After almost four decades of every day, in the field, involvement in Condoland, I am so disenchanted with the entire concept of condos, that there really is little else for me to do than publish my book, Condoland, The Real Condo Game.
I’m done as a Realtor as I just don’t see investing in Condoland these days.
I’ve been talking about publishing this book for a couple years now but it really is the time now to just get it out there.
Publishing the book means giving up my real estate license and I’m ready to do that because that’s the only way things can ever get better is to air all the dirty laundry with the hope of a clean start.
You see, in Condoland, everyone is “dirty“! The game is so outrageously “rigged” against the poor consumer, who is by the way, the only one that puts up any money, emotion, which makes the abuse only that much more overbearing.
Our entire country houses the population of just 10% of our American neighbours to the south.
Cities like New York, Chicago, Miami are all greater than 90% bigger than Toronto yet over the past half decade or more Toronto has boasted more new pre-sale condo developments than all of them.
I was amused to read an article the other day about how Syrian refugees will impact the Canadian real estate industry. I don’t believe that many refugees will be looking at $1000/per square foot units in Condoland.
The bottom line is that the construction industry equates to a significant indicator in the employment picture in Ontario.
Actually, an economist for a major hedge fund recently shared with me that “without the construction industry jobs and civil servant jobs our economy actually ‘flat lined’ a few years back“!
So you can see that the Provincial Government has a vested interest in the ongoing perpetuation of Condoland (despite the physical product being deficient!).
And you can understand why Federal Governments who enjoy “income tax” dollars from all those wage earners so they support the perpetuation of the myth of residential condo ownership.
The truth is that the residential condo industry that was originally envisioned as a means for Canadian consumers to be able to own a home in this key residential component of the Canadian real estate industry.
But tragically, the dream ended up a nightmare for those legitimate consumers simply wanting to enjoy ownership of their own homes.
The residential condo industry, back in the early 1980’s when I first entered the condo sales industry in Toronto, had a very tough start!
Canadians are very conservative and back then, the concept of “owning your own home in a high density high rise building with amenities” was simply something that Canadians held to there, “let’s wait and see” approach to things and resisted.
I can recall beautiful townhouses in Harbour Square having difficulty getting $80,000 for back then that today sell in the $800’s!
There was no Harbourfront when I accepted the challenge to turn around faltering sales in the Reichmann’s Queen’s Quay Residences.
Toronto’s harbour front back then was a desolate wasteland. Today, where there are dozens of high-rise high density towers there were only three developments, Harboursquare, Queen’s Quay Residences and King’s Landing.
The concept was initially for “owner-occupiers” to enjoy a lifestyle that detached housing alternatives simply could not match.
But with the amount of consumer resistance to the concept of owning and living in a condo, we immediately turned our sites to global investors.
Toronto condos, over the decades since have morphed into “an unregulated commodities futures market“.
The “Right to Assign” came into play around 2007 when I actually did the first one recorded in Condoland when a client in Paris France died and she and both of her daughters were on title to a condo unit that she had invested in that was about to close.
Almost over night this “Right To Assign” the Agreement of Purchase & Sale to a to-be-built condo unit (although initially said to be “illegal” as the Assignor is actually selling something that they do not own) became not only acceptable but now has become a critical marketing “tool” for developers to recruit Realtors to promote their product.
Has no-one asked “how it is that Toronto Canada is building more condo units than ANY other North American city“?
Do not the laws of physics or basic supply and demand apply these days?
I have never been a fan of quantitative easing and I remain adamantly opposed to our government using our tax dollars to artificially buy down mortgage interest rates to lure consumers into speculative investment in Condoland.
Toronto Live recently stated in an article “that The City of Toronto generates upwards of $10 Million per tower in application fees and building permits”!
So we know that the local Municipal Government loves Condoland, and the Provincial Government loves Condoland, and the Federal Government loves Condoland, all due the prolific “cash cow” that Condoland represents.
But you’ve got to remember that the consumer is the ONLY ONE putting up all the money, in deposits and mortgage payments in most cases.
And if you think those monthly “maintenance fees” show owners any kind of return, you are kidding yourself.
Today when a legitimate owner buys into a condo building, what they are actually doing is buying their “home” (usually a deficient one at that) in a “rental building“.
I’ve blogged before about “pride in ownership” but if you haven’t read them, the simple logic is that “pride of ownership” comes only from “ownership”.
No “ownership” . . . “no pride“!
One need only look at the disgusting way amenities are treated in condos (many condos in Condoland are 80% and/or better renters) with renters not even bothering to bath before using the pool for example.
From the very outset of it all, the consumer is set up to being limited to accepting “whatever is given to them in return for their money and whenever it is convenient for the the developer to give it to them“.
The Condo Act is a bad joke and does not protect the consumer nearly as much as it does developers and property managers (have you read about all of the fraud with condo property managers lately).
And the Tarion Warranty is simply another bad joke being perpetrated on the unsuspecting consumer!
The Building Code is outdated and Municipal inspectors don’t even physically “inspect” developer’s work.
Developers host magnificently written (by their high priced advertising agency) web sites that are all lies (I’m about to publish my latest experience with a developer building my home) and there is no government agency to step in and regulate them.
Developers are allowed to promote whatever they choose to say in their published promotional material and literally live up to none of it unless it is “specifically set out in the Agreement of Purchase and Sale” (a ridiculous one side contract that any honest lawyer would tell you that you should not be signing).
I’ll be publishing my latest pre-construction purchase Case Study to show you all everything that is wrong in Condoland as, despite my having repeated informed this incompetent developer on my intentions to publish my Case Study on the purchase of this million dollar plus home, his socially conditioned developer’s way of doing things just keep coming up and hitting him in the face.
And let’s not overlook the Realtors, many of whom just received their real estate license after just having gotten out of school or coming from another career, but who are immediately recognized by Developers as “Priority Brokers” invited to “Private Pre-Launch Sales Events” where “their clients can purchase suites at preferred prices with a preferred selection of suites“.
And for doing so the Realtors receive upwards of 5% on a product that the average in Condoland is a half million dollars! That’s $25,000 a pop for turning buyers/investors over at these phoney events where the developer is actually dumping their “Dog Suites” (the suites that they have difficulty getting rid of when the building exists).
The thing that I have found as most offensive is that these Realtors sign their buyers/investors up under a “Buyer Agency Agreement” that stipulates that the Realtor is under law “protecting the best interests of their client“.
So, absolutely everybody involved in Condoland makes money hand over foot and all that money comes from the Canadian consumer.
Prices have shot up almost 3 fold since 2000 and the quality had continued to diminish.
Remedying significan “material” deficiencies are limited to negotiating with the Developer thus are built into the “ownership experience” (or obligation).
The budgets are so outrageously rigged that property management companies get paid a quarter million dollars a year for a job that could easily be fulfilled with one full time employee at a $50,000 income level.
So, you buy into your dream “home” that is located in a condo building that is dominated with renters while paying huge monthly maintenance fees, enjoying constant waits for elevators (usually 1 out of 3 broke down) that stop repeatedly all the way up and/or down full of people.
Welcome to Condoland’s nightmare!
And remember that “executive concierge” that the glossy ads all marvelled at? Well, that ends up a security guard.
As someone that has lived in Condoland all my career I can tell you that of the hundreds that you see lining the city’s skyline have all come since I entered the business I am saddened to say that “I am disgusted with Condoland“.
And I’m disgusted that no-one else seems to care!