Most B.C. strata councils don't collect nearly enough money in monthly strata fees to keep up their condos according to depreciation reports required by the B.C. government.
Jeremy Bramwell's company, Bramwell & Associates Realty Advisors, conducted appraisals for the depreciation reports, which outline "worst case scenarios" for replacing features of a building like boilers and roofing and also outline which elements of a building are likely to need replacing in five, 10 or 20 years.
He says this underfunding is a scary situation that will likely cost condo owners a lot in the coming years.
"We found that most stratas are within the critical phase under international standards," he told Early Edition host Rick Cluff. "What that essentially means is they can expect a series of regular special assessments, mainly because they haven't saved enough in the past."
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Special assessments come up when large, unexpected expenses arise for a strata. For example, if a roof suddenly collapses, the total cost of roof replacement would be divided among all owners based on the square footage of their units.
Bramwell says most special assessments cost stratas around $5,000, but some can go as high as $80,000.
Bramwell believes that over 90 per cent of stratas in B.C. could be facing the problem of too-low contingency funds. As well, he says, less than 50 per cent of stratas are operating without any sort of contingency fund at all.
"Those of us in the industry are constantly hearing of people having to move, [go into] foreclosure because they just can't make that $20,000 or $40,000 special assessment, especially in complexes where you have seniors," Bramwell said.
To hear the full audio, click the audio labelled: Think your strata fees are too high? They might not be high enough