condo w/ no Deferred reserve plan

[kfort]

Thank you for your help gentlemen. I appreciate it.

I should have more info tomorrow when I get to actually see condo assc minutes and, if there is one, the reserve plan by the condo board. From what I can tell, the 90k per year will cover the nearest future expenditures as per the study. But it does not leave a lot of room. The first three expenditures (3-4 years off) average roughly 130k, so would deplete the fund by 40k the year they are undertaken. My gut tells me that convincing a group of ~100 people it is ok to have 40 thousand less in the piggy bank at the end of the year will be a tough sell, therefore an increase in condo fees or a levy would be applied. Pets are allowed, I will never allow them in any unit I own, but the building allows small pets via approval requests and they require a non refundable deposit if approved. Rentals are allowed, no max % is mentioned, a form with contact info for the tenant is required. It makes note that if a tenant causes major disruption the condo corp will request an eviction.

I`m learning, and as I said, I appreciate the comments and answers. I`ll keep you posted!

kris
EDIT:
going back over the study yields the following upcoming costs and their estimated `future price` when the study was done in jan `07:
4years - flooring - 161,000
5 years - exterior - 175,000
5 years - roof - 225,000
7 years - security - 20,000
7 years - windows doors - 68,000
7 years plumbing - 120,000

Appears to be too much deferred maintenance as you stated Mr. Beyer. 561,000 by year five alone! The reserve fund will be virtually empty if cost/time projections are accurate and followed.

if my math is correct, by year 7 they are 70,000 in the hole if only 89,000 goes in each year.

 

[kfort]

Pulled the plug today.

today at about noon i received the following:

monthy minutes from `09 - complete
monthly minutes from `10 - missing both January and May
NO `10 AGM minutes or `09 AGM minutes.
NO deferred reserve plan therefore forcing me to proceed assuming they are following the study from Jan `07. Which does not appear favourable for a "buy and hold" strategy.

Thanks for your help all, I appreciate it!

 

[bizaro86]

QUOTE (kfort @ Oct 30 2010, 03:52 PM) NO deferred reserve plan therefore forcing me to proceed assuming they are following the study from Jan `07. Which does not appear favourable for a "buy and hold" strategy.

In Alberta, reserve fund studies are required to be done every 5 years, and an `07 study is ~3 years old. I wouldn`t take the age of the study as a major issue, I`d be looking at the CONTENTS of the study. I`m not sure what is typical in SK, but a 3 year old study to me is not a huge red flag. The building I looked at that didn`t have a reserve fund study done, ever, was a different story.

Michael

 

[kfort]

the age did not bother me, the contents did. with no seperate plan I have to assume they are folowing the study. And with no recent AGM minutes I also am lead to believe they are following the study to the letter. as mentioned, several upcoming expenses which would all but absorb the entire cash flow.


QUOTE (bizaro86 @ Oct 31 2010, 01:27 PM) In Alberta, reserve fund studies are required to be done every 5 years, and an `07 study is ~3 years old. I wouldn`t take the age of the study as a major issue, I`d be looking at the CONTENTS of the study. I`m not sure what is typical in SK, but a 3 year old study to me is not a huge red flag. The building I looked at that didn`t have a reserve fund study done, ever, was a different story.

Michael