Being penny wise and pound foolish has a way of catching up with you as one condominium community has learned. For more than twenty years, the corporation failed to address growing problems and is now paying the consequences.
YCC 82 is broke. They have $1.75 in the reserve fund and a $5,000 operating fund as of Spring 2021. This is a decades long financial crisis. Condo fees of $800 per month are unchanged from 2006. Owners rejected both a borrowing by-law and planned 2006 assessment of up to $2,900 per month per unit.
A recent Ontario Court decision has shed light on their current situation after an investor who owns multiple units in the building filed a lawsuit against the corporation. The building is more than 50 years old. Water dripping down walls and pooling on the floor, worn carpets, exposed wires, cracked windows, yellow paint and broken fixtures are the least of their problems. Balconies are unsafe and have loose concrete. There are defects in the underground parking garage roof and cracks in the foundation.
This is a 321-unit building. An engineering report identified repairs necessary in the building over the next year that are likely to cost more than $14 million. Owners have received a special assessment ranging from $30,000 to $42,000 per unit that is only expected to raise $11.2 million. Funds are to be used to repay loans and address a list of 70 repairs that includes upgrading elevators, replacing plumbing, and restoring a party room that has been closed for more than a decade. Those unable to pay the special assessment will have a lien placed on their home. Liened units will be sold with proceeds used to pay the special assessment. The building is in such poor condition that owners are unable to obtain a loan from traditional lenders to pay the special assessment. There are no longer cleaning or security services, or a superintendent.
In past years, the corporation has borrowed more than $8 million from private lenders. It owes the City of Toronto more than $1 million for unpaid services. Each month, the corporation pays $80,000 in interest on loans.
This is an unfortunate situation for owners who have neglected their home for far too long and are now dealing with a situation where there are no good solutions.