Sentinel Management Inc. - Press Release Respecting CBC News Story

At this time many of you may have seen the latest article produced by Mr. Stu Mills of CBC. The intent of this release is to produce the facts regarding the special assessment at CCC 281 and educate readers on what it means to buy into a Condominium Corporation.

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It is first important to clarify the roles and responsibilities of all those involved. CCC 281 is a Condominium Corporation built in approximately 1985 consisting of 40 units that are all owned. The Board of Directors are owners in the Corporation who also pay condominium fees and are elected by the owners to make decisions on behalf of the Corporation. Sentinel Management Inc. was retained by the Condominium Corporation in September 2021 to perform Condominium Management services which includes advising the board and other fundamental maintenance, administrative and financial functions.

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Being a Board Member in a Condominium Corporation is not a sought-after volunteer position, in fact at CCC 281 and at most Condominums within our portfolio, it can be hard to get any interest in finding owners to run for the board as they are the single decision making for all owners. Naturally, people join the board not because they want to but instead because someone must do it. Being a board member requires difficult but pragmatic decisions that can lead to indecisiveness which forces people into misguided and political decisions.

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Condominium Corporations within the province of Ontario must complete a Reserve Fund Study every three years. The intent of this study is to forecast all upcoming capital expenditures for the next thirty years and create a funding plan to ensure the corporation has sufficient funds to be able to service the common elements as they fail. There are limitations with the study as it is fundamentally impossible to know how much things will cost in the future as we do not know the true cost until a capital project is complete. Notwithstanding the price of construction costs, inflation, materials and other issues that are difficult to predict. Despite the limitations, a Reserve Fund Study is far better than nothing.

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The engineering firm retained by CCC 281 proposed a funding plan to the Board of Directors that included a $600,000 special assessment which was primarily related to an additional $200,000 which was required to repair the Solarium Roofs and $250,000 to replace railings/steps and fencing. The special assessment was first communicated to owners in September 2023, at the time the exact amount was not known but Owners were told about the upcoming expenditures and advised to start making arrangements to be able to pay the forthcoming Special Assessment. The solarium was designed in 1985 by an Architect in Vancouver at a time with much different building standards and with not a lot of thought into the replacement decades later. The building was also built essentially on a hill, the current walkways around the units along with the fences around the walkways and the steps down are not to code and pose as a current liability to the Corporation.

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These site elements need to be brought to code, the City of Ottawa needs to issue permits, topographical surveys need to be done, drainage needs to be addressed and the areas need to be made safe. These two aspects are going to cost more to replace than anticipated by the experts in previous Reserve Fund Studies and that is why the special assessment must happen. This does not negate the fact that it is unfortunate for all residents to have to fork out thousands of extra dollars, but it also does not negate the fact that these things still need to be repaired or the financial repercussions will be significantly more than the special assessment.

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As per the Condominium Act 1998, the Reserve Fund must be adequate and as I said in my interview with Stu Mills, I commend the current Board of Directors for approving a Reserve Fund plan that ensures the Reserve Fund is adequate and the Corporation has the funds in place to ensure the Corporation can fulfill their obligations under the Act. Moreover, the plan ensures the safety for all residents is treated with the urgency it deserves along with proper risk management to eliminate a much bigger financial burden in the future if these things are neglected. As happened in Florida, a reluctance to make difficult decisions can have devastating effects for the community.

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I hope readers can take away and learn that buying a Condominium is not risk free and you do not always have cost certainty in future years, much like owning a single-family house.

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Buying a Condominium is an investment into a community and all owners are in the same boat together. If you buy into any Condominium, you must be committed to paying your fair share of maintenance fees and understand why it is required.

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Yours truly,

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Noah Johnston B.A, OLCM, RCM, LCCI

Vice President

Sentinel Management Inc.