Condos' Financial Structure

The cornerstones of a condo’s financial health are the annual budget for regular expenditures and, in many provinces, the reserve fund for replacements as well as large non-routine repair expenditures in the future. Other key issues are also discussed in the sections below. It is important to point out here that too few owners do read the yearly budget and too few dare ask questions about it of the manager and or board at the AGM.

Budget

Each fiscal year, boards of directors approve a budget that is prepared based on expected revenues and expenditures for the next 12 months. 

This budget is sent to all owners at least two weeks before the beginning of a fiscal year.

Budgets are fairly standard and are usually prepared for boards by a condo's management company. How much input boards of directors have varies from condo to condo. Generally, presidents and/or treasurers are more involved in this process than other board members. However, the budget has to be voted upon by the entire board.

The budget is a board’s responsibility. Owners cannot vote on it.

However, if the budget is insufficient or wasteful, owners can requisition a meeting to discuss it; but they can’t force boards to comply with their wishes. Owners can, however, vote to replace their board at a requisitioned meeting designed for this purpose. (Click here for Requisitioned Meetings)

Items found in a budget are: sources of income, general expenditures, and provision for reserves or other funds.

Sources of income include:

  • condo fees, rentals, interest, surplus from previous years

General expenditures include:

  • utilities, administrative expenditures, regular contracts (i.e., landscaping, carpet cleaning), repairs and maintenance (i.e., plumbing)

Boards have the right to issue a revised budget at any point during the year when the reserve fund is deficient or unexpected expenditures occur. At that time, fees can be raised or a special assessment can be levied. (For special assessments, cllick here for Owners' Money Facts.)

What to Look for in a Budget

There are 5 important areas that owners want to focus on when receiving the annual budget. These are: level of increase or decrease in fees; history of fees in the condo over recent years; size of the reserve fund and yearly contributions to this fund; existence and size of a contingency fund and/or surplus from previous years.

Fees and History of Fees in Recent Years

Understandably, owners are relieved when fees remain the same and do not increase. Stability in fees is a good thing provided it is not to the detriment of the future fiscal stability of a condo.

Owners are also happy when increases are small, that is between 1 to 3%.

But stability or small increases in fees are desirable only when this is sufficient to compensate for inflation and when there is a sound reserve found and a small to moderate surplus for unexpected repairs. As well, a condo that has just completed some serious energy savings retrofits can afford stability for a few years because large savings are anticipated.

In contrast, much higher increases are indicated when:

  • the level of services is falling or there have been cuts in necessary services (provided, of course, that this does not stem from the fact that the staff is lazy and incompetent);
  • repairs are not being carried out (because there is no money);
  • the reserve fund is inadequate.

If these situations are occurring, then, a low increase in fees or no increase at all is a recipe for disaster. A condo may deteriorate, its real estate value will diminish, and owners’ satisfaction will rapidly plummet.

How do such detrimental situations occur? Sometimes they are caused by the fact that owners have refused increases in fees in the past and have defeated boards who tried to bring some fiscal sense to the situation. In other cases, boards were not knowledgeable or they did not want to displease owners because they wanted to be re-elected. Or, yet, boards squandered funds--and this happens more often than believed.

However, too many of the letters sent by owners describe fees that are going up yearly by 5 to 25% while boards and management carry on with unnecessary "preventive" maintenance, premature "repairs," constant upgrades of common elements, and by adding staff to compensate for the fact that the current staff is plain lazy, or, yet, give free reign to various contractors' suggestions. For many boards, spending money is a sign that one is doing a good job: Yet, it is easier to spend money than to find creative solutions to problems! Click here for Wasted Money.

Size of the Reserve Fund and Surplus

Please refer to the sections that follow, or click here to go directly to Reserve Fund and Surplus.

Size of the Contingency Fund or Surplus

Boards generally like to have a small cushion for unexpected expenditures or small improvements. With a surplus, a contingency fund is not necessary. But when there is no surplus, then, it is a good idea when a budget is around $1 million to have at least $20,000 in the contingency fund. Basically, a contingency fund is a surplus!

Therefore, when a budget has no increase in fees or only a very small increase, but there is a contingency fund or a reasonable surplus, then no one should be concerned because there is money “in the bank” with which to carry out unexpected repairs. But a small increase coupled with no surplus or no contingency fund is a red flag—unless a surplus is expected because of a settlement with the builder, an energy savings retrofit, or large sums of monies owed by a utilities company.

On the other side of the equation, very large contingency funds or surpluses are often accumulated by condos. This is wrong because this is owners' money that is uselessly held "captive" in a bank account. Such monies should rightly be in owners' pockets.

As well, large contingency funds often give managers and boards too much latitude in spending because there seems to be a lot of money around. And, if ever a board or a manager is dishonest, this is where monies could disappear.

Boards should not raise fees when they have large contingency funds, especially when they also have a surplus. Rather, they should use these funds to stabilize fees.

Boards should plan for expenditures within the regular budget, rather than rely on contingency funds--otherwise, lack of fiscal discipline will prevail and "impulsive" spending will occur. Some boards feel good about spending money--while, in reality, they may be doing so uselessly. This is owners' money! Budgets make boards more accountable to owners than do large contingency funds.

Contingency funds, unlike the reserve fund and the regular operating funds for the daily budget, are not mandated by the Condo Act of Ontario.

Reserve Fund

What’s the Reserve Fund For?

It can only be used for replacement and non-routine repairs of common elements and assets of the condo:

For instance, replacement of roof, windows, boiler, carpets, and security system.

Other examples are non-routine repairs to the chiller, the swimming pool, and the parking areas.

A reserve fund is like a savings account or insurance policy for special expenditures that may come up in the future. In some provinces, condos have to have a reserve fund in a bank account that is separate from the general budget account. All monies in this account have to be placed in easily accessible and safe investments, such as GICs or government bonds, and not in the stock market or any other risky venture.

In Ontario, a condo has to carry out a Reserve Fund Study "periodically,"  as per Section 94 of the Act.  This generally has been interpreted to mean "every three years." However, such studies can be expensive, especially for small condos that have tiny budgets. A good rule is to do an initial comprehensive reserve fund study and, then, 3 years later, do an update--which would be less expensive.

This study has to be undertaken by experts with a special designation. They may be members of the Appraisal Institute of Canada or other similar accredited groups such as the Ontario Association of Certified Engineers. The purpose of the study is to examine all the systems (i.e., heating) and other physical aspects (garage, balconies, windows) and give a reasonable expectation as to when they will need to be replaced or have non-routine repairs and how much this will cost at that projected time in the future. 

The engineers present the results of this study to the board along with a fundraising plan. For instance, they may suggest that 10% of the condo fees go into the fund with an increase of 1% each year for the next ten years.

The directors have 120 days during which to decide how to implement this plan or put forth another reasonable plan. After this, the board has 15 days to send to owners an overview of the reserve fund study and how they intend on implementing it. The board then has another 30 days to begin implementing the plan. Generally, this study and plan are sent to owners at the same time as the budget because implementation of the study may affect the budget.

So, all owners receive a summary of the reserve fund study along with an explanation of how it will be put in place. This is then indicated in the status certificate. (Click here for Why Is a Status Certificate So Important?)

Any person planning on buying a condo should consult the reserve fund study and schedule included in the status certificate. Reserve funds that are insufficient could result in unexpected raises in fees or in special assessments in the near future. (Click here for special assessments in Owners' Money Facts)

Directors who fail to maintain an adequate reserve fund with increased contributions or special assessments could be sued by owners in the future. Indeed, owners may see the value of their property decrease or may fail to sell their units because of a deficient reserve fund. The directors’ liability insurance may not cover them if due diligence has not been done. 

Problems with the Reserve Fund

  • The Ontario Condo Act specifies that a reserve fund can be used only for replacement and major repairs but notmaintenance or regular repairs that result from normal wear and tear. These have to be covered in the regular budget.

    Take window frames: The normal wear and tear of the caulking requires that it be redone or reinforced periodically. This may be expensive maintenance, especially in high rises. But this expensive maintenance has to be paid out of the regular budget. In order to be covered by the reserve fund, such maintenance repairs have to turn into a creative interpretation of what “major repairs” can mean. Or, yet, condos may not carry out this maintenance and, as a result, window replacement or major repairs to the frames may arrive much sooner than anticipated.

  • Some older condos, built before 2001, have never carried a reserve fund study or have done one only recently. As a result, the fund may be deficient and special assessments may be levied.

Man Holding Bag of Money

  • Construction costs, price of new windows or even boilers can rise much more than predicted in the reserve fund study. It is difficult to anticipate how much it will cost to replace windows in 20 years.
  • Building standards have deteriorated so that what used to last 10-15 years may now last 5-8 years only. Examples: underground garages develop cracks much earlier than expected (and colder winters do not help this situation). Garage paving may wear out after only 5-8 years while the reserve fund study may have predicted 15 years. Therefore, reserve funds may have to be tapped earlier than predicted.

Upgrades can’t be paid out of the reserve fund. For instance, a broken tile floor cannot be replaced by an expensive marble one. If it is, the difference in cost between a tile and the expensive marble has to be paid out of the regular budget. 

However, within the purview of Ontario’s Energy Conservation Leadership Act, a good case could be made that old windows that are falling apart should be replaced with energy efficient ones, even if this is a form of upgrade.

Surplus, Deficits, and Loans

Surplus (and Contingency Fund)

A condo has a surplus when general revenues exceed general expenditures at the end of a fiscal year. (This does not include the reserve fund which, by definition, acts like a savings account for the future.)

Some condos with huge surpluses and/or contingency funds keep raising owners’ fees. It’s neither a fair nor a good decision. After all, the surplus has been paid by owners. Very large surpluses could be taxed as profits (condo corporations are not generally taxed because they are non-profit corporations).

What is considered a large surplus and/or contingency fund?

A condo with a budget of $10 million and a $150,000 surplus is in a prudent situation. But a condo with a $1 million budget and a $150,000 surplus and/or contingency fund has to use it. A small part of this surplus can be retained to cover unexpected expenditures in the budget. The remainder should be used to either reduce owners’ fees or stabilize them. Finally, it can be used to top up the reserve fund if it is deemed insufficient. However, once monies go into that fund, they can’t be retrieved for anything else.

Deficits

Condos cannot function in a deficit situation. When expenditures are larger than revenues, boards have to use the surplus or contingency fund or increase fees in order to cover this deficit.

Deficits should be erased within one year after they occur. If the usual methods are not sufficient, then special assessments or loans may be necessary. Owners should be very concerned when their condo operates in a deficit mode and certain expenditures that could be postponed continue.

Loans (and Loan By-laws)

It is not a good thing when a condo corporation has to take a loan.

A by-law has to be passed for this purpose, which means that owners can vote against it. (Click here for Owners’ Meetings and Voting) A loan by-law cannot be open-ended: It should not allow the board to borrow at any other time. Rather, a loan by-law specifies what the loan is for, the amount, and the time period. If, in the future, more borrowing is necessary, another by-law has to be passed.

Both the budget and the status certificate should reflect a loan by-law and the loan itself. There may be exceptions but, generally, loans devalue a property because prospective buyers will not want to invest in a condo that has debts.

But a loan may be necessary when, say, the roof leaks and needs to be replaced and the reserve fund is empty. This loan can be repaid via higher fees or a series of special assessments. (For information on special assessments, click here for Owners' Money Facts)

Misuse of Funds, Kickbacks and Fraud

In this section, we look at two situations that frequently occur in condos and that are hushed: no one wants to talk about them!

These are misuse of money and kickbacks and, somewhat less common, but nonetheless occurring far more often than is openly discussed: fraud and outright theft.

All three of these situations probably cost tens of millions of dollars each year to Ontario condo owners.

Misuse of Funds

Misuse of funds or waste of condo moneys by management companies and boards of directors is a frequent occurrence and too often goes unnoticed even by well-informed owners.

Condo monies are wasted when:

  • repairs are done by an expensive contractor when an equally competent one would carry them out for less; this generally occurs when jobs are not tendered or when managers and/or boards have a personal preference for a particular contractor (Click here for letters about Condo Fraud, Kickbacks, and Conflicts of Interest);
  • alterations are made (such as clean outs in units for the kitchen stacks) to solve a problem (such as back ups in sinks), before other inexpensive solutions have been tried, such as educating residents and asking their cooperation; or even before testing on a small number of units to see if these alterations will bring relief to the problem in question;
  • expensive equipment is installed but is not used; one can think here of camera systems as well as building automation system (BAS);
  • constant upgrading of common areas are carried out just to please contractors, managers, or boards;
  • contractors are hired to do work that an employee, such as a superintendent, should be doing as part of his or her daily or weekly routine;
  • employees or managers do not put the time they are paid for;
  • the corporation law firm is used to write routine correspondence because neither the president nor the manager write well or can be bothered to do so;
  • repairs are carried out in an improper sequence so that the first set of repairs have to be done again after the second set is completed;
  • regular contractors fail to use certain procedures to diagnose a fairly routine mechanical problem and, instead, suggest that the board hire an expensive consultant;
  • regular contractors are asked to diagnose a technical problem and do the repairs themselves; often, it is preferable to hire an independent contractor or engineer to diagnose serious problems to avoid potential conflict of interest;
  • boards and managers treat themselves to expensive meals during board meetings;
  • utilities, such as electricity or water, are allowed to be on when unnecessary or to be overused;
  • expensive parties are given which are not paid for by the individuals who attend them;
  • managers or boards mail letters to residents that could easily be posted on the available bulletin boards in a building.

What can an owner do?

As evidences in the letters received, there is unfortunately not much that owners can do because, under the current Condo Act, they are not adequately protected. Many owners have tried to object but have subsequently been threatened by the manager, board, and even the condo lawyer.

Owners can:

  • keep a diary of occurrences they detect;
  • see if they can find a contractor who might give them a quote for a job that was done and seems unduly expensive. (Again, this presumes that owners have had access to documents...);
  • requisition a meeting to discuss the issues, keeping in mind that discussions are not binding;
  • requisition a meeting to remove the wasteful board. This may be the only solution if the misuse of funds is serious. But this also presumes that other more honest board members can be found.  And this also presumes that requisitioning a meeting will be successful and will not, instead, result in owners who participate being harassed and threatened... and even receive unwarranted legal letters. (Click here for Requisitioned Meetings)

Kickbacks and Fraud

Since the inception of this website July 2009 and up to the end of August 2012, 128 letters (or 8% of all letters) have been received containing credible evidence that kickbacks and/or fraud are occurring in particular condos. Only six of these cases were under investigation by the police or a court ("forensic audits") and, as such, the writers could not divulge the evidence.

In condos, kickbacks occur when a manager, a management company, or a board member (generally the president) receive monies, special services for free, or large gifts from various contractors in return for contracts, for allowing higher invoices, or even work that is unnecessary. Eventually, these kickbacks are paid by owners via their fees as these contractors recoup their kickbacks by overcharging on their invoices to the condo.

Fraud takes the form of managers, board members, or contractors using corporation money for themselves. Fraud can be small or large.

In Canada, both kickbacks and fraud are illegal.

Examples of fraud:

  • A manager has work done on her house or a president has his or her suite improved while the contractor is doing other work in the building: The contractor charges the corporation instead of the president. This can be difficult to detect.
  • Cheques are forged by a board member or manager for their own benefit.
  • Cheques are paid to a fictive contractor for services that have never been rendered..
  • Repairs to a condo are not carried out: The monies disappear from the books and go to a manager or a board member.
  • Monies are transferred little by little to someone else’s account or pocket book. This is easily done with petty cash or funds intended for gifts to staff or parties.
  • A manager or a treasurer volunteers to buy furniture for the lobby and party room; while so doing, he buys items for himself.
  • Invoices are padded and include services not rendered or, yet, "repairs" are carried out that were not needed.
  • Board members pay themselves a salary, even though condo owners have not voted a by-law that would allow such payments--and even sign their own cheques!

In Canada, none of these actions are legal but they are very difficult to prove, especially when no tendering process occurs or when it is flawed. For instance, quotes can be solicited from other contractors who are known to be very expensive. This way, the elected contractor’s quote appears reasonable. Please consult Condo Fraud, Kickbacks, and Conflicts of Interest in Readers Respond for various sad examples.

What can owners do?

Easier said than done because, in such situations, board and managers refuse owners’ requests to examine relevant records. Or, yet, records do not exist.

And the Condo Act in Ontario, as it has been interpreted in at least one Court case, has not helped matters at all. Indeed, it has been concluded that owners who even go so far as to successfully obtain condo documents (as the Act allows them to do), cannot use these documents to question board members or even to conduct their own “investigation.” This in effect deprives owners of many of their rights.

Owners who suspect that kickbacks or fraud are occurring should first of all try to obtain documents and keep quiet about it—then approach their local police station... and hope that they will be heard. One owner reported that he was told at his police station, “The police don’t do condos.” Of course, this is not true. Four other owners, including a president, were simply rebuffed and shrugged off at their own police station. If contacting the local police station fails, perhaps contacting the Office of the Independent Police Review Director might be helpful. In all circumstances, owners should keep a record of their contacts and activities and always retain a copy of whatever records they pass along to investigators.

So what about the corporation’s auditor? It could be advanced that, in some cases, he or she may be able to detect fraud. Even though elected by owners at the AGM, auditors are often loath to get involved in such matters for which they may themselves only have suspicions. This is particularly so when the culprit might be a management company: Management companies and auditors have many faceted relationships. One auditor told an owner that it was not their mandate to do “forensic” audits.

And what about the corporation’s lawyer? In theory, such a lawyer should listen and many do. However, it is also an unwritten “rule” that solicitors do not talk with owners but only with the board and manager—and generally only with the president who represents the board. In many cases where owners tried to approach the corporation’s solicitor, they were threatened with legal action. (Click here for Issues with Lawyers)

Kickbacks and fraud are tricky issues because an owner could be sued or threatened to be sued for defamation by the board or a manager were he or she to make such allegations. Whistle blowers are not protected under the Condominium Act of Ontario. As well, kickbacks and fraud are difficult to substantiate, which is no excuse to do nothing about it. Unfortunately, the onus resides on owners who are already very powerless and helpless--even boards can be helpless. This is one more reason why condos need more protection and a stronger Condo Act.

If owners have substantial evidence, particularly through the financial statements, that theft or fraud or kickbacks are occurring, they should, with the help of a lawyer, get a court order under Section 134 of the Condo Act. Litigations, if necessary, could begin after--but this is costly and successful owners may not recoup their monies, under current legislation.

In addition to these problems, one has to consider theft of food, tools, paint, and other items on the part of various condo staff and contractors. It is impossible to tell how often any of this occurs.

Financial Statements, Cheques, and Owners' Permission

Financial Statements

Generally, boards of directors obtain monthly financial statements from their management company or an accounting firm. These statements present what has been budgeted for each category (i.e., electricity) for each month and what was actually spent that month. A list of all cheques cut out for each category is attached to the statement.

A board who is accountable and has a policy of transparency may want to post a monthly financial statement on a bulletin board accessible to residents (rather than guests).

Cheques

Have you ever wondered who signs cheques for expenditures in your condo corporation? Two signatures are required. Often, one is the designated person in the management company and the other is one or two designated board members, usually the treasurer and the president. Or both signatures come from the board of directors.

Owners' Permission

There is a general rule in the Ontario Condo Act that owners’ permission is required when a projected expenditure for an upgrade, an improvement, an addition, or a change is more than 10% of the current annual budget. Or, in any month, if the expenditure is more than either $1,000 or 1% of the budget. Owners can requisition a meeting to vote it down, even if it could be covered by an existing surplus. (Click here for Requisitioned Meetings)

However, expenditures that are necessary to maintain and repair the property are a board’s duty, no matter the cost. No permission is required and even a notification to owners is not legally necessary. It is nevertheless advisable and respectful to inform owners and engage them in the challenges faced.

Technical or Performance Audits

Within 10 months after a condo’s registration, the new condo board has to hire an appropriate engineering firm and carry an audit of the condition of the building(s) for the purpose of the New Home Warranty Program (or Tarion in Ontario).

During this audit, all a building’s systems and structural components covered by the warranty act are inspected. The board or manager may point toward areas that need closer scrutiny.

The resulting report will list deficiencies—just as builders do for suite owners after they take possession of their unit. The builder then proceeds to do repairs and adjustments. However, unavoidably, the builder bargains on some issues (the most expensive ones) or refuses to go along on other issues and appeals to the Tarion program. Boards can also appeal and a mediation process may take place.

Therefore, at the end, some deficiencies may remain. Boards may bargain with builders and eventually an agreement is reached. In some cases, in lieu of remedying some deficiencies, builders may pay condos an agreed upon sum of money with which condos will themselves carry out adjustments. This entire process may take years and some corporations end up suing the builder.

Is suing the builder a good idea? Let’s first say that no one should have to sue builders because we should all be better protected by Tarion and the Condo Act. Second, these lawsuits rarely end in court and, when they do, it can be several years after their initiation, perhaps at a cost of over $60,000 or more. Out of court settlements are rarely totally satisfactory and legal fees may remain. All of this represents monies that could have been better spent for the condo itself. Some lawsuits are, however, necessary and the condo’s law firm will advise accordingly.

Energy Saving Measures

Both federal and provincial governments currently offer grants for condos that reduce their energy consumption by doing retrofits or adding measures such as solar power. Cities may also have their own incentive programs.

Energy savings measures are beneficial to the environment and are also good business because a great deal of money can be saved.

What kinds of retrofits are worth it? Measures that save a lot of energy and, thus, have a short pay-back period. “Short” generally means less than 8 years, and, usually, pay-back occurs within 2 to 3 years. That is, the monies spent on the retrofit will have been recovered in 2 to 3 years.

Easy and Inexpensive Measures

  1. Encourage residents to turn to CFLs or compact fluorescent lighting. CFLs use 75% less energy than conventional bulbs and last much longer.

    Compact Fluorescent Bulb

    CFLs currently contain a bit more mercury than conventional bulbs and should be safely handled when they break. Pregnant and breast-feeding women as well as small children should not handle them. They are otherwise safe.

    What to do if a CFL breaks? Open a window and leave the room for about 15 minutes. Then, wearing gloves and with a paper towel, scoop up the bits and throw them in a bag. On a carpet, use sticky tape to pick up the bits. Vacuum and remove the bag. Double bag and place in an outdoor thrash bin or bring downstairs to the superintendent. Wash hands thoroughly.

    Very shortly, probably within 6 years, it is expected that LEDs, or light-emission diode bulbs, will replace CFLs, because these bulbs burn much less energy than CFLs and last even longer. Currently, LEDs do not produce sufficient light for an entire room and are still very expensive.

  2. Educate residents about the merits of energy conservation with the help of notices posted on a regular basis.
    • Emphasize turning off lights, TV, and computers when not in use;
    • microwaving rather than using a conventional oven;
    • doing the dishes and laundry only with a full load;
    • using a rack to dry clothes;
    • not leaving the frig door open too long.
  3. The double message conveyed in these notices should be: Energy conservation is good for the environment and saves money. (People are receptive to this message...)

  4. Also educate the staff about the merits of energy conservation so that lights are turned off in the electrical, mechanical, and garbage rooms upon leaving.
  5. Completely turn off one or two elevators (when a building has at least three) from midnight to 6 am.
  6. If all the garbage rooms off corridors are along the same electrical line, install a simple timer to turn lights off from 10 pm to 8 am—or according to hours of use.
  7. Educate residents and employees to use less water. Water is quickly becoming an ever more expensive item on budgets. Occasionally, place notices asking residents not to leave water running when they rinse dishes, wash their teeth and hands.
  8. Dripping Tap

  9. In the warm season, raise corridors’ cooling system to close to 25c. During cold months, lower heating to about 18c. Corridors do not need to be as cool or as warm as suites.
  10. The pool and/or whirlpool heating can be shut down for a few hours at night after a thermo cover has been installed to retain heat.
  11. Depending on the type of ventilation system in corridors of a mid- to high-rise building, some or all ventilation fans that force air into corridors could be shut down for the night or part of the night. But this can only take place if a timer can be installed or if a building automation system exists.

    As well, this can’t be done if, without pressurization, the end result is that no air is flowing in naturally from these vents themselves and other areas.

    One easy way of testing for natural air flow when forced air is shut down is to put a hand around a suite’s door; if air is flowing naturally, one can feel it.

    If this initiative is feasible, it can save several thousand dollars each month both in electricity in all seasons and gas in winter--depending on the size of the building and the number of forced air units, as well as the condition of the motors.

    But, in winter, when there is a spell of extremely cold nights, especially on windy days, it is preferable to let fans work so that the frigid weather does not stall motors when they restart in the morning. In other words, managers have to be vigilant and follow weather forecasts.

  12. Where provincial legislation gives precedence over the Act, installing individual smart meters in each condo that does not have them can result in substantial savings. With this legislation, no amendment to the declaration of a condo is necessary—no vote from owners required.

    Individual meters generally result in a 10 to 20% reduction in electricity consumed by residents in their suites: Residents become responsible for their consumption and no longer leave lights or the TV on when they leave. They use ovens, dishwashers, and laundry equipment more wisely.

    Usually, electricity consumed in suites for all appliances and lights constitutes about 25 to 33% of the electricity used in the building. Therefore, smart individual meters save 25 to 33% of the costs of electricity for the corporation's budget.

    After smart meters are installed, owners’ fees are readjusted downwardly on a pro-rated basis. This readjustment may take place over a period of two years.

  13. Smart Meter

  14. Have all toilets in suites tested for flange leakage—this is a simple procedure carried out by the superintendent or a plumber who throws a colouring pill in the water tank. Requiring owners with leaky valves to repair or replace them is the next step, otherwise a great deal of water will be wasted.

Measures Requiring Some Funds

  1. Changing lead boilers for hot water and heating to highly efficient ones.
  2. Retrofitting all lights in garages, corridors, and common elements.
  3. Installing thermo covers for pool and whirlpool.

    Pool Thermo Cover

    The cover can be rolled manually (not difficult and less expensive) or it can be automated (more expensive).

  4. If the garage ventilation fans are on at all times, putting them on carbon monoxide detectors can lower electricity costs substantially. This initiative will also prolong the life of the motors.
  5. Adding variable speed drives to the fans that bring air in the building. This change may not be useful in saving energy and money in buildings where air flow is already limited.
  6. A building automation system (BAS) may help the implementation of some of the measures suggested above. This is a software system installed in the management or superintendent’s office.

    But such a system also carries disadvantages, mainly in terms of initial price and costs associated with training managers or superintendents. In residential condos, these automated systems are often underutilized by managers, especially when there is a high turnover rate. As a result, the savings that could be obtained are not forthcoming.

    These systems cost anywhere from $80,000 and upward—substantial sums, especially when they are not properly used afterwards. They can be expensive to maintain and particularly to upgrade later on. As well, some condos keep upgrading their system, each time requiring training for managers and, often, these upgrades are not used.

  7. When changing windows that break, have them replaced by energy efficient ones.
  8. Whenever feasible, pool water should be heated by solar energy. Chemicals, or salt water, which is corrosive for pipes, can be replaced by a UV sanitizing system. (Consult information contained in the Readers Respond pages: Click here for Useful Tips for Buildings.)
  9. Adding solar energy in general, although this item is still expensive and the pay-back may still be quite long, may be considered. Many governments provide incentives, including Ottawa’s Ministry of Natural Resources.

Solar Power