Collectively, we owned the old Champlain Bridge. We neglected it for years, pumped money into it to keep it afloat in its final days, and eventually had to shell out more than 4 billion to cross the same shore, using the same access routes. Can we draw a parallel to co-ownership? While it may seem logical to think that low co-ownership fees are an advantage and high co-ownership fees are a disadvantage for a buyer or a long-term co-owner, think again because reality might be quite different.
Many co-ownership buyers have the same reflex as property buyers: to stretch their purchase budget a bit, buy, and then hope that there won’t be too many unforeseen issues in the near future. However, (even though it’s not a good idea) an individual homeowner can stretch out a renovation or do it themselves. A co-owner does not have this control. As a result, the specter of a special assessment can loom over a co-owner at any time, and some co-ownerships are more prone to special assessments than others. Why is that?
Is a co-ownership with high fees necessarily a bad one? It's true that a co-ownership that offers a variety of common areas such as a swimming pool, a gym, a central garden, and recreation rooms will have more fees than one that offers none. It's also true, for instance, that a co-ownership pool is more expensive to maintain than a private pool. But it's equally true that these entertainment areas are generally found in large and very large co-ownerships. So if an individual can afford to have a gym, a pool, and a yard to maintain on their own in their suburban house, the bill for all this, divided among 200 co-owners, will not be that high. Therefore, this is not a major factor in co-ownership fees. On the contrary, a co-ownership that claims to have low co-ownership fees is portrayed as being well-managed, frugal, and economical. But is that really the case?
In both scenarios, the answer does not lie in the monthly amount of the co-ownership fees but rather in the following factors:
A co-ownership that neglects these points in the short term will have low co-ownership fees. A co-ownership that does not invest in points 1, 2, and 3 will generally have more claims (point 4). A co-ownership that neglects these four points will sooner or later hit a wall. This wall will present itself in two forms:
Therefore, one thing must be remembered: a high amount of co-ownership fees may indicate that the co-owners are generally well-off and demonstrate foresight. The funds will be replenished, disbursements for major works planned and staggered, and maintenance will be periodic and efficient. For other co-ownerships, high co-ownership fees will only be the catch-up from several years of neglect, which former co-owners will have benefited from at your expense. Keep your eyes open!
Charles-Antoine Carra, CPA
Damage insurance broker
514 374-9944 #259
3737 Crémazie Est, bureau 1001, Montréal QC H1Z 2K4
