Distressed Condo Owners – “So many owners have spent all but their last dime buying the place. Some already spend half or more of their income on mortgage payments and strata fees. The special assessment was defeated because more than half said they couldn’t afford it.”

“It’s often difficult to get the majority of owners to agree to the appropriate monthly fees to cover ongoing maintenance, operation and replacement.
It’s difficult because so many owners — especially in the Lower Mainland — have spent all but their last dime buying the place.
But it only gets worse as buildings age and expensive repairs become inevitable. The Condominium Home Owners Association of B.C. estimates that 10 per cent of the province’s condos are now between 30 and 45 years old and in need of major renewal.
Some are in such disrepair that owners are openly discussing how to liquidate the strata corporation so they can sell the property for redevelopment.”


“Until 2009, big-ticket repairs such as replacing plumbing, decks, windows, elevators, roofs and renovating common areas had to be financed through special levies, which require approval by three-quarters of the owners at a general meeting.
They’re difficult to get passed.
Some owners are tapped out, with some already spending half or more of their income on mortgage payments and strata fees.
There’s also a cultural gap, Tony Gioventu, CHOA’s executive director, says.
“It’s a foreign concept for some ethnic groups to repair and maintain buildings … There are some specific ethnic groups who will run a building to failure rather than maintain them to longevity.”
He declined to name the ethnic groups.
There is also an increasing number of owners on limited pensions.
Gioventu cited a recent case where the mainly retired owners in one North Vancouver condo all agreed that balconies and decks in the aging building had to be fixed. But the special assessment was defeated because more than half said they couldn’t afford it.”

– from ‘Condo life is rife with conflict’, Daphne Bramham, Vancouver Sun, 26 Oct 2012

More stories of people who can’t afford their own homes.
– vreaa

67 responses to “Distressed Condo Owners – “So many owners have spent all but their last dime buying the place. Some already spend half or more of their income on mortgage payments and strata fees. The special assessment was defeated because more than half said they couldn’t afford it.”

  1. “It’s a foreign concept for some ethnic groups to repair and maintain buildings … There are some specific ethnic groups who will run a building to failure rather than maintain them to longevity.”
    He declined to name the ethnic groups.”

    I bet it is the Chinese and the East Indians.

    (It is a statement based on my experience, so please, spare me the racism crap)

    • Increasingly Bitter

      Do not generalize a whole group of people just based on some experiences you’ve had. Then I can generalize on the what ethnic groups like to dominate in the strata, abuse power, puff their egos, hire friends to win the contracts. You will find people of Chinese and East Indian who do take care their properties.

      • Rusty is a sociopath

        IB,

        To borrow a most annoying turn of phrase; “In my country…” it doesn’t matter whether a person is poor – they still have rights and the system is in place to protect those rights. I am just curious if you are blaming the victims here – would you like to tell us your position on rape babies next?

    • Increasingly Bitter

      This racist comment should be deleted. It’s offensive and ignorant!

    • 4SlicesofCheese

      How did you experience this? You have seen a building run to failure by Chinese and East Indians?

      I think a lot condo owners these days want to pay as little as possible for upkeep. not cause its their ethnicity, but because they simply cannot afford it.

      • Agree, Cheese. Affordability is a huge issue and we need to keep in mind that different cultures place differing values on savings. We recently learned through a CashnetUSA study that “23% of all Americans have less than $100 in savings to cover any emergency expenses, and 46% have less than $800.”

        http://www.zerohedge.com/news/2012-09-25/half-americans-making-under-30k-have-less-100-savings

        This was a stunning finding but seems to be in line with what we might expect in a consumer driven society with a well established safety net. A country very much like Canada. Third World and developing nations citizens actually fare much better where savings are concerned and even those we consider seriously impoverished keep more money on hand relative to their meager incomes. Running out of money is simply not an option in many countries and I have known people earning but a pitiful dollar a day to have two years income saved for emergencies. I had relayed the study results to friends in Africa and they were simply stunned by the survey. They had always assumed all Americans (and Canadians by default) were rich. At least compared to them. My point though is that some people from other nations will not budge on spending if it impairs their savings and that this virtue is a very strongly ingrained cultural attribute. Our own “spend for the moment, more money will come” attitude is often at odds with people from different countries who might rather let an asset decay than deplete their rainy day fund. Maybe we could all learn a little something from them before we cast stones.

      • I agree, it’s not necessarily an ethnic thing. It actually seems to be a Lower Mainland thing in general, don’t do any maintenance on your house and in 20 or 30 years sell to a developer that razes it and starts over. Or don’t do any maintenance and in 10 years sell it with the original aluminum-framed, single-glazed windows, cracked stucco and overgrown yard. Even looking on MLS you can see people put all kinds of money into the inside of a house — floors, kitchen, bathroom, central vac, hot tub, paint, carpets — but they do very little if anything with the exterior. Nothing mentioned about roof, furnace, windows, gutters, water heater. Again, like the post above, just my observations…but this is an “anecdote” archive.

        This is a bit OT, but when we went to turn on the furnace for the winter a few weeks ago it turned out a valve had given out, so landlord sent the furnace guys to come and replaced it. The guy said the furnace was vintage 80s, probably very inefficient. We asked what a furnace would cost and he said $4,000, $5,000. We’re like, “That’s all?” The way people talk I thought it was 10 or 15K. They say you should be putting away $300 to $500 a month for maintenance (1 to 2% value) on your house every month. I mean, I couldn’t afford to do that if my mortgage was $2,500 a month, but it really didn’t seem like a lot to replace a furnace if you’ve paid half a mill for a house.

      • @Farmer “cultures place differing values on saving”

        There is a compelling argument from Pettis (and others) that high savings rates are a necessary consequence of developing world growth models focused on investment. Savings must be high because consumption is low. Consumption is low because, unlike western nations, low or negative real rates in Asia increase, not decrease, savings rates. The mistake I think that’s made is to translate a savings pattern built for Asian-style economic growth models (high investment as % of GDP) to North American savings patterns that are more consumption focused with more mature infrastructure.

        Or it can be put more plainly: saving by investing in poorly-yielding assets is giving away money. In Asian economies this is regimented by offering few investment opportunities outside of property and savings accounts. In North America there are significantly fewer restrictions. Despite all the grunts and groans around the US economy it doesn’t hurt to look at how its stock market has done since its nadir in 2009.

        I think it’s a mistake to think that savings is primarily a cultural issue; more likely in my view they are necessitated by economic realities and maintaining those habits in a different ecosystem is a de facto tax.

    • Hmmm… [NoteToEd: Either ReallyDedicated Building’Supers’…. and/or VeryConcientiousStratas with a FabulousReserve… or maybe they’re just lightly used Holiday/Investment Properties???]

      http://tinyurl.com/9tunbat

      http://tinyurl.com/8gbwmd7

    • “please, spare me the racism crap”

      An odd statement from one not bothering to “spare”.

  2. OT but bit.ly/Vrjpoo “Lamborghini owner complains about $568 fine, can’t afford insurance”

    • To riff on Increasingly Bitter’s comment, do you ever notice the media studiously ignores reporting on who is driving these cars? Even the story on the idiots streetracing down Hwy 99 which showed the fools all picking up there cars from the impound lot steadfastly ignored their background. Frankly, the story of how 19 year olds with their New Driver stickers came to own Aston Martin’s would have been a far more interesting piece of investigative journalism.

      • Increasingly Bitter

        There are rich or not rich, young or not young, risk-seeking ignorant people everywhere that street race. Give me some facts not your limited perception and what the media chooses to report.

      • Increasingly Bitter

        WTF does this post have to do with RE?

      • Increasingly Bitter

        If you went to rich areas of the USA, Russia, Middle East, Brazil, then who would you be riffing on then?

      • Rusty's trolling technique and road etiquette tips

        U mad?

        The other day I got in front of a black Maseratti Grantourismo with an “N” on the back – he tried to escape the unnoticeable box but it was too late, bus > maseratti …slowed him right down to 15kmh so he couldn’t weave anymore, from brentwood to gaglardi – my work here is done. I will not comment on his ethnicity, suffice it to say, he was not pleased at being reduced to pleb-speed. His Prada glasses steamed up with rage and the spikes in his hair fell down. I saw tapioca balls flying out the windows. I know i can wrap my thumb and pinky around his wrist.

        Little boys should not be driving 434 horsepower cars over the speed limit in traffic – regardless of cost, it’s the excess power and lack of skill, experience and respect that will cause problems and fatalities. Most responsible parents make sure their kid’s first car is a shit box clunker or a Volvo or a giant box with 13 airbags, not something with 19″ 8 piston calipers, yknow because it can hit 300kmh – it’s worse than a gun in the wrong hands. A gun pointed at our fellow taxpaying citizens on the road. Now the ultimate sin should be the fact it was an automatic transmission.

        Am I calling these parents irresponsible? Yes. Will the legal system hold them to account when one of these “slushbox exotics” takes out a family in a minivan one day? One would expect so, but that be labelled racism, too.

        I am sure he’s seen worse – no one likes conspicuous consumption (especially when it’s endangering everyone else) I make no acknoweldgement, just another oblivious caker, right? Singing along to the radio makes it funnier. Must be on drugs! My schadenfreude is more satisfying than all they ambien, adderal, MDMA and ketamine I see these exotic drivers huffing up their septums at after hours parties in vancouver – yeah I’ll steal your watch next time I see you slumped over in a corner, you sloppy, directionless decadents.

      • Increasingly Bitter

        Rusty, just a wee mad! Who can stay sane in this crazy out of touch real estate farce!

  3. It’s like watching a Coronation Street, wondering how whathisname is going to break it off with whomever. It’s going to happen, I just don’t know how. It’s just a matter of how miserable their lives get before it ends.

  4. You can’t afford your condo? Simple, sell it! Are you underwater? Simple, leave it.

  5. 2300 kingsway is no where near sold out. Rennie & Associates have 65 units listed for sale on their website. There are several on Craigslist as well too. This is the end on the condo boom.

    http://www.rennierealty.com/vancouver-bc-developments/113-2300-kingsway

    • 4SlicesofCheese

      Odd, the giant billboard on site has a 9 units left sign on it. The 9 sign covered the previous I believe sign of 11. Would be nice to update the 9 to 65.

    • 4SlicesofCheese

      I just clicked on a random listing.

      “This is your opportunity to purchase at this sold out development.”

      1204 – 4888 Nanaimo Street, Vancouver (Vancouver East) Interested in this listing? Contact Rennie
      Share This | Add To Favorites
      $388,000 | 2 bed | 699 sf

      2 Bedroom suite with Spectacular North facing Mountain VIEWS. Highly sought after 2 bedrooms centrally located at the corner of Nanaimo and Kingsway. This 699 sq/ft 2 bedroom is efficiently laid out with cheater ensuite bath. The finishing includes: Warm laminate wide plank flooring in living, dining, kitchen and entry areas Composite stone slab countertops and backsplashes GE stainless steel appliances including deluxe gas cooktop/range Halogen recessed pot lighting Large Island for more prep space $4000 Credit AVAILBLE TO BUYER – Comes with 1 PARKING and 1 STORAGE This is your opportunity to purchase at this sold out development.

  6. How much does it cost to fix an earthquake damaged condo?

    • Same price as a fleet of dumptrucks, a demolition crew and a backhoe to fill the hole. The junk that has been built in the rush to capitalize on the housing boom will most likely all fall down.

  7. Are the future of condos in Vancouver the same as some condos in Toronto? There are alot of condos around $100,000 and less there but the strata fees are skyhigh astronomical close to $1,000/month …. yikes! Maybe someone can shed light on the Toronto market? I don’t think I’ve seen anything like that here …

    • I watched a special on CBC about this exact topic. All the condos you mentioned are in need of enormously expensive renovations overall, and the people living there cannot afford to do so.

  8. I think I recall Don Gioventu a few years ago complaining that the strata laws here didn’t require any contingency fund to be built up, making huge special assessments a certainty at some point. “Ticking time bomb”, he called it.
    Low monthly fees are a good selling point, no presale buyer intends to still be there when the big-ticket repair shows up, so what’s the problem?
    Ontario does require a contingency fund to start growing from day one apparently, no details. Worthy of a bit more investigation, perhaps?

    • That was recently changed. Strata need to state their contingency fund or state explicitly they don’t have one. To a buyer in this market the latter should elicit discounts.

    • The contingency fund in BC is set to be no less than 10 % of the operating fund by the law. The problem is that the property bubble as a side effect has driven the cost of the renovations in the same disproportionally manner much faster than the inflation rate as the cost of new construction in BC – they are the parts of the same industry with the same labor/materials used (also affected are the municipal and provincial building and renovation projects when sometimes the special funds that were created to fund the new hospital for example will not cover a half of the planned project when it is due to start so indirect effect of the property bubble is felt by all regardless that they are not on the market to buy or sell).

  9. A large number of “slumlords” (for lack of a better term) over the last few years have been sued and fined for failure to maintain rental properties here in Calgary. And, yes, they are members of the two aforementioned ethnic groups. Is stating facts racism ?……….of course not. Do I look at my Asian and East indian co-workers and friends differently because of this ?………of course not. Recognize it for what it is, a cultural fact. I am sure that there are a large number of things that other folks say about caucasian males like myself, and to hear them would not make me wince one little bit, because 98% of them are probably accurate. Big deal………..grow up IB.

    Having said that, the condo we rent has just had another large special asssessment levied according to our landlord. That’s a $14K cash call in 12 months for a one bedroom………and according to him at the last condo board meeting it was announced that 25% of the owners hadn’t paid up after the deadline was extended, and that the owners overwhelmingly voted to have the board take legal action as per the condo bylaws for recovery of the outstanding monies. Thats’s 25% of 250 units that cannot, or will not pay………FWIW……..the two bedroom places need to pay $20K…………

    And, no, our rent is not going up……..

    • Increasingly Bitter

      Being cheap and cutting corners is not limited to an ethnic group. If you want to keep you eyes and ears closed, and only remember what you want to remember than that is your ignorance. For every slumlord of Asian and East Indian descent, I can find you one of another nationality http://redcedarlaw.com/2011/07/01/vancouver-city-council-approves-taking-action-against-slum-landlords/

    • Increasingly Bitter

      What if you went to live in a country where there are no Asians and Eas Indians? Will there be no slum landlords?

    • One problem in Calgary, or any other construction boom, is that the ‘builders’ were typically 17 year old kids slapping up condo’s with no idea about actual technique or standards.

      Whatever you do, don’t drive by the building between the time you bought and the time you take possession. It will probably give you nightmares for the rest of your life.

      A bunch of my colleagues have been hit with expensive “special assessments” that they can’t afford. Typically these hit within about 5 years of completion, when the building starts to fail from minimal use. Most of these people have just taken out a line of credit and dug a deeper hole for themselves, not realizing that there will likely be more problems coming along shortly.

      • UBCghettodweller

        A relative of mine who does very fine woodwork now (think super rare wood one-off kitchen tables and matching chairs for multimillionaires) and was a housing carpenter during the early 90s said that out of the ten or twenty places he and his wife viewed in Port Coquitlam, he couldn’t find a single one where stuff had not been noticeably half-assed or done obviously below code.

      • Carioca Canuck

        The building where we live is 7 years old and the contrctors that checked out our suite told us that the issues were all related to poor construction practices. In laymans terms, floors, windows, flashing and insulation were not assembled correctly.

      • Speaking of shoddy renos, read how its affecting one strata in a creme de la creme neighbourhood:
        “The owners of 650 – 16th Street have applied for a zoning amendment so that they may address life safety and building code issues related to unauthorized balcony enclosures that have occurred over time.

        “Westshore Place” is a 17-storey high rise residential building with 64 strata units that was constructed in the 1970s. Over time, balconies have been enclosed and weather walls (with sliding glass exterior doors) were removed most often without building permits”.
        http://westvancouver.ca/Level3.aspx?id=40720

    • Increasingly Bitter

      I think this is more the sign of the times where we have increase in social decay resulting in negative feelings and actions. Increase in love of money, reduced importance of other values, the rich get richer, middle class getting squeezed, house price and living cost inflation causing increase work and stress, cheap credit and people over leveraged, the list go on and on and the easiest thing to do than take responsibility and be patient and accepting is to point fingers and blame anybody, another ethnic group etc.

    • meh… am east indian and i dont mind racist generalizations, even about east indians.. its just that slumlords being of asian or east indian ethnicity is a wrong generalization. Average spending habits is another matter. I believe east indians would be damn stingy about upgrades to their own house.. but when it comes to wealthy landlords, they are all the same irrespective of ethnicity. I suspect the main reason for this is that there is high correlation between lack of commonly accepted sense of ethics and morals and how wealthy a person is.

  10. So much for the new urbanism…
    “Meanwhile, Swedish planners so overbuilt multifamily housing that, since 1995, they’ve had to demolish 20,000 units, and many more wait to be torn down. The apartments were built as part of what planners called the “million programme,” in which a million dwellings were to be built in the 1950s and 1960s. About 110,000 of these units were built in three- to eight-story apartment buildings during the 1950s and 1960s. They were so uniform and boring that, in 1971, people took to the streets to revolt against government policy and demanded the right to build and live in single-family homes. As a result, where before 1970 three out of four dwellings built in Sweden were multifamily, after 1970 three out of four were single family. Here are some photos of apartments waiting for demolition.”
    http://ti.org/antiplanner/?p=7027#more-7027

    • From the comments in the linked article:
      “There is more that the “density” utopians need to be made to answer for. How do the growth-restrained high-density cities that they love, compare on average trip-to-work times? This is a far better measure of efficiency than the invalid ones they like to use. Well, London and Stockholm are among the very worst anywhere in the OECD, and I do know that the UK’s cities are mostly far worse than cities of comparable size anywhere else.
      There are 2 basic reasons for this. One is that congestion is higher. The other is that when all the housing is inflated in price, increasing numbers of households have to make “trade-offs” in terms of what they can afford, not just for size of home, but for efficiency of location. Peter Hall et al in the 2-volume report “The Containment of Urban England” way back in 1973, noted that the practical effect, besides relentless housing unaffordability, was longer average commutes.
      So where are the “benefits” alleged from pro-density “planning”? The advocates should not just be sacked from any influential positions they hold, for their sheer incompetence, they should be prosecuted for malice as well. Other attributes of housing that the lowest income people end up sacrificing besides “space” and “location”, is age, condition, quality, and amenities. It is no surprise that some medical studies are starting to suggest that the strong link between lower incomes and poor health outcomes in the UK, is the housing that people on lower incomes are forced by necessity, to live in. The higher housing costs are, the worse this will be.”

  11. vancouver and it's racial issues

    I’m shocked that Tony Gioventu, CHOA’s executive director would racialize the problem.

    What race were these people:

    Gioventu cited a recent case where the mainly retired owners in one North Vancouver condo all agreed that balconies and decks in the aging building had to be fixed. But the special assessment was defeated because more than half said they couldn’t afford it.

    If you are going to bring race into it go all the way, otherwise just leave it out. Otherwise you risk being accused of a bigot, and rightly so.

  12. It’s those damn immigrants. No wait, it’s those damn old people. Or maybe it’s those entitled young folks. Or those shrewd women. Or those rich gay couples. Or DINKs. Or… (insert scapegoat group of choice here).

    • Clearly, TCG…. it’s those MendaciousMoldovanMidgets!

      http://tinyurl.com/9jobbpa

    • Actually terminalcitygirl, it is all of the above and it illustrates the pitfalls of condo ownership. But attempts by some posters to ringfence one group off from discussion does nobody any good.

      • Trust me on this, AlbionEarth… It’s an A**Hole thang… Not an EthnoCultural thang. I have ‘SterlingBonaFides’… for what little those be worth these days…

        However tempting it may be to posit MonoLithic CulturalConformity… it’s a dangerous cognitive error.

        Somewhere in the DustyDungeons ‘o this DigitalDiscourse is a Diatribe/Monograph – by yours truly – addressing that very topic…

        Something to do with the fabled EisenhowerMemorialToilet and a ForeignExchange student…

        [NoteToEd: I pulled the chain twice. Naturally.]

  13. A little case study in stereotyping. One afternoon stuck in traffic on Highway 1 I was in the car with my husband and decided to amuse myself by “profiling” the drivers around us. I would guess their age range and race based on the car they were driving. As we passed each car and I got a look at who was driving it was ridiculous how wrong I was and the further off, funnier it was and the harder we laughed. The stereotypes were, if I remember right, 100% wrong that day and probably most days.

  14. Increasingly Bitter

    Pretzels, I don’t understand cow talk — all hat no cattle.

    IB also stand for Irritable Bowels!!

  15. Have anyone thought that delayed maintenance might be the right choice? If you spend say $200K on buying a 30 year condo. You face the options of either run the building to failure with a cost of say $50K over the next 20 years, or spend $250K to do proper maintaince over the 20 years, what would you choose? I would chose the $50K run to failure option. The reason is that the proper maintenance route would cost us $450K and in the end I will still be living in a 50 year condo which no one would pay top $$ or even want to buy. Frankly for that money, I would probably just buy a new condo instead. So running the building to failure may not be a culture believe but rather that rational choice. Maybe that’s what the author don’t get. Some people actually look at the final cost and figure run to failure is better option for them, rather than just throwing huge amount of $$ to the renovation companies and contractors and line their pockets as good sheeples.

  16. Caarioca Canuck

    Mathematics have this unique way of colliding with provincial laws regarding the definition of a “dwelling unft for human habitation”……….

    Perhaps if properties today were BETTER BUILT without obsolescence as a part of their design we might not be having this discussion.

  17. Pingback: Distressed Print Pocketed

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