Anarchy in the sky: The condo dream becomes a nightmare
Globe and Mail
17 May 2017
If you’re a baby boomer and/or empty-nester living in suburban Toronto,
you’ve no doubt considered ditching the house and moving into a sleek
downtown condo. You may already have made the leap to take advantage of
the rich cultural menu that city life offers. The burbs were great for
raising a family and holding backyard barbecues. But they’re deathly
boring and dining out often means choosing between Swiss Chalet and
East Side Mario’s.
If you’re a first-time buyer, a condo is probably your only option.
Prices of a detached home in the Toronto and Vancouver regions are so
off the charts that the most millennials in those cities can aspire to
rent or own is a 500-square-foot glass box in the sky. Which is fine,
for now anyway. Who needs a yard or basement when you spend your days
and nights out on the town?
For condo builders, empty-nesters and millennials are the gifts that
keep on giving. Coupled with provincial and municipal densification
policies, they are responsible for a tripling of the number of condo
units in Ontario since 2001. There are now more than 750,000 of them –
and counting, since more than half of all new homes under construction
in the province are condos.
condos often end up becoming a living hell
What policy makers failed to realize in devising their “smart growth”
policies is that, in engineering the condo boom, they were effectively
creating a fourth level of government with few of the checks and
balances that prevent (most of the time) federal, provincial and
municipal administrations from running amok. Bad or unethical
governance means that, instead of the dream of hassle-free home
ownership, condos often end up becoming a living hell.
Board elections are subject to all kinds of abuses.
Condo towers are essentially city-states unto themselves, and they’re
often engulfed in civil warfare. Board elections are subject to all
kinds of abuses. Cases of collusion among cliques of owners to gain
control of the board are common. A Globe and Mail report on one
apparent instance of undisclosed co-ordination among three investors
vying for board seats at several different condo corporations in
Toronto comes as no surprise to anyone who has witnessed condo politics
Condo boards...often put themselves first
Condo boards can oversee multimillion-dollar budgets, the hiring of
managers and the awarding of repair and maintenance contracts, with
little transparency. They determine monthly condo fees paid by owners.
They are supposed to act in the best interests of all owners; they
often put themselves first.
renting out their units nightly is more lucrative than a long-term lease
For investors who rent out their units – roughly half of Toronto condo
owners do so – that usually means making money rather than worrying
about quality-of-life issues. Investor-owners typically love sharing
services such as Airbnb, since renting out their units nightly is more
lucrative than a long-term lease. But the endless parade of party-hardy
strangers next door can be a nightmare for owner-occupiers. Instead of
home sweet home, condo buildings can turn into war zones.
In cases of suspected electoral fraud, the condo corporation can go to
court to set aside an election. But that is a long and costly process.
Besides, the penalties for rigging a condo board election, other than
being kicked off the board, are often limited to simply covering the
condo corporation’s legal costs.
more bureaucracy and higher condo fees
The Ontario government recently updated legislation governing condos,
but the new law has yet to take effect. The updating process began in
2012 in the wake of an alleged $20-million fraud at several Toronto
buildings by one condo-management company, whose president reportedly
fled to Bangladesh. The new law and regulations will require mandatory
training for condo managers and directors, to be overseen by two new
regulatory bodies. But while that may or may not improve governance,
condo lawyer Shawn Pulver warns it also will mean more bureaucracy and
higher condo fees for owners.
“While the intention is good, I think the implementation is going to be
a massive problem,” says Mr. Pulver, a partner in the Toronto firm
Macdonald Sager Manis. “What really needs to be done is educating
owners and prospective owners about what they’re getting into.”
Florida... provides prison sentences for anyone
convicted of committing condo fraud
That, and maybe tougher penalties for breaking the law. Florida, which
is to condos what Muskoka is to cottages, just passed legislation that
explicitly provides prison sentences for anyone convicted of committing
condo fraud – electoral or financial. The state senator who
co-sponsored the new bill, which unanimously passed both houses of the
state legislature, said it would help rein in “out of control” condo
boards that acted like “totalitarian regimes.”
Condo dwellers in Ontario should be so lucky.