The Costly Mistake of Deferred Maintenance

For a variety of reasons deferred maintenance is a reality in many Strata Corporations.

One of the main reasons is Owners not wanting to increase the budget and strata fees to allow for enough funds to properly maintain their Strata Corporation’s common property; roof, roadways, parkade, membranes, building envelope and other items.

With increased costs in items that council’s have very little control over such as utilities (gas and hydro) and insurance; which are often the largest line items on any budget, it appears that cuts are being made to line items denoted for repairs and maintenance. This results in roof maintenance not being performed every year, the building envelope not being inspected and maintained and a variety of other items.

When something such as a roof leak does occur, which could potentially damage an Owner’s unit and belongings and result in their unit not be habitable, Council’s are often stuck wondering how they are possible going to pay for the insurance deductible, which could be in the excess of $5,000 to $10,000 and then the actual roof repair itself. Additionally, insurance deductibles are often much higher in Strata Corporations that defer maintenance given the number of claims that arise. If Council’s do not have adequate funds in either the annual operating budget or the Contingency Reserve Fund (CRF) and Owners will not approve a special levy, repairs simply cannot occur, or resultant legal action is the costly outcome. Owners must also be aware that if a Special General Meeting (AGM) has to be called to raise funds through a special levy, that further damage may occur to common property from something such as a roof leak as proper notice must be given to all Owners for the meeting and all Owners must pay the special levy. This required delay under the provisions of the Strata Property Act may result in further damage in a climate such as ours.

Additionally, these large expenditures that result once an “emergency” happens could have easily been avoided with proper funding that would result in preventative, not reactive maintenance.

At an Annual General Meeting (AGM), I once had an Owner empathically inform me that $20,000 was far too high for the repairs and maintenance of his Strata Corporation that comprised of 180 units. Ironically, a number that Council felt was far too low, but knew that a further increase over the previous year would never be approved by the Owners. This Owner was informed that $20,000 divided by 180 Owners over a twelve month span resulted in only $9 per month or $111 per year. This Owner quickly concluded that this was not enough and understood that only the basic maintenance could be done for this amount and that no preventative maintenance could be undertaken given the funding limitations. These Owners who feel the budget and strata fees are too high are not surprisingly the ones who complain first that maintenance is not occurring.

It is essential that Council’s present a budget that includes preventative maintenance costs based on the advice from professionals such as Consultants and Engineers and that Owners approve these budget and strata fee increases to avoid throwing money at “emergencies” after the fact; far more money than they would have spent had preventive, not reactive maintenance been done.

In the case of the roof leak, minor less costly repairs could have been completed that avoided the leak and therefore the resultant large cost of the insurance claim, damage to common property and inconvenience to the affected Owners.

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