I don’t use profanity in my blogs so I’m going to open by referring you all to Gordon Gekko’s (Michael Douglas) opening line of his lecture in Wall Street . . . “Money Never Sleeps“.
If I were giving condo buyers, condo investors, condo owners and condo occupants a similar lecture on Condoland, I could very well open with the exact same phraseology.
Condoland has proven a very unfair playing field for consumers.
I started selling condos for developers back in 1980 for Toronto Reichmann Family and am the only person that I know of who can legitimately tell you about the pending nightmare that is Condoland.
In Condoland today the ONLY entity putting up any money is the average consumer (whether as an end-user or as an investor).
Consumers put up all of the money and blindly assumer that there are protections in place to protect them, across the board.
Tragically, just the opposite is the reality.
The Condo Act, has been acknowledged for decades as insufficient in protecting the consumer.
Isn’t protecting the consumer the sole objective of government.
When it comes to Condoland, all three levels of government (Federal, Provincial, and Municipal) serious fail the consumer.
It appears that the dysfunction in Condoland’s governance (Condo corporations being run by novice volunteer board members) is simply a reflection of the lack these three levels of our government.
Any way to cut it, consumers in Condoland get shafted on absolutely every front.
There’s the Condo Act, which primarily protects the only the developer and property manager.
There’s the Tarion Warranty Program, that works as the “agent for the developer” in deficiency disputes despite each buyer having the registration fees passed onto them as “adjustments on closing“.
Then there’s an obsolete and out of date Building Code to which all developers commit to aspire to meet only the “minimum standard under the Code“.
Then we realize that there is no regulation in the high rise construction industry resulting in all these glass towers potentially becoming financial IED’s!
I’ve been preaching for over a decade and a half to condo buyers about how Condoland is not a level playing field.
I’m releasing my upcoming Ebook “Crisis in Condoland” to expose just how one sided this entire process is and it is totally at the expense of the consumer.
I’ve just delayed the release of this comprehensive analysis on this multi-billion a year shake down as the detriment to the consumer is not limited to the way they are allowed to be sold.
I’ve just learned that there are serious technical (“Construction“) issues regarding most condos built since 2000!
I’ve also learned that there is a “Science” component to what I see as a potential “Financial Tsunami” that could dwarf the Sub Prime fiasco in America!
These two new issues appear to hold the very real potential of not only financially devastating condo corporations, but also financially devastating the owners of these condo units, and like a stack of dominos, delivering catastrophic bankruptcies financially impacting our banks and also Canada Mortgage and Housing (guarantees loans under 20% deposit) which of course would take our entire economy down the drain.
Preliminary indications suggest that the lack of adequate regulation has led to a masquerade ball, where developers are allowed to legally promote and sell “the ultimate in high end residential condos” while building on the lowest bid.
I’ve learned that Ontario (where Toronto alone has more high rise residential condos being built than any other city in North America) was a blackmarket construction industry or, as the government calls it an “Underground Economy”, at least according to The Province of Ontario, Ministry of Finance January 13, 2016 Report.
- “Over the period of 2007 and 2009, the annual estimated revenue loss to the WSIB, the tax system, the Canada Pension Plan, and the EI system from underground practices in Ontario’s construction industry was in the order of $1.4 Billion to $2.4 Billion” (Ontario Construction Secretariat).
A 2015 Fall Economic Statement included the following comments:
- “Parliamentary Assistant Laura Albanese will also consult with the construction sector in the coming months on measures the Province could take to level the playing field and enhance the competitiveness of legitimate contractors”.
- “Parliamentary Assistant Laura Albanese is engaging with key stakeholders in the residential construction sector in Ontario to better understand the scope of the underground economy (UE) . . “
- “According to Statistics Canada the underground economy accounts for $42.4 Billion in annual economic activity in Canada”
- “According to Statistics Canada the underground economy accounts for $15.3 Billion in annual economic activity in Canada”
- The residential construction sector comprises almost 30% of Ontario’s underground economy ($4.5 Billion in annual underground economic activity”
My basic math tells me that with Toronto (alone) being the number one market in North America for high rise residential condos, that a big, big chunk of this $4.5 Billion is being paid out in Condoland.
Does anyone believe that this underground economy requires qualifications on behalf of the workers in it?
Commercial buildings are built using Union workers and I’ve recently learned just how comprehensive the ongoing work related education under which every union worker is required to go.
Did I mention that Condoland is a virtually unregulated wild west?
I don’t think that it is unfair to assume that, if much of these billions are ending up in pockets of construction workers hired on the “lowest bid” basis without any requirement to possess credentials and/or proof of proficiency in whatever trade being offered, that is simply logical to assume that not everything is being done correctly.
As residential condos are consistently the major investment in most consumer’s lives, isn’t it heart warming to think that some person could be hired to install the window wall (large panel of glass) with absolutely no training, background or knowledge of the trade.
So, I’ve got a couple issues with the transition from “punched wall” construction (where a certain proportion of any wall has to be met with a structural material with windows then installed into that wall structure) to Window Wall.
Would you believe that the lifespan of these glass walls is around fifteen years?
How long are you planning on living in your high rise condo that you bought?
If you are, or intend to be a condo owner, you will want to tune into my blogs as I lay out all of the hidden deficiencies that I’m discovering!
The quick read is that condo boards are not factoring in the replacement of all this glass in their Reserve Fund Study!
So even if everything goes right in Condoland, in about 15 years your condo board is going to have to replace those Window Walls.
Don’t think for a minute that you are going to be allowed to live in a condo unit with the exterior walls removed so there is double the expense!
And the condo corporation, presently not accounting for this, may be caught with its pants down (financially) and not have the money to pay for all of this (moving and all may be your own responsibility) at which time 100% of the debt transfers proportionately to each owner.
What if you don’t have the money to either pick up what the condo corp. couldn’t, or pay to move yourself out and back in while staying somewhere for the months that will be required to fix the building?
What if a bunch of owners go broke as a result of not being able to meet these costs?
But all of this is the lessor fear!
With most of these Window Wall installations potentially being installed by the Underground Economy, does anyone out there think that there’s a very realistic chance that these Window Walls are NOT BEING INSTALLED PROPERLY!
Here’s the heart of the matter! The cause of the Tsunami!
I have in my possession real life photographs of Condoland buildings under construction where flawed installation is obvious.
I will be publishing these photos shortly. I’m just getting technical clarification and information to be able to educate you on this cancer in Condoland.
Be sure to check back in frequently.