Condo Conversation Corner - Winter 2025

Article from Volume 12, Issue Number 1, 2025

Condo Conversation Corner - Winter 2025

By Alan Forbes | Other articles by Alan Forbes | Regular Column

In this edition, we have five topics of interest:

Presidents’ Forum review
Condo trash
The need for a reserve fund
Property appraisals
Municipal agreements

Note that frequent references are made to Manitoba’s Condominium Act and regulations.

Presidents’ Forum review

Twenty-four condo board presidents attended our Presidents’ Forum on Wednesday, Nov. 27, 2024, well-supported by seven past and current CCI directors. There were also a few presidents from self-managed corporations.

All participants seem to enjoy the lively discussions as well as the wine, cheese, cold cuts and crackers.

In contrast to prior forums, many of the presidents’ comments about their property managers were, refreshingly, positive. As well, the usual issues were raised — special assessments, underfunded reserves and the perceived pressure to keep fees low.

Our plan is to continue to offer the Presidents’ Forum twice a year, with the next one scheduled for Tuesday, May 15, 2025.

In addition to the twice-a-year, in-person forums, we encourage presidents to join our Facebook Presidents’ Forum Group to continue or join the discussions.

Condo trash

We recently received an inquiry about waste management from a resident whose downtown condominium was infamously mentioned in a Winnipeg Free Press article headlined ‘Trash volcano’ spreads repeated concern in January 2023.

Prompted by that inquiry and because we occasionally get inquiries from property managers and condominium boards about waste management, we thought it would be useful to point readers to the City of Winnipeg’s guidelines for waste management and proper dumpster sizing.

The City’s “MyUtility” page recommends dumpster sizes as shown in the chart below. The page says: “Multi-family homes that have eight or more dwelling units must sign up for the City's garbage bin collection service. These properties must obtain their own front-load bin in order to receive service.”

The following table shows the recommended bin size for once-a-week collection.

# dwelling units	dumpster size
8 - 12	1.5 cubic metre (2 yards)
13 - 19	2.25 cubic metre (3 yards)
20 - 25	3.0 cubic metre (4 yards)
26 - 38	4.5 cubic metre (6 yards)
39 +	Contact 311

The need for a reserve fund

We had an inquiry from a property manager on behalf of a highrise condominium Board of Directors, looking for information to emphasize the importance of reserve funds. At around the same time, residents of a bare land condominium corporation were wondering if they were contributing enough to their reserve fund, since they did not have a reserve fund study (RFS).

The reserve fund and the associated study are important to ensure there are adequate funds available to properly maintain the common elements for the benefit of current and future unit owners. Not maintaining the property would result in depreciated property values and increased risk of insurance claims, either for personal injury or property damage. Without an adequately funded reserve, special assessments and/or condominium corporations loans would be required to fund needed repairs and renovations.

The condominium act clearly requires a reserve fund and describes its purpose and requires an RFS. The pertinent sections from the condominium act include:

Reserve fund

143(1) A condominium corporation must establish and maintain a reserve fund, the purpose of which is to provide a sufficient amount that may reasonably be expected to fund the corporation's obligations to maintain and repair as required by Part 9 and the corporation's declaration.

Part 9 excerpt — Condominium corporation's duty to maintain

180(1) Subject to the declaration or a change agreement, a condominium corporation has a duty to maintain the common elements.

Interpretation — repairs and replacement

143(2) The types of repairs and replacements that may be funded by the reserve fund are ones that may reasonably be expected to be necessary over time but that are not normally required on an annual basis. The following are examples of such repairs and replacements:

(a) major repairs to the roof or its replacement;

(b) major repairs to, or replacement of, the structure or exterior of a building on the property;

(c) major repairs to, or replacement of, the heating, air conditioning, electrical or plumbing systems;

(d) major repairs to, or replacement of, an elevator;

(e) major repairs to, or replacement of, the laundry, recreational or parking facilities;

(f) major repairs to, or replacement of, the sidewalks or roads;

(g) major repairs to, or replacement of, the sewer system or utility service connection to the property.

Reserve fund study

148(1) Subject to the regulations, a condominium corporation must ensure that a reserve fund study is conducted.

Purpose of study

148(2) The purpose of the reserve fund study is to determine the appropriate amount required for the reserve fund based on the estimated cost of major repairs to or replacement of the common elements, such as those referred to in subsection 143(2), and the expected life span of the common elements.

The condominium regulation requires that the RFS be updated at least every five years.

Time period for conducting studies

29(2) A condominium corporation must ensure a reserve fund study is updated by the end of the fifth year covered by the study or latest update.

We have covered the topic of reserve funds and reserve fund studies numerous times in our lunch & learn program, recordings of which are available on our website. Here are the podcasts and/or presentations that are available:

Reserve fund studies — Nov. 19, 2019
Condo corp. financing: an alternative to special assessment — Feb. 20, 2020
Going beyond reserve fund studies — total cost of building ownership — Jan. 20, 2022
Climate change and construction — Nov. 17, 2022
Funding options for condo corporations — May 16, 2024
Building maintenance and preventative maintenance — June 20, 2024

Property appraisals

While in conversation with residents of a decades-old bare land condominium, the topic of property appraisals came up. They were unaware of the requirement in section 185 of the condominium act to have an appraisal every five years.

Appraisal required

185(9) Subject to its declaration and by-laws, the condominium corporation must obtain, before the first unit is occupied and at least every five years after that, an appraisal that meets prescribed requirements for the purpose of calculating the replacement cost under clause (3)⁠(a).

They did at least recognize the requirement to have insurance and did have a corporation policy that included director and officer liability insurance. However, without an up-to-date appraisal, they had no idea if they were adequately insured. Section 185 of the condo act also documents the insurance requirements and specifically mentions the replacement cost, which comes from the appraisal.

Property insurance

185(1) A condominium corporation must obtain and maintain property insurance, on its own behalf and on behalf of all unit owners, for damage to the units and common elements that is caused by major perils or any other perils that may be specified in the corporation's declaration or by-laws.

Amount of coverage

185(3) The insurance required under this section must cover

(a) the replacement cost of the property damaged by perils to which the insurance applies; and

(b) any additional costs resulting from zoning and other legal requirements related to current construction standards, including coverage for the loss of value of any undamaged portion of the property, demolition and debris removal and any increase in the costs of construction, to the extent that the coverage is available at a reasonable cost.

For more information, we have some content on our website for these topics in the form of podcast recordings and/or copies of the presentation slides.

Municipal agreements

First, a bit of background on the condo property tax inequity issues. Municipalities have no freedom to provide tax relief to condos even though

condos provide higher density living, making more efficient use of municipal infrastructure and
condo residents are a growing segment of the population (8 per cent of the population in Manitoba, according to Statistics Canada in 2021) and
condos house fewer residents per dwelling unit as compared to single-family homes and so produce less waste per dwelling unit (both garbage and recycling) and, lastly,
condos have common walls and floors, which reduce the energy required for heating and cooling, thereby reducing demands on Manitoba Hydro and reducing greenhouse gas emissions.

So, why don’t municipalities have the freedom to provide tax relief so as to encourage more condos and reap the benefits?

A prior newsletter article, Property tax fairness for condos (or lack thereof), highlighted the apportionment rate for condos. The apportionment rate is the same for condos as it is for single-family dwellings, even though condominium corporations have to pay for many services for their property that are provided at no charge for owners of single-family dwellings. These services include maintenance of hydrants and street lights, snow clearing and hauling, sewer and water maintenance, to name just a few.

We know of condominium corporations in at least two municipalities that have successfully negotiated agreements to provide some additional services in lieu of tax reductions. The success was neither quick nor easy — it took a few years and required collaboration from other corporations in the municipality. The process started with contacting other condominium corporations, sharing ideas, developing a presentation, getting facetime with municipal councils, following up and eventually getting a motion passed in council to provide the agreed-upon services.

If you want to contribute to the discussion, you can submit a comment on our website or send us an email.

Disclaimer

CCI Manitoba is unable to provide specific legal advice. We recommend that you speak to a lawyer regarding the challenges or problems you may be experiencing. A list of lawyers who are Professional Members of the Manitoba Chapter of the Canadian Condominium Institute is available on our website.

Alan Forbes lives in a condo and is a director of his condo corporation. He also is a director of CCI Manitoba and is its vice-president.

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