COVID-19 & Your Condo Fees
Updated: Aug 3, 2020
To say that COVID-19 has disrupted the world and affected all of our lives, would be an understatement. I have been taking time to speak to Owners and Residents, and have really appreciated everyone's participation in the "Share Your Story" project - which I encourage everyone to read or participate in.
I know that everyone feels it in some way or another, and that way is often financially. The Government of Canada launched several options to assist Canadians who are facing financial difficulties, such as the “Canada Economic Relief Plan (CERB)” and the possibility for banks to defer mortgage payments for up to 6 months.
Unfortunately, the Government has not provided any relief for condominiums, neither as Corporations nor as Owners, at this time.
The Budget put forward for the 2020-2021 fiscal year, which was recently sent out, does not include many “wants”, but focuses on the “needs”, including (but not limited to):
Utility bills ($70,000 monthly).
Insurance ($12,000 monthly).
Regular maintenance and management contracts ($78,200 monthly).
Three-Way Shared Facilities contributions ($9,000 monthly).
Mandatory Reserve Fund contributions ($54,000 monthly).
TOTAL MAJOR MONTHLY OBLIGATIONS: $223,200.00 monthly.
During this time, all of our regular on-site services are considered “essential”, and remain open to Residents to use in a manner that respects social distancing for the sake of everyone’s health and safety:
Security staff are still on site 24/7,
the Superintendents are working their full-time shifts (and focusing much of that time on extra cleaning of the Restricted Access spaces),
the Cleaners are working their full-times shifts and overtime as needed to keep the building as sanitary as possible,
Property Management staff are still tending to regular Corporation matters and are available by phone and email during the regularly scheduled days and hours, and in-person, by appointment when necessary.
The amenities are closed to Residents; however, the closures represent an insignificant “savings”, as our amenities have limited carrying costs (which is a good thing during normal times!). It is also a significant loss to the Corporations’ budget that we don’t have any income from the Party Room, and anticipate drastically reduced income from the Guest Suite, if any. All in all, the “savings” from amenities such as the Pool and Fitness Facilities are overshadowed by the lack of income from amenities such as the Party Room and Guest Suite.
“Savings” from amenity closures: $300 monthly (pool and fitness room contracts paused).
Lost income from the Party Room and Guest Suite: approximately $1,450.00 monthly.
Overall, the lost income for the closure of amenities is nearly 5x more the savings that the closures have allowed.
We expect some higher costs, such as:
Additional and rising costs of cleaning supplies and sanitization,
Increased utility bills and waste removal bills as more Residents stay home, such as:
a higher volume of water and hydro for the equipment that heats and distributes it to consistently run, as well as water and hydro related to the building’s heating and cooling that supplies the in-suite HVAC units,
more waste and recycling disposed of.
Likelihood of more repairs needed due to more people staying at home (ex: plumbing for sink back-ups),
increased wear-and-tear maintenance on elevators, due to increased usage from the 2-person capacity rule,
Likelihood of increased costs for labour and supplies, as contractors and suppliers become more limited due to closures.
Our research has demonstrated that, overall, we will likely see a net increase in the operating costs of the building; however, at this point, we do not anticipate that these costs will be beyond the capabilities of the current budget. Our plan is to rearrange and prioritize these costs over any items that may not be immediately required, and we believe that doing this will offset any anticipated increased costs for the current fiscal year budget. It is important to also understand what savings and costs mean compared to the overall budget: approximately $30,000 has a 1% influence on maintenance fees under the current budget. This means that:
In order to decrease maintenance fees by 1%, the Corporation would need to save approximately $30,000.
In order to increase maintenance fees by 1%, the Corporation would need to over-spend by approximately $30,000.
As you can see, it takes a significant amount of money to make even a small difference for maintenance fees, which is why maintenance fees are most affected by big-ticket items such as insurance, utilities, large service contracts, and capital repairs/projects. Please be reminded that the current fiscal budget was built around heavy trimming of non-essentials, with a focus on replenishing the Reserve Fund.
It is our hope that the Government will consider a method of extending relief to condos (as Condos make up over 1.3 million homes in Ontario - and that number is consistently growing!), so that we may pass on proportionate relief to our Owners.
Therefore, we expect that the essential and pandemic-related costs of the Corporation will add significant costs, while any savings from the amenity closures would be insignificant, therefore netting in an increased cost to the Corporations’ expenses. While we would have liked to be in a position to voluntarily offer relief to Owners, doing so under the current budget would be irresponsible as it would be detrimental to the overall health of the Corporation, on which all of us Owners rely on to protect the value of our homes. We are grateful that we anticipate that the current budget can carry the additional costs foreseen at this point in time. As such, we do not expect to have to increase maintenance fees.
Your Board and our on-site Management Staff will be keeping a close eye on any relief that the Government may propose, as well as the results from lobbying that many Condo Law firms have undertaken, and we will happily share them with everyone when/if available.
In the meantime, should you have any questions, please do not hesitate to reach out to Property Management via email.
All the best,
Andreea Birloncea, President
On Behalf of the Board of Directors
Of Emerald City One - TSCC 2368
Edit (August 3, 2020):
This blog post is relevant to the Requisition Meeting of August 28, 2020.