{"id":19458,"date":"2022-03-02T11:11:00","date_gmt":"2022-03-02T19:11:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=19458"},"modified":"2022-02-16T12:19:40","modified_gmt":"2022-02-16T20:19:40","slug":"condo-reserve-funds-for-a-rainy-day","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/","title":{"rendered":"Condo Reserve Funds for A Rainy Day"},"content":{"rendered":"<p style=\"text-align: justify;\">More Canadians are looking to buy condos, but they\u2019re being warned not all are equal. The Canadian Institute of Actuaries (CIA) released a study on condo reserves this week. In the 140-page report, the organization warns low reserves often create misleading overvaluations. Over the long run those values may not benefit the current owners though. Most condos they looked at had insufficient reserve funds, meaning owners could be hit with bills for tens of thousands of dollars to cover sudden repairs.<\/p>\n<p style=\"text-align: justify;\"><strong>Condo Reserve Funds<\/strong><\/p>\n<p style=\"text-align: justify;\">Every condo has a reserve fund, a type of account with funds to mitigate the risk of emergency repairs. The funds can be tapped if an expensive or large repair is needed. It\u2019s generally funded by a surplus of maintenance fees and managed by the condo\u2019s board. Some are better managed than others and have stronger reserves, just like any company.<\/p>\n<p style=\"text-align: justify;\"><strong>Many Condos Are Suffering From Shortfalls<\/strong><\/p>\n<p style=\"text-align: justify;\">The CIA found many condos have extremely low reserve funds, to keep maintenance fees low. Buildings targeting investors often boost valuations at the expense of long-term maintenance. \u201c\u2026 low reserve fund contributions will likely lead to overwhelming annual increases and require lump-sum payments from owners to cover shortfalls, and could potentially lead to the loss of homes, especially in the context of rising interest rates,\u201d reads the study.<\/p>\n<p style=\"text-align: justify;\">Adding, \u201cThis deferral of contributions from current owners to the next buyers will create intergenerational inequity as well as a false overvaluation of the market value of condo properties.\u201d<\/p>\n<p style=\"text-align: justify;\">The study is referencing the impact of carrying costs on home prices. Buildings with low fees leave credit capacity that can add thousands to the price. People will also spend more to be in a building with lower fees. If low fees come at the expense of well-capitalized reserves, value can vanish fast.<\/p>\n<p style=\"text-align: justify;\">Owners can be hit with a special assessment of tens of thousands of dollars. When this occurs, it often happens with very little time to round up the cash. This can mean having to leverage your unit for a home equity loan, or visiting a private lender. Even pricey cities like Toronto can see the value of a condo vanish in almost no time.<\/p>\n<p style=\"text-align: justify;\"><strong>New Condos Aren\u2019t Setting Aside Enough Funds For A Rainy Day<\/strong><\/p>\n<p style=\"text-align: justify;\">The association studied a sample of reserve funds and found many are under saving. \u201cIn aggregate, not enough money is being set aside for future expected payments or to cover unexpected repairs,\u201d says Jean-S\u00e9bastien C\u00f4t\u00e9, FCIA, and co-author of the paper.<\/p>\n<p style=\"text-align: justify;\">Recent buildings were revealed to be particularly bad. Shiny new buildings often start with low maintenance fees, then require an adjustment. Brand new buildings don\u2019t need much maintenance, after all. They\u2019re also pricey, so people try to save as much as they can. This is a reckless combination.<\/p>\n<p style=\"text-align: justify;\">If you\u2019re not saving a little when things are good, you can be hit with a big bill when they\u2019re bad. \u201cThere are large bills to be paid soon, and very few condos have saved enough, especially those constructed since 2000,\u201d says C\u00f4t\u00e9.<\/p>\n<p style=\"text-align: justify;\">The organization suggests strengthening legislation across Canada to address the issue. Currently there\u2019s a patchwork of provincial legislation, some better than others. This leaves the management of condos largely up to boards with little training. Even worse, they found boards often had undeclared conflicts of interests. Failing the standardization of legislation, they suggest buyers look at reserve studies. They can be obtained for a small fee by anyone, and they often reveal upcoming issues.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/betterdwelling.com\/canadian-condos-are-often-overvalued-due-to-low-reserve-funds-report\/\" target=\"_blank\" rel=\"noopener\">Report : Canadian Condos are Often Overvalued Due to Low Reserve Funds<\/a> by Daniel Wong | Better Dwelling<\/p>\n","protected":false},"excerpt":{"rendered":"<p>More Canadians are looking to buy condos, but they\u2019re being warned not all are equal. The Canadian Institute of Actuaries (CIA) released a study on condo reserves this week. In &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-19458","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"More Canadians are looking to buy condos, but they\u2019re being warned not all are equal. The Canadian Institute of Actuaries (CIA) released a study on condo reserves this week. In &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Condo Reserve Funds for A Rainy Day\",\"datePublished\":\"2022-03-02T19:11:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/\"},\"wordCount\":615,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Real Estate\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/\",\"name\":\"Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#website\"},\"datePublished\":\"2022-03-02T19:11:00+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/#breadcrumb\"},\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2022\\\/03\\\/condo-reserve-funds-for-a-rainy-day\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Condo Reserve Funds for A Rainy Day\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/\",\"name\":\"Rory C Real Estate | Oakwyn Realty\",\"description\":\"Rory C Real Estate Updates | Home Selling &amp; Buying\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-CA\"},{\"@type\":[\"Person\",\"Organization\"],\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\",\"name\":\"Rory Clipsham\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-CA\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"contentUrl\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"width\":504,\"height\":504,\"caption\":\"Rory Clipsham\"},\"logo\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\"},\"sameAs\":[\"http:\\\/\\\/www.roryc.ca\\\/\",\"https:\\\/\\\/www.facebook.com\\\/pg\\\/BurnabyandCoquitlamHomes\\\/about\\\/?ref=page_internal\",\"https:\\\/\\\/www.instagram.com\\\/roryclipshamhomes\\\/\",\"https:\\\/\\\/x.com\\\/RoryClipsham\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/","twitter_card":"summary_large_image","twitter_title":"Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty","twitter_description":"More Canadians are looking to buy condos, but they\u2019re being warned not all are equal. The Canadian Institute of Actuaries (CIA) released a study on condo reserves this week. In &hellip; [read more]","twitter_creator":"@RoryClipsham","twitter_site":"@RoryClipsham","twitter_misc":{"Written by":"Rory Clipsham","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/#article","isPartOf":{"@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/"},"author":{"name":"Rory Clipsham","@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"headline":"Condo Reserve Funds for A Rainy Day","datePublished":"2022-03-02T19:11:00+00:00","mainEntityOfPage":{"@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/"},"wordCount":615,"commentCount":0,"publisher":{"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"articleSection":["Real Estate"],"inLanguage":"en-CA","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/","url":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/","name":"Condo Reserve Funds for A Rainy Day &#8226; Rory C Real Estate | Oakwyn Realty","isPartOf":{"@id":"https:\/\/www.roryc.ca\/blog\/#website"},"datePublished":"2022-03-02T19:11:00+00:00","breadcrumb":{"@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/#breadcrumb"},"inLanguage":"en-CA","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.roryc.ca\/blog\/2022\/03\/condo-reserve-funds-for-a-rainy-day\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.roryc.ca\/blog\/"},{"@type":"ListItem","position":2,"name":"Condo Reserve Funds for A Rainy Day"}]},{"@type":"WebSite","@id":"https:\/\/www.roryc.ca\/blog\/#website","url":"https:\/\/www.roryc.ca\/blog\/","name":"Rory C Real Estate | Oakwyn Realty","description":"Rory C Real Estate Updates | Home Selling &amp; Buying","publisher":{"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.roryc.ca\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-CA"},{"@type":["Person","Organization"],"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7","name":"Rory Clipsham","image":{"@type":"ImageObject","inLanguage":"en-CA","@id":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","url":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","contentUrl":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","width":504,"height":504,"caption":"Rory Clipsham"},"logo":{"@id":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg"},"sameAs":["http:\/\/www.roryc.ca\/","https:\/\/www.facebook.com\/pg\/BurnabyandCoquitlamHomes\/about\/?ref=page_internal","https:\/\/www.instagram.com\/roryclipshamhomes\/","https:\/\/x.com\/RoryClipsham"]}]}},"_links":{"self":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/19458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/comments?post=19458"}],"version-history":[{"count":1,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/19458\/revisions"}],"predecessor-version":[{"id":19459,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/19458\/revisions\/19459"}],"wp:attachment":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/media?parent=19458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/categories?post=19458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/tags?post=19458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}