Statement calls on action from policymakers
The Canadian Institute of Actuaries (CIA) has released a new report that outlines the risks associated with condos.
The statement called on policymakers to focus on repairing, replacing, and renewing the “common elements” in condo buildings – these elements being the roofs, pools, elevators, and parking lots.
The report also encouraged condo buyers to hold a “sound” amount of reserve funds.
“For many Canadians, owning a condo is their most significant life investment,” said Jean-Sébastien Côté, FCIA and statement co-author. “It’s crucial that all stakeholders understand the value of this asset and its associated risks. By working together and taking proactive steps, we can ensure the longevity of Canada’s condominium infrastructure.”
The report also provided recommendations to owners, condo boards, and legislators for safeguarding the longevity of condo infrastructure in Canada.
In particular, policies should focus on mitigating the impact of climate change on properties, as well as addressing interest and inflation-fuelled gaps in financial management by condo boards.
“Stronger government intervention is needed to guide proper estimation of the future costs of maintaining and repairing this infrastructure as it ages,” said John Nguyen, co-author.
The statement called for the establishment of a broader education system that will help keep boards and condo owners on the same page when it comes to insurance, legislation, and finance requirements, as well as other related issues.
“Condo owners need to understand that this type of investment involves sharing risks with others beyond their own unit,” said Henry Chio, FCIA and co-author. “They should be proactive in learning about the financial health of their condo association, getting to know their condo community and engaging with their board.”
