Condo Smarts: Long-term planning is essential for a strata corporation

“Our 14-floor building in Burnaby is experiencing chronic failures with its hot water system.”

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Dear Tony:

Our 14-floor building in Burnaby is experiencing chronic failures with its hot water system. The strata corporation maintains, or avoids maintaining, our four boilers, which provide hot water for the units. Heating is electric in each unit, and each has a gas fireplace. Our council and owners always refuse to approve sufficient funds to plan for upgrades before our boilers fail, and we are either left for months without sufficient hot water, in one case a week with no hot water, and everything becomes an emergency. Failing legal action, which the owners may probably ignore anyhow, are there any other options under the Act that we can rely on?

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— Phyllis M., Burnaby

Dear Phyllis:

A significant part of the challenge facing many strata corporations is the lack of long-term planning for renewals and the refusal to contribute any increases in the reserve funds to plan for any repairs.

On review, your building has barely enough funds to pay for an emergency or insurance deductible, and the owners refuse to approve an increased annual contribution.

The Strata Property Act separates expenses into two categories. The operating budget is for items that occur once a year or more frequently, and the contingency reserve fund is for items that occur less than once a year.

Those are the basic classifications. Boiler replacement and upgrades generally fall under reserve fund expenses. Annual budgets may be amended at your AGM before they are approved.

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One option is to encourage owners to contribute more to the reserve funds; even a five or 10 per cent increase will make a significant difference within a few years. The benefit of increased reserve fund contributions and expenses becomes apparent when it is time to approve the upgrades. With a recommended renewal in your depreciation report, the expense is only a majority vote, compared to a special levy that requires a three-quarter vote that is often defeated.

For some components, there is the opportunity to consider a contracted service program that becomes an operating expense. For example, FortisBC Alternative Energy Services (FAES) is launching a complete service replacement and monitoring program for gas hot water and heating boiler systems. This spreads the cost over a longer period, ensures higher performance to reduce energy consumption and reliable service for the owners, and the cost becomes part of the strata annual operating budget, your monthly fees.

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Similar programs in full service are also available for elevators and mechanical systems to increase reliability, performance and predictable cost management.

Full-service programs reduce emergencies, the stress on strata councils and property managers, and result in higher performance of our buildings with predictable cost management.

For more info on the Fortis FAES retrofit programs and the jurisdictions it is available, go to fortisbc.com/aes

Tony Gioventu is executive director of the Condominium Home Owners Association. Email tony@choa.bc.ca.

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