PRIDE
OF OWNERSHIP LOST ON CONDOS
Charles Hanes
March 31, 2009
For those of you that have owned a home, and I’m talking about a detached home here,
you may recall that feeling of exuberance and self accomplishment when you purchased that
home.
Unfortunately, in Toronto, the luxury of owning a detached house has become a very costly
exercise! I frequently search Listings of detached homes in downtown and am always shocked
to see what you get for three quarters of a million dollars!
Your choices are pretty much limited to condos in Toronto and unfortunately, you have got
to be ready to give up that feeling of pride and exuberance when it comes to condos.
Here’s why! The concept of condo living originally meant a unique lifestyle choice
that offered amenities and services that detached house living simply didn’t offer.
Oh, you want a swimming pool, exercise room, security, etc.! That’s what condos
originally were designed to offer and in the good old days back in the early 1980’s
that’s what condos actually did offer.
Unfortunately, over the past three decades that I’ve been in this business I’ve
seen this home choice deteriorate to an investment choice with condos becoming ore of a
commodity that a home style choice.
With investors come renters and most condo buildings today are little more than apartment
buildings of old, with the only real difference represented by the style of ownership. In
the old days an apartment building was owned by an individual or group that rented out the
units. Back then there was at least uniformity of concept and the owners had an obligation
to continually invest in the building to make sure that tenants were attracted and happy
when they signed up so they would stay around.
Today, each unit is owned by an individual and most of these individuals are small,
unsophisticated investors who are ready to rent out their unit to anybody willing to sign
a twelve month lease and give post dated cheques.
Frequently things come up that are needed to enhance the building but to achieve these
goals, the owners must vote and all these unsophisticated investors will vote for is to
not spend any money (needed or not).
So when you, the owner resident buy into one of these buildings you end up living amongst
renters who have no ownership interest in the unit or the building and who really
don’t care about the cleanliness or upkeep of the halls, facilities and/or grounds.
Just observe the dog walkers in your condo building using the gardens as their doggy
bathroom with their pets walking around the flower beds on their leases that are tearing
apart the landscaping and you’ll know that they are renters. Would an owner, you know
the guy that has to pay to replace or re-landscape the flower beds (whether out of the
reserve fund or through a “Special Assessment”) have his/her dog tear it up like
that.
Now check out the recreation facilities in your building and see the abuse handed out onto
the equipment and supplies and ask yourself the same question “would someone who owns
that stuff abuse it like that”. College Park, for example is
a brand new building and even before it was registered you could see evidence of people
“keying the elevators”! Would an owner do that? Of course not!
Now realize that most developers are selling most of their units to small individual
investors. Aura at College Park,
for example, offered a special incentive to buyers of their presale building that told
them that “providing you don’t ask for concessions regarding putting 25%
down” they (“Canderel |
|
|
Stoneridge”,
the developer “would not require bank approval”. That meant that, providing any
investor made their 5 installments of 5% (and didn’t ask to put 15% down, for
example), the developer would disregard the clause in the contract that required the
purchaser to prove their financial capacity to close the transaction. You’ve got to
ask yours “would a genuine end user buyer care that they had to prove their financial
capability to buy the suite”? Of course not!
A genuine end user buyer would prefer that all buyers bank qualified to insure the
financial stability of the building (especially in these times of the sub prime mess in
America).
So what happens when the genuine end user buyer buys into these high density, incentive
laden developments? You end up owning your dream home in a rental building! Oh, the
developer didn’t disclose this to you! Duh, why would they? They are fixated on
wringing every possible sale out their non-existent building.
The two towers that comprise College Park by Canderel are in the majority small one
bedroom, one bedroom plus den and two bedroom one bathroom suites. The President and
Chairman of Canderel expose their lack of true comprehension of condos in general by
owning large, multimillion dollar suites in one of the towers. If they really had a solid
awareness of condos and/or condo life they would have realized that no-one wants to pay
$3,000,000.00 to live in a rental building of small units (especially small rented units
with only 8 foot stippled ceiling heights) – Duh!
So, what’s the magic solution to this kind of chaos? Get yourself a Buyer’s
Agent that knows who built what buildings in the city and one that has a hands-on
awareness of the suite mix in every building in the city. This is not something that is
taught in real estate school but rather an education that only years of hands-on
experience in the field brings.
That’s what I’m here for. I don’t profess to be a rocket scientist.
I’m just a guy that was fortunate enough to spend the last three decades on my life
in the condo business here in Toronto. I don’t get a lot of Christmas cards from
developers as I preach the truth here at simplycondos.com and that truth frequently
offends them.
simplycondos.com is the ONLY place that you can find totally objective information
although, these days I’ve pulled back from publishing a lot of my knowledge as I was
only informing my would be competitors to enable them to sound like they know what they
are doing.
The condo industry in Toronto is a mine field within a terrain that represents the largest
single investment that most of you will ever make. As my “Client” you gain the
benefit of my three decades in the business and you can believe me that I work ONLY for
your best interests by sharing ALL the dirt with you about all the developers and
nightmare buildings in the city.
So, if you are considering buying a condo, loft or townhouse in Toronto believe me the
best first step for you to take is to Register with me before you make any other move
(especially before visiting any presale sales sites). Your Realtor should not be a cab
driver who drives you around and shows you everything and anything that is out there. If a
Realtor can’t tell you the background on any or all the buildings and/or developers
out there then they really are limited to being your personal cabbie and mistakes in this
business are soooo costly that you’d be further ahead simply taking a cab.
What you need is hands-on knowledge and experience and as I’ve said (above)
that’s what you get with me. So, once again, if you are contemplating buying a condo,
loft or townhouse in Toronto or any of the surrounding areas Register with me.
Be sure to tune in here frequently as my upcoming articles will expose some of the most
egregious conduct imaginable by Toronto developers. I won’t be publishing their names
(unless their conduct demands it) as I end up spending all my time dealing with their
unethical litigators who attack me with false claims of “Defamation” and I end
up wasting far too much of my time fending off their frivolous law suits.
Talk again soon. Until then, I’m Charles Hanes bidding you well. |
