky condo assessment of $100K It has caused him to work several years past his anticipated retirement date.

We rent a 9 year old condo in Calgary. We moved in as remediation work was just finishing in the building. The owner of our 1300 sq. foot condo was assessed $30K two years ago just before we moved in (plumbing/leaky pipes). Another assessment was recently made on the unit for $5K. We decided against buying into this development. I believe these two assessment ate up 3-3 1/2 years of return on the unit.


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## banjopete (Feb 4, 2014)

I'm in a heritage building in Edmonton and have been here for 5 years, it was converted to condos 8 years ago, in a 50-ish year old building. After many delays of reserve fund studies and board members with ulterior motives to building maintenance we're now rolling into our first special assessments to make up for insufficient past funding of the reserve fund. We're in the smallest suites in the building of the 7 different layouts and are expecting to pay around $20k over 5 years is what's coming out of the meeting minutes. We've still not heard an official number but I suspect there will be some upset neighbours as we're paying on a unit factor and there are suites that are much much bigger than ours.

This is all new to me and we're in the midst of deciding to rent or sell this unit while all this is going on. It will be interesting to see how a future buyer considers it given that this first year's assessment is in the books so to speak but not the remaining year's one's yet.


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## kcowan (Jul 1, 2010)

I have a friend who bought a leaky condo and scrutinized the HOA meeting minutes and there was no mention of any problem before she bought. But she bought from the HOA President who had suppressed any mention of the repair estimates from the HOA Minutes. Beware be very aware!


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## Charlie (May 20, 2011)

I worked with a few strata organizations during the leaky condo crises, and it was common to understate/suppress problems in the minutes. Council did not want to affect resale values! Lots of 'good' investments turned bad.

I think they've addressed some of that in BC with the mandatory depreciation and engineering reports -- but it's good to be weary. Older wooden building will need work. The hit on a smaller complex can be proportionally higher. Buying an older condo is like buying an older car. When was the piping/elevators/balconies/etc last replaced? 
'


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## CharlesF.Donahue (Jan 7, 2015)

> I have a friend who bought a leaky condo and scrutinized the HOA meeting minutes and there was no mention of any problem before she bought. But she bought from the HOA President who had suppressed any mention of the repair estimates from the HOA Minutes. Beware be very aware!


Yes, exactly it happens. We need to search about all things first after that proceeding further.


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