A $30,000 special assessment doesn’t go far.
For a 200-suite building that amounts to $6,000,000. While that may sound like a lot of money, it doesn’t go far when applied to a building valued at $100,000,000. Much of that special assessment could be eaten up by roof and elevator replacement, building façade refacing and garage repairs. Updating common areas and amenities could use up whatever is left. That special assessment may need to be closer to $50,000 if infrastructure neglect is more extensive.
This is the situation faced by condo corporations throughout Canada that have not maintained their infrastructure for a decade or longer.
Deconversion is the process of condo owners agreeing to no longer operate as a condo corporation. Its purpose is to allow a building to be sold. This may be a viable option for condo corporations where owners are unable to pay a large special assessment necessary to catch up with neglected maintenance and updating, and an interested purchaser for the building is available.
One 260-suite condo building built in 1972 recently faced a special assessment of up to $80,000 per suite to pay for $18,000,000 in repairs covering decades of neglect. An internal battle ensued with some owners wanting to sell the building and those opposed. Their decision, if known, has not been made public.