Reserve Fund Studies—Part 4
When the bus is heading towards the cliff.
A few owners, far too few, will ask to examine the Reserve Fund Study. (RFS)
When they do ask, they are shown the current RFS and from that they may not learn much. That is because they should ask to look at the previous two or three studies along with the current study.
At one Toronto condo, the 2011 RFS planned for:
• all the major underground garage repairs to be completed.
• all the windows and balcony doors to be replaced.
• all the hot water risers (piping) to be replaced.
• the balconies to be repaired.
All this work was to be done within ten years. All the funding was properly allotted.
Three years later, the 2014 RFS pushed some of the work out but the majority of the repairs mentioned above would have been done within that time line.
Then for an unexplained reason, the Board brought the 2017 Reserve Fund Study forward by a year. Reading the 2016 RFS shows that most of the major repairs were pushed out by years. Not only was the work pushed out but the engineers estimated that the cost of these repairs to to fix underground garage water leaks and deteriorated concrete would double to triple in cost.
That’s not all.
The RFS recommended higher increases into the Reserves to pay for the required repairs. So the owners are paying a lot more now ($120 a month or more) for work that will not get done until much further in the future.
To be fair, the detoriating parking garage was not completely ignored. The initial repairs (that would have cost $90,000 if done in 2012) was done in 2018 at a cost of $360,000.
So what was done?
The Board renovated the hallways and the lobby. They upgraded the elevator cabs and machinery but not entirely. I must say that the new elevator cars look good. It would have been nice if the Board replaced all of the 40+ year-old equipment but everything that the owners (and potential buyers) see looks good.
The Board renovated the Party Room and the swimming pool. What money they spent went to make the building look good. The building structure and the systems were mostly ignored.
