New book gives harsh lessons on the realities of condo ownership

There’s a popular bit of folk wisdom that when you’re approaching something new you should hope for the best, prepare for the worst. When it comes to buying a condominium, a new book may give you a whole new list of things you didn’t even know to be prepared for.

For instance, did you know that some super-tall high-rise buildings are subject to such high wind pressures that they can force rainwater through even tiny flaws in the waterproofing of exterior walls? According to Sally Thompson, author of Condo Questions and Answers: What you can do about the 40+ most common – and unexpected – condo problems, searching for a leak in even one apartment in such conditions can be a maddeningly expensive prospect. Workers may have to put huge fans outside apartment doors to create negative pressure inside and then people dangling from platforms hanging off the side the building have to spray water all along the surface to hunt out the source of the leak. It happens in modern buildings, according to Ms. Thompson.

Ms. Thompson wrote her book to help condo dwellers better understand the surprises multiunit and multilevel living can bring.

The book makes you ask questions like “How much do I know about my parking garage?” According to Ms. Thompson, 9 to 15 per cent of all unexpected costs a condominium will face throughout its life will come from the parking garage. And it doesn’t matter the age: Older pre-1985 buildings didn’t have enough waterproofing and that leads to structural decay, but newer buildings with better membranes can also require expensive repairs periodically.

While a leaky parking garage seems like a small problem, Ms. Thompson dissects the water-related issues that led to the partial collapse of a 12-storey condo complex that killed 98 people in 2021 in Surfside, Fla. In simple terms, after years of showing decay and distress, a section of the concrete parking deck collapsed, bringing down the adjacent living quarters. And while there was a lot of salt-water corrosion at play in the ocean-side condo, Canada is no stranger to salt (from roads). Some builders even mixed it into concrete routinely until the mid-1980s. “We have had several parking garage collapses over the last 30 years, that were eerily similar to the collapse of the Surfside garage: one in Kingston, one in Montreal, one in Mississauga and one in Windsor, [Ont.],” the book notes.

Ms. Thompson is a civil engineer and managing principal at Synergy Partners, who has since 1990 prepared studies and managed construction projects to repair the common and uncommon maladies associated with aging buildings of all types. Since the mid-2000s she’s also served on committees with condo governance organizations such as the Canadian Condominium Institute and recently became president of the Canadian chapter of the Community Associations Institute. The book is packed with ‘cheat codes’ for condominium governance, a subject almost no one understands until they find themselves owning part of a condo facing problems.

“A condominium building is intended to be renewed almost in perpetuity, almost as if in suspended animation, neither improving significantly nor degrading significantly,” says Ms. Thompson.

The book’s central teaching is of the true costs of maintaining that status quo. Ms. Thompson warns that for most condominium unit owners, their maintenance fees and reserve fund contributions have to rise every year – and faster than you’d expect.

“Fee increases at a rate above inflation are the nature of the beast, especially for the first 20 years of the life of the condo,” she says in the book. “Historically, the cost of construction projects has inflated, on average, at a rate of about 1 per cent per year more than consumer goods. This excess inflation on the construction side likely relates to the fact that construction is labour intensive and can’t be offshored the way consumer-goods manufacturing can be.”

It doesn’t matter if your building is new or old, those fees are almost certainly going to rise, and in Ontario those reasons were “hard wired” into the province’s condominium legislation in 2001. Simplified, the first condo reserve fund for a newly completed building is calculated at 10 per cent of annual operating budget. Ms. Thompson says that number is almost always too low, requiring increases of reserve fund contributions by individual condo owners to triple in the first years after completion.

“Too-low first-year reserve fund contributions, the 30-year planning horizon and the falsely low first-year operating budget” all contribute to new buildings starting off in a financial deficit that can take years to show up for unsuspecting residents unaware of the true costs of maintaining high-rise buildings. “We’re tricking young people into thinking their condo is more affordable than it really is,” said Ms. Thompson.

If you’re in a new building with a mandate from the condo board to keep fees low, recognize you could be putting the building into serious debt against its future needs. That can result in a punishing one-time special assessment fee of many thousands of dollars when the proverbial stuff hits the fan.

The type of building can lead to dramatically different cost estimates: “Where a 30-storey building with 200 units might need to plan to spend $5- to $10-million to replace its windows, a 200-unit supertall [50 storeys or more] building might need to plan to spend more than $20-million.”

Over the years Ms. Thompson has seen good buildings and bad buildings, great boards and so-so boards. But when a major mechanical or structural issue needs remediation, the question of how to pay for it can fray the bonds of any condo community.

“What’s the saying, money is the root of all evil? Every time I see a condo off the rails it’s about money,” said Ms. Thompson in an interview with The Globe and Mail.

She’s often asked by friends to give her professional opinion of a building they are looking to buy into, but most are not ready to hear about the average lifespan of a boiler or air conditioning unit.

“I might say there’s a lot of financial risk here, and they say ‘But the view is so beautiful’ and they buy it anyway,” she said.

All in all, given the complications in the industry, she’s reluctant to offer a blanket endorsement of condo ownership.

“For a lot of people, it’s their only choice. The thing is to go into it with your eyes open,” she said.