Condo Smarts: Replace three roofs at once for a better price
Dear Tony: Our owners approved just enough money to replace one roof in our complex.
We have three buildings with 28 units each, all of the same age, and the roofing is in the same poor condition.
We were surprised that the owners approved the first phase without all the repairs being approved at the same time, as there is no guarantee that the owners will approve a new charge to replace the remaining two roofs within six months or a year.
Council members said we would approve the rest at a special meeting in April. We had no other options at our annual meeting, as this was the only resolution passed. What happens in the spring if the owners do not approve the balance of the repairs? Do we have to go to court? Another point is that all councilors are from the building for the new planned roofing.
It is common for strata companies to have to make repairs in stages due to financial constraints, various replacements due to aging, geographical conditions or design differences between buildings.
Strata corporations must maintain and repair common property. This is a key requirement of the Strata Property Act. If the owner approves phased repairs and continues to schedule the remaining renewals to meet this obligation, it is within the company’s remit, but phased repairs will have negative effects and cost more as time goes on.
An important advantage of being a collective organization is the purchasing power of 84 units and three roof systems. The scale of purchasing is your asset.
The best unit cost is the simultaneous renewal of all three roofing systems. You’ll be in a stronger bargaining position, contractors are eager to bid on bigger projects, and the prize will benefit your community. Postponing maintenance and renewals rarely has benefits. Another perspective for a strata firm to consider is the impact on property values and information disclosure.
The roofing systems are jointly owned by the corporation. A seller may be required to disclose this information because two more roofing systems are yet to be completed, and while a seller in Building 1 with new roofs could report that the roofing has been upgraded, the company will also, through their minutes and resolutions, report the roofing on the following buildings has not been replaced and the corporation will have to deal with more levies for the rest of the work.
Since work on the building will be completed using only councilors, there is likely a motivation from one or more of those councilors to sell their units – another purpose that may not have been disclosed to the owners when they considered the resolution.
If the owners are collectively interested in finishing all roofing systems at the same time, 20 percent of the owners could sign a petition demanding a special general meeting to include a resolution for all roofing. In any case, owners would have the opportunity to vote for a complete project.
Your 2017 depreciation report, which has not yet been updated, recommended that all roofing systems be replaced by 2021, and there was a supplemental roofing report in 2018 that advised that there was “a maximum life of three years before there was a risk of failure.”
If there is a roof that causes damage to lots and community property, your insurer may also ask serious questions about the coverage since you have not followed the advisors’ recommendations and have not renewed the assets within the recommended period.
In the event that the strata corporation does not approve the rest of the roofing before damage or failure occurs, the owners will likely have little choice in the future but will try to get an injunction through the Civil Resolution Tribunal or the Supreme Court of BC to the rest of the repairs — more delays, unnecessary costs, and increased liability for everyone.
Tony Gioventu is director of the Condominium Owners Association.
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