Q&A—Inflation in Condos
tend to leave some financial padding in their budgets did not see as much of an increase. AH - Because these expenditures are happening "now" the condo fees are being increased in the next budget to compensate for the losses that weren't predictable, combine that with horrible insurance premiums, the fees are leaping in huge increments. SE - Absolutely. Take for example a condo who are set to complete deck and fence replacements in 2022, but are using the study plan from 2019. The construction costs are two, three and even four fold what the study plan indicated so the Boards need to pivot and increase fees more than they ever planned to cover these costs.
We ’ re all experiencing a difference in costs, whether at the grocery store, the gas pump or in maintaining your property. In May, 2022 consumer inflation rose 7.7% year over year . This was the largest yearly increase since January, 1983 and up from a 6.8% gain in April, 2022. I ’ ve reached out to condominium managers at different management firms, who are members of CCI - London and Area Chapter, to pick their brains a bit about what they are experiencing in the way of maintenance costs. your Corporations ’ budgets are you seeing affected by the inflation rate changes? 1. What aspects of AE - Right now the increases we are seeing are insurance, maintenance and lawn care/snow removal. AH - The most categories I've found affected are: the common area budget lines generally due to supply/demand, contractors are hitting us with pricing indicative of increased costs of wood, etc. Natural gas is being affected by the good ole carbon tax, and rates that constantly fluctuate. SE - The ones I see the most are labour, lumber, window/doors and of course fuel. I know these are not so much normal inflation; rather, more hyper inflation because of world material shortage and local labour shortages/cost of living. If I would hazard a guess I would think all operating accounts could be over budget by 3 - 10% depending on contracts and needs of the community.
Jennifer Dickenson, RCM, OLCM, LCCI is a condominium manager with Dickenson Condo Management
and the President of the CCI- London and Area Chapter.
LS - Yes
3. Are your operational costs increasing due to inflation?
AE - I think in this climate we are seeing increases everywhere. AH - Yes - gas pricing to get to my site inspections and board meetings is the most affected. SE - Absolutely – it costs twice as much in fuel to go visit a property now. During the pandemic other costs increased not so much due to inflation but due to the need to work remotely. So home office equipment was purchased and cloud programs such as DocuSign, Zoom and SurveyMonkey were added to the managers ’ tool kit as well.
Séan Eglinton, OLCM, ACCI, LCCI is a condominium manager with Thorne Property Management Ltd. He has been a professional Member of CCI since 2008 and was elected to the Board of Directors in 2018.
LS – Yes
LS - Landscapers/snow removal contractors and all other contractors
4. Are any of your Boards pushing back at the increases? How are you working around it or explaining?
2. Are condo fees being affected by these increases?
Andrew Elliott, RCM, OLCM, ACCI , a condominium manager with M.F. Arnsby Property Management for 12 years. He joined the team with over 10 years of experience in the real estate field, working for the Government of Ontario and in the
AE - You see some Corporations being affected. Those corporations are usually the ones that run a very tight budget with little to no wiggle room. Corporations that
AE - I explain my budgets to my Boards and Owners with as much information as
CCI Review 2022/2023 — 1
August 2022 - 36
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