The three-bedroom condominium unit at 40 Panorama Ct. has everything a prospective owner on a budget could hope for – en suite laundry, two washrooms, an eat-in kitchen and access to a parking space all for less than $150,000.
But in a city that is crazy for condos, the unit has been on the market for more than a month. Nobody is calling – there are 17 other units for sale in the 200-unit building, and the agents trying to sell them aren’t doing any better.
The lack of interest has nothing to do with market conditions, and everything to do with a 30-year history of indifference by the residents who were content to keep condo fees low at the expense of necessary maintenance.
The roof is in need of repair; deep lines run along the parking lot’s crumbling roof. The sauna hasn’t worked properly in a decade, and the unpredictable elevators feature carpet-like material on the walls, which used to be white but is now an off-putting shade of beige.
The condo tower is just one of hundreds in the GTA that will need tens of millions of dollars in repairs in the coming years, as older buildings in less affluent neighbourhoods show their age. It’s the dark side of the city’s decades-long condo infatuation, and could prove devastating for many low-income condo owners who can’t dig into their pockets to finance court-ordered repairs.
“This is a coming crisis that nobody is talking about,” said Chris Jaglowitz, a lawyer who specializes in condo law for Gardiner Miller Arnold LLP and a member of the Condominium Managers of Ontario. “You have all of these older buildings, and someone needs to pay for long-neglected repairs. And many people won’t be able to cover their share.”
That’s because condo buildings are owned collectively by the residents, and all repair bills are shared equally. Condo boards are able to levy special assessments in addition to condo fees to pay for projects. But the boards are made up of residents, who are sometimes motivated to keep fees low. And they serve short terms, which means long-term planning is often difficult.
The building on Panorama Court is a cautionary tale for condo owners everywhere. Residents – most of whom are immigrants – thought everything was fine until they received a letter from their condo board in mid-2010, telling them that millions of dollars were needed for upcoming repairs.
It came as a shock, because for the last 10 years, the board has been trying to catch up on years of neglect. They thought the worst of the work was behind them, after paying $2-million in 2001 to refurbish parts of the garage.
“You can imagine what it is like to receive news like that,” says Roza Zarik, who has lived in the building for 12 years and now pays about $900 a month in maintenance fees for her three-bedroom unit. “I understand the work needs to be done, I really do. If I thought I could sell and get what this place is actually worth, I would do it in a second, but I don’t even think a bank would let someone buy here right now.”
When the residents resisted the board’s plans to take out a multimillion-dollar loan for the needed repairs, the board brought the matter before an Ontario court judge so an administrator could take over and impose fees and break the impasse.
It’s a rare thing, with only a handful of instances in Ontario.
“There have been a few others, but it’s very uncommon,” said Mr. Jaglowitz. “It’s not anyone’s first choice.”
The judge determined that the residents had turned a willful blind eye toward maintenance over the years, putting off important work for future owners to contend with as they kept fees low. They may have known things were going poorly if they had attended the building’s condo meetings over the years, but many don’t speak English.
