The Homeowner Protection Office's new report Assesment of Demand for the HPO Reconstruction Program has been receiving some press coverage in the last few months and its findings indicate that the bad news for leaky condo owners is far from over.
Although leaky condos aren't making as many headlines as they did during the original 1982-1999 leaky condo crises that doesn't mean the probelm has been solved.
"Basically the report is an investigation into market inventory. Its purpose is to give the province an update on the leaky condo situation," explains the Condominium Home Owners Association's Director Tony Gioventu. "The rehab program has been underway for almost ten years and in 1999, nobody really knew how long it was going to take, how many buildings were going to be fixed or how costly it was going to be."
Many believe that this report will set the stage for what will happen next in our province. Higher priced building materials, a shortage of good and experienced trades and inflation may make repairs difficult if not obsolete over time.
A building is looked upon as suspicious when one or more of the following happen:
1. Major water penetration problems
2. Massive building repairs
3. Previous building audits or envelope inspections where the problems have gone ignored by the owners
4. Upcoming building audits or envelope inspections.
The best policy as a Buyer is to watch out for these details when purchasing a condo built within this time period. When constructing an offer where a leaky building is suspected, make sure to ask the Seller for two years of strata minutes, and strata documentation. The problems will be relevant as there will be business that comes up of this nature and the strata will vote down the repairs as a whole in Special General Meetings of Annual General Meetings. A set of financial statements should also be read by the Buyer as if the repairs to the building where voted down, the reason why should be found out. If there is no money in the contingency fund to pay for the repairs then this is also a sign.
It should be pointed out that while there where 159,000 strata units built province wide between 1982 and 1999 and out of those 72,000 suffered some sort of water ingress problems, there are condos out there that were built during this period that are a solid investment and well kept.
Key Findings of the HPO Report:
It indicates that 159,979 units province wide between 1982 and 1999. During this perod approximately 72,000 units suffered from "premature envelope failure." Other scenarios in the report suggest this number may be higher.
It estimates that only 42% of all leaky units have been repaired to date which leaves 58% still to repair.
It concludes that concrete high rises develop water problems at a slower rate then wood frame buildings and that approximately six to ten high rises, often with 100 or more units per building, are identified as leaky buildings every year.