Are Strata Properties being properly Maintained?

I was reviewing the news storey regarding the Sussex Square residents’ dispute with their leaseholders Westsea Construction and Capital Construction Supplies. At the heart of this dispute is the fact that the buildings they live in have $10M worth of repairs required to a leaky building envelope.  The residents feel that they should not have to pay because in their opinion, the building was not adequately maintained (or designed and built, but I am going to concentrate on maintained), and it is this lack of maintenance that caused the building enclosure to fail.

Is this a valid argument?  I know that most home warranty programs have clauses stating that if you do not maintain your home and damage occurs due to the lack of maintenance, they will not cover you.  Is this case not the same thing?  The leaseholders had a responsibility for the maintenance of the buildings.  If it can be shown that the damage was a result due to the lack of maintenance, should they not be responsible for the repair?  Why should the residents (who are in this case acting as the ‘insurance funders’) have to pay for this work.

This leads me to another question.  Do most building managers have the skills to properly manage the maintenance of the buildings in their portfolio?  I do not believe so. 

Back in the 90’s the rules changed making it mandatory that all Strata managers become licensed by the Real Estate Council in BC.  This was a good step as it started to ensure that the public could expect a level playing field with all managers meeting a minimal level of training.  It also requires all managers to complete ongoing education in two year cycles. But is this enough? 

Looking through the initial training course, there is only 2 out of 25 chapters that deal with Buildings (building design and construction & controls, maintenance, and energy conservation).  The rest is administrative type topics (the paperwork portion of the job) or the CYA topics (the Law and ethics).  Only two weeks out of the suggested 25 weeks is dedicated to gaining knowledge that would allow you to properly manage the maintenance of the buildings.

Next looking at the list of approved ongoing education courses, not one of them deal with the maintenance of the building and in fact a majority of them deal with topics that the average manager will never need, like selling real estate, time shares, and marketing, topics suitable for Real Estate agents but probably not for property managers.

I have met a lot of building managers in my job.  The vast majority of them appear to have a good handle on the day to day administration portion of the job, but few have exhibited any significant degree of building knowledge and appear particularly ignorant to building enclosure science.  The goods ones are out there; during the 10 year period of time that I owned a Condo and was on the Strata, we worked with an excellent manager who did realize the importance of proactive maintenance and the savings achieved by spending a little bit more up front to do it right.  In fact, his practices had a lasting effect on how I approach maintenance and repairs to this day.  But unfortunately, he appears to be one of the few exceptions as opposed to the rule.

So if a Strata relies on a property manager for advice on maintaining their building stock, and the manager does not have the skills related to construction, building maintenance, or building enclosure science, what is the chances that the building will have the proper proactive maintenance performed?  

The one saving grace related to this discussion is that the new Bill 8 will require all Strata (unless they opt out) to perform professional engineering reviews of their Building Enclosure on a regular cycle.  This should gradually transform all Strata building stock into well maintained structures.

Additional tips when purchasing a Condo

Some final points of advice when looking to purchase in a Multi-Family building


1) Like mentioned in the Vancouver Courier articles (Condo Pitfalls & Condo Nightmares) that inspired these blog entries, any lack of documentation is an automatic Red Flag! If the building is more than 4 years old, and does not have a extensive building envelope review completed in the last 5 years, you should think twice about continuing with the purchase.

Fortunately the lack of report should become a rarer situation going forward now that Bill 8 of the Strata Property Act has been enacted requiring all Strata’s in BC to commission a ’depreciation report’ within the next 2 years.

Note: On a side comment, it is important for Condo owners to realize that the implementation of these studies will most likely culminate in significant Strata Fee hikes as the full cost of maintaining a multi-family-building is better understood by Strata’s.

2) Never allow yourself to be pressured into a purchase. Subject removal dates are arbitrarily defined periods of time with no relation to a logical time period required to properly vet your purchase. They often can represent hype the agents impart into the process to make purchasers feel they need to ‘act fast’ or loose their buying opportunity. This is far too big of a decision, with far too large a potential liability, to be rushed into without due diligence. Take the time to due it right. If it falls through, it probably is for the best. Any vendor who is seriously interested in selling will ensure the buyer has ample time to vet the purchase as they do not want the buyer coming at them later. In markets where there is a buying frenzy, do not be pressured to buy without subjects, you are already buying at what is often the top of the market and can usually ill afford to take on the additional responsibility of unknown liability.

3) At the lower end of the liability scale is a fully rain-screened dwelling. In general, these buildings are more tolerable of faults in the design of the primary water shedding surface and will usually represent a much lower level of potential liability. At the upper end of the liability scale is a face-sealed stucco building without any significant overhangs and a complicated exterior design with lots of penetrations and architectural ‘features’. For a discussion on these two exterior styles see this HPO bulletin.

4) Remember that just because a building is not leaking now does not mean it will not leak down the road. There is a reason that a face sealed building is no longer allowed by code. It does not work! It is usually not a matter of if problems will develop but a matter of when. There is also the issue where many older buildings (pre-1990) are now looking at energy upgrades to the building to reduce the cost of heating bills as energy costs rise. This is often having a negative and unanticipated impact on the building’s health because as more and more of the interior heat is blocked from reaching the exterior sheathing and cladding, that wall assembly’s ability to survive infrequent wetting is substantially reduced. So as the general housing stock is updated to be more energy efficient, it will be increasing more important to ensure that the walls have a continuous water shedding capability.

I hope these entries have helped. I would be happy to discuss these issues further with you at any time. As some final guidance for you, when purchasing a Condo, I recommend you review this bulletin I send all my Condo clients as part of my inspection process.

Building Envelope and Mechanical Equipment study - Bill 8

The Strata rules are being changed to require all Strata organizations to perform regular assessments of the buildings contained in the Strata. This will include an engineering study of the building enclosure (exterior, roof, parkade) and all mechanical equipment.

The study will need to project out 30 years, the costs to maintain and replace critical components of the building.

The next step many would like to see is a law that will require Strata's to actually finance at least a portion of the expected costs with the monthly operating assessments.  Some are calling for up to 50% of the costs identified in the study to be financed by monthly Strata fees.

The purpose is to finally give buyers an accurate reflection of the costs of owning multi-family and force the Strata to properly maintain the value of the building by forcing regular assessment and service.