Personal Finance

If you were me and had to try to borrow money, what would you do?

  • Last Updated:
  • Jul 25th, 2009 1:22 pm
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Deal Addict
Feb 9, 2005
4172 posts
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ShopSmart wrote: Pitz, are you an engineer? Your suggestion to force every single condo board to hire an engineer every few years would increase maintenance fees for every condo resident. How much would engineers charge for an entire building inspection? I'm guessing it would be substantial. I'm sure the engineer types would just love for naiive people to take your advice because it means a tonne of more work and more importantly money for them.
Actually, our condo board has hired engineering firms periodically to assess our building. Granted, it was initially in the hopes of holding the builder accountable for any deficiencies they'd find. Even so they continue to use engineering firms to check up on repairs and maintenance items. Condos don't become leaky overnight (even in Vancouver) and regular engineering inspections will pay for themselves. It's much cheaper to redo the exterior caulking when the engineering firm notices it needs to be done rather than the more expensive repairs that will be needed by the time owners/tennants notice leaks and mould in their units.

As for cost, I think an inspection and producing a maintenance manual ran somewhere from 6-10k.
Deal Fanatic
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Feb 15, 2005
6795 posts
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YEG
Check your insurance policy to see if it covers special assessments. My condo insurance with AMA included $10,000 in special assessment coverage, payable/claimable every 5 years and is considered a no fault claim.

The proper type of insurance should cover not just your belongings, structure, outbuildings, etc but also special assessments. Just ask for it. A "non-profit" place like AMA or a trusted broker should be able to help you out.
Jr. Member
Feb 3, 2009
127 posts
eh....Is it allowed for condo board members to make a decision like that?
I mean, it's 20k...

And for a case like this, should they inform condo owners several months ahead?
Deal Addict
Feb 9, 2005
4172 posts
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em wrote: eh....Is it allowed for condo board members to make a decision like that?
I mean, it's 20k...

And for a case like this, should they inform condo owners several months ahead?
In my experience decisions like that usually go to a vote at the AGM and are voted on by the owners care enough to show up or send a proxy. Owners who ignore the notice of the AGM (which includes all the resolutions to be voted on including something like replacing the siding) and don't go may be "blindsided" by the results. I have my doubts that the board and president would make such a decision directly, but perhaps they could. It could also be that the owners voted to give the condo board the power to make a decision on the siding at an AGM.
Deal Expert
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Aug 18, 2005
21223 posts
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Burlington-Hamilton
em wrote: eh....Is it allowed for condo board members to make a decision like that?
I mean, it's 20k...

And for a case like this, should they inform condo owners several months ahead?
It depends on the bylaws of your condominium corp.
In some situations, the Board can do this without a vote.

However, in Ontario the condo itself CANNOT borrow money unless it has a specific mandate from the owners.
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Deal Expert
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Jun 14, 2003
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ShopSmart wrote: Pitz, are you an engineer? Your suggestion to force every single condo board to hire an engineer every few years would increase maintenance fees for every condo resident. How much would engineers charge for an entire building inspection? I'm guessing it would be substantial. I'm sure the engineer types would just love for naiive people to take your advice because it means a tonne of more work and more importantly money for them.
Hmmmm! I think under the law, the condo just has to do building inspection and finance auditing every few years (if not every year).
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Deal Expert
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Aug 18, 2005
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Burlington-Hamilton
gman wrote: Hmmmm! I think under the law, the condo just has to do building inspection and finance auditing every few years (if not every year).
Under the law in Ontario, the condo has to do a reserve fund study, which cannot properly be done without an engineer.

Also, it would be very very stupid to not use the engineering company do carry out the Tarion warranty process for the common elements, but I don't think it's legally required.

Also, the financial statements must be audited each year.
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Newbie
Jan 29, 2008
35 posts
2 upvotes
Calgary
AllWheelDrift wrote: In my experience decisions like that usually go to a vote at the AGM and are voted on by the owners care enough to show up or send a proxy. Owners who ignore the notice of the AGM (which includes all the resolutions to be voted on including something like replacing the siding) and don't go may be "blindsided" by the results. I have my doubts that the board and president would make such a decision directly, but perhaps they could. It could also be that the owners voted to give the condo board the power to make a decision on the siding at an AGM.
The law in Alberta is that the board is required to make these decisions and do not require a vote from the owners. I went to the AGM last year, nothing was said about the siding project.

Each province is different, hopefully most are not like Alberta which seems to favour only the developer, builder and management company, not the actual owners.
Deal Fanatic
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Feb 15, 2005
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So, what's the name of the building and developer? There's a few condos here in Edmonton that have the same problem.
Newbie
Jan 29, 2008
35 posts
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Calgary
rf134a wrote: Check your insurance policy to see if it covers special assessments. My condo insurance with AMA included $10,000 in special assessment coverage, payable/claimable every 5 years and is considered a no fault claim.

The proper type of insurance should cover not just your belongings, structure, outbuildings, etc but also special assessments. Just ask for it. A "non-profit" place like AMA or a trusted broker should be able to help you out.
I just checked the AMA website and their loss assessment coverage as they call it is the same as all other types of this insurance offered in Alberta. If the special assessment is levied because of damages from fire, flooding (as examples) or uncontrollable/unexpected problems that arise they will pay. There was a building in NW Calgary a couple years ago that had extensive water damage because of the way it was built, that would qualify under that coverage.

You have to look at it like car insurance - if you get into an accident your insurance covers you. But if your car starts to rust or you don't like your paint colour, your insurance won't pay for that. It is exactly the same with my building wanting to replace the siding, it wouldn't be covered under special assessment insurance coverage because it is considered a maintenance, or even a cosmetic issue. If the siding was being replaced because it was rotted or there were structural issues, even then, it would be difficult for an insurance company to justify paying out that $10,000 because they would blame it on faulty maintenance over the life of the building which is nearly 30 years. Things like siding are supposed to be maintained yearly and insurance companies don't insure things like that.

To answer your other question about the developer, I have absolutely no idea who developed this building 10 years ago, I don't even know how I would find out (a google search came up with nothing). I checked my documents I have from the condo board and the lawyer when I bought there is no mention of the company that developed it. All I do know is that my condo corporation and others in Alberta sued in the early 2000s and the developer went bankrupt.
Deal Addict
May 28, 2007
1019 posts
68 upvotes
Nowheresville
Jucius Maximus wrote: This already happens at most every condo in Ontario. Under the condominium act, they have to run a reserve fund study, and also it is critically important to get as much value out of the Tarion warranty on the corporate level as possible.


So how come Pitz was saying that that condos should be forced to embark on this idea? Are you saying this already law under the condo act? [/quote]
Jucius Maximus wrote: The condo hires engineers to do this, and it costs thousands of dollars. The reserve study is required by law, and you'd just be incredibly stupid to not do Tarion.

It is normal for condos to retain Engineering firms because sometimes you need them when you are going after the builder for this or that.

Inspecting a whole condo tower for any kind of defect takes some weeks and costs thousands and thousands of dollars. This includes all kinds of destructive testing, cutting holes in walls, etc. It is highly unusual for a buyer to want the whole building inspected by their own engineer prior to purchase. Of course, the cost varies depending on the size of the tower and such.


Wouldn't it make sense for the initial pre-construction buyers to have a conditional agreement where they can get out of the purchase agreement if the builders do not pass an engineering inspection hired by the condo owners-to-be. T

Of course these engineering firms would have to be above board and can't be bought off by the wealthy builders. I could see that being a problem...

But if this did work, this would ideally ensure that the owners are getting a building that goes above and beyond just barely meeting minimum code or getting shafted for purchasing a building that DOESN"T meet mnimum code.

I have seen newly built condos where the tradespeople left mounds of mounds of dirt/dust/remnants in behind the drywall of a hallway in a newly built condo just before they patched it up. I know it's a small detail - hardly a safety issue - but I was apalled for the people moving in. That kind of laziness makes for sick buildings. No wonder there's always a layer of weird dust in condos.

It makes me think that probably everyone involved with these builders don't care enough about the quality of their work or good name enough to push and challenge the builder i.e. people who are paying them to deliver a better building to the community.
Jucius Maximus wrote: I do have dollar amounts on hand for this sort of stuff, but I am not at liberty to post because it involves confidential contract tendering details.

Construction companies and engineers do what is requested by the builder, and that is to do the minimum to meet the building code. There a lot of crap put into buildings now due to cost cutting and wanting to do the minimum necessary. Inefficient boilers, POS door locks, plastic water piping, insufficient noise dampening on transformers, etc. The list goes on and on. The mind boggles and it makes me so angry. But it's legal and even if it leads to problems down the road, you cannot go after the builder (unless it actually meets code.)

Even if you know it is a problem from something not meeting code, actually proving that in court is no easy task. If the builder won't budge, your options become very expensive.

Do you even know how much time and money it costs to go through the law suit process with one of these things? For a major claim, it takes YEARS. I am aware of one in Toronto that took over 5+ years and $2xx,xxx in legal and engineering fees before it was over. (And this ended with a pre-court settlement, it didn't even get into a courtroom.) And this was for a major defect in the order of $1,xxx,xxx.

Making some kind of lawsuit is easier said than done, and it does not solve the immediate problem of how to fix the defective building.
The builder will keep doing unethical things unless people speak out and challenge them. Seems no one these days wants the hassle. But it's the right thing to do regardless of how long it takes. Just naming the builder will help others. People can do their research and find these people everywhere they turn. People can't do evil stuff to others in this day and age. It catches up to you much faster than before.

Our legal system is there for a reason. If someone or some company does something corrupt, dishonest or fraudulent or illegal or endangers public healthy and safety and you know about it, you have a responsibility to tell people so that they stop doing it.

A lawsuit slaps the builders on the wrist. Bad publicity. Even if they win, they're screwed for bad press.

I know that if I were ever going to buy into a condo, that's the very first thing I'd do a search for. To see if they had any bad press, incidents, etc. against the brand/company, the executives and board, any major partner associated with them, also wouldn't hurt to look into their financial statements either if available. You're talking about putting your hard-earned money in the hands of strangers. Of course you're going to do research to see if they're trustworthy.

To be honest, I would NEVER buy pre-construction.
Deal Addict
Aug 28, 2007
2167 posts
539 upvotes
Calgary
The question you asked is about getting financing. You mentioned your Dad has other property rentals so he should quite easily be able to raise a small sum like $20K for you.

The Bank of Dad has the best terms around!

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