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Common interests: Rejuvenating
shared spaces key to cutting costs, raising unit values
September 2010
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Steve Christodoulou, President and CEO of
ICC Property Management Ltd.
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By Clare Tattersall
For prospective residents of a condominium, the building’s shared common areas provide a good indication of how well the condo is cared for. For this reason, these spaces, which include nearly any part of a multi-unit dwelling that is not owned by the building’s residents but is the sole responsibility of the condo corporation – lobbies, hallways, recreation rooms, laundry facilities, basement storage areas, fitness centres and elevators, among others – should be properly maintained. This involves embarking on “behind-the-scenes” retrofits as well as more noticeable interior renovations.
“Typically, the most common upgrades are lighting retrofits, toilet and showerhead retrofits and boiler and mechanical room retrofits,” says Steve Christodoulou, President and CEO of ICC Property Management Ltd.
According to Christodoulou, a lighting retrofit is anticipated to have a payback period of three years and a return of 25 to 30 per cent in energy savings, plus government rebates. So, an operator of a 300-suite condo building can expect to save approximately $30,000 per year. A toilet and showerhead retrofit is expected to have a payback period of 18 to 24 months and a return of 25 per cent in water savings. For a 300-suite condo, this is anticipated to translate into $25,000 to $30,000 in savings per year. A boiler retrofit is anticipated to have a payback period of five to seven years and a return of 15 to 20 per cent in savings per year. For a 22-year-old condo building with 220-suites, an operator can expect to save approximately $55,000 annually.
Just as important as energy efficient upgrades are interior refurbishments. Christodoulou says condo corporations should renovate common areas every 15 years.
If these spaces are neglected, this can detract from the building’s overall appearance and deter people from wanting to live in the condo, he explains.
Christodoulou adds that shabby shared areas can even possibly take away from the value of each individual unit.
“By sprucing these (spaces) up, it adds value in resale to these buildings because they become more desirable.”
This, in turn, enables older condo buildings to compete with newer developments, which, Christodoulou points out, often have smaller units.
Unfortunately, many condo corporations fail to follow this rule of thumb due to the costs involved, Christodoulou notes.
“A lot of (condo corporations) fail to put enough money aside for renovations, so they take a back seat to structural repairs.”
If a condo corporation does not have enough money in its reserve fund to cover this type of work, Christodoulou suggests the board ask for a special assessment. A special assessment is a charge that may be levied against unit owners by the board of directors of the condo corporation to help pay for what it feels are necessary repairs or upgrades.
“You could do a special assessment to see if all the unit owners would pay, for example, a one-time cost of $1,000 each to have their building renovated,” he explains. “This way, you can bring the expense forward ‘X’ amount of years in the reserve fund study and pay for half of it through the reserve fund and the other half through special assessment.”
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