Blog Post

September 29, 2020 - Educational

Tag(s): #BoardofDirectors #Educational #Maintenance


Do it, or defer it?

 

Major capital expenses in condos are reserve expenses.  During this pandemic it is very tempting to hold-off authorizing work to proceed.  After all, reserve contributions make up 30% to 50% of the budget, are usually very disruptive when they are going on, and cost a lot.

Based on our experience so far, most projects did proceed during the first six months of the pandemic, albeit with physical distancing, small crews, staggered shifts, hand sanitization, respiratory etiquette, and self awareness.  Contractors were quick to embrace protocols to mitigate spread and still get things done.  Consultants found even more ways to collaborate and use technology respecting and emphasizing the need to crush-the-curve.  Condominium boards were sometimes less welcoming, especially for interior work; however, most work related to paving, balcony, and roof projects proceeded.  Some projects benefitted from even more competitively priced bids than planned.  Other projects suffered from supply chain disruptions, skyrocketing material costs, and ill-conceived fear-based restrictions or cancellations.

Condo Boards find themselves in a difficult place (to say the least) trying to balance public health requirements, individual owner concerns, and professional advice in a very turbulent, fearful, and anxious environment that seems to change everything in just a few heartbeats.  Successful boards can adapt and overcome by carefully considering some key points when trying to save, lessen, reduce, shave, or otherwise avoid major repair and replacement costs.  Those key points include recognizing that:

  1. Contributing less now means contributing more later, think about it the same way you would think about retirement savings plans.
  2. Deferring work means that a small expensive fix now will be a bigger, very expensive fix later.
  3. Lower balances mean less opportunity to earn interest, interest that helps moderate common expense fee increases.

If you absolutely must defer a major replacement, consider prioritizing your needs or wants as follows:

  1. Safety:  safe buildings mitigate fire, smoke, slips, trips, falls, and water intrusion or escape.
  2. Reliability:  reliable buildings are strong, rigid, and durable.
  3. Functionality:  functional buildings control heat, vapour, light, and noise.
  4. Efficiency:  efficient buildings use less fossil fuel, optimize clean energy use, and emit little waste.
  5. Economics: economic buildings realize good value for all money collected, saved, and spent, seek best solutions for maximum effect, and invest in future considerations.
  6. Aesthetics: aesthetic buildings look good, have great curb appeal, and are in desirable locations.

These needs and wants have been the cornerstone of decision-making for a very long time.  In the early 1960s the Canadian Division of Building Research, part of the National Research Council, produced Canadian Building Digests that emphasized these points – particularly regarding the requirements for exterior walls.  They apply to whole buildings and their systems too.

Also, from the Seven Lamps of Architecture by John Ruskin, 1849, it was concluded:  “Therefore, when we build, let us think that we build for ever.  Let it not be for present delight, nor for present use alone; let it be such work as our descendants will thank us for, and let us think, as we lay stone on stone, that a time is to come when those stones will be held sacred because our hands have touched them, and that men will say as they look upon the labor and wrought substance of them, "See! this our fathers did for us." For, indeed, the greatest glory of a building is not in its stones, or in its gold. Its glory is in its Age.”

Every condominium manager, board, and community has a network of professional advisors they can, and should, turn to when making these types of decisions.  Once the issues are properly framed, appropriate solutions will be brought to light.  Those solutions will be well thought out, as broadly fair to everyone involved as is possible, and ultimately successful in keeping your community safe, sound, and sane.

All that while remembering that a home is more than a roof, walls, or lofty curving stairs, it is a place of faith, and trust, and softly spoken prayers.  It is a people thing after all.  We are well-served when we remember to be kind, compassionate, and understanding as we all learn to deal with decision-making in a pandemic.

 

 

Jon Juffs, C.E.T., ACCI

Director, McIntosh Perry

mcintoshperry.com

 

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