CM Magazine Cover
From the Spring 2019 Issue

What Goes Up

Should Come Down

Feature || Pamela Smuts

As a property manager, it is never an easy conversation to have with a Board of Directors and owners that the elevator they all depend on needs to be replaced. I am going to walk you through my own elevator project including preliminary steps through working with a team of experts to oversee the project from start to finish.

WSCC 7 (Chateau Champlain) is a 29-unit condominium in Cambridge. This building exemplifies community and social interaction; the owners are extremely proud of their home and it shows.

The board of directors is a hands-on board who have worked diligently to have a well-maintained condominium and strive to have the best interest of the residents in mind. Board members have not only completed their mandatory director training but have also participated in the Level 200 Enhanced Director Training, Bill 106 Boot Camp and participated at the conference and trade show offered by CCI Grand River Chapter.

The original elevator is now over 35 years old and has surpassed its engineered life expectancy. Despite the odd service call here and there, it chugged along and provided residents with the service they expected.

Then the inevitable happened – the dreaded emergency call for a resident stuck in the elevator. The elevator company was called in and was able to make a repair. Unfortunately, the repair did not last and calls became more frequent, parts had to be ordered and the elevator maintenance company advised us that the original installers, Northern Elevator, no longer exist. To make matters worse the motor model is a Zhiel-Abbeg (which is a unique design and the manufacturer stopped supporting this material about six months after the last elevator of this type was installed over 25 years ago!) There are no replacement parts and due to the design, repair is often not possible.

While technicians did manage to get a part, the building was left with no elevator for over a week. As the only elevator, and with an aging population in the building, residents of WSCC 7 found this extremely difficult.

The company recommended that the elevator be replaced and provided a quote to the board and management. Management advised the board that a project of this magnitude should be carefully reviewed and multiple quotes requested. It was agreed to hire an elevator consultant to review the elevator and quote on overseeing the elevator replacement project.

How to proceed?

The Elevator Assessment was completed and a detailed report provided to the manager, along with a rough cost for modernization as well as a timeline for the elevator replacement once approved. With this information in hand, the board had a difficult decision – it was apparent the elevator needed to be replaced, but where would the money come from?

At roughly $160,000 plus engineering costs, a building of only 28 units did not have this money available (especially since they just completed a planned roofing project that year) the dreaded “Special Assessment” discussion began at the board meeting and I mentioned another option that the board had not considered – they could borrow the funds.

I had just completed a borrowing bylaw for another condominium and let the board know I could make arrangements to provide them what I refer to as my “dream team of experts” who could assist with everything they would need to arrange to finance if the owners agreed.

To arrange a loan there are certain considerations and not many boards or even managers know this option is available.

We often talk about the special skill sets that RCMs and licensed condominium managers possess. This includes a broad knowledge base that combines their education together with on-the-job experience. Here is one example of how experience at one corporation was seamlessly transferred to meet the specific needs of another.

Enter the “Dream Team”

I began by contacting the elevator consultant to oversee the project and gather information on how long the process would take from start to finish. They advised that the elevator would be out of service for roughly 7–8 weeks.

Next, I asked how long the process will take from Phase 1 to Final Phase – they advised that the specifications will be ready in two weeks for review, a tender period of three weeks and delivery of material is approximately 16 weeks from the award and then a completion of 8 weeks once the material is delivered.

To arrange proposed financing, we provided the following information to the financial advisor:

  • A copy of our latest Reserve Fund Study
  • Most recent financial package, budget and last two years audited financial statements.
  • Copy of recent Status Certificate
  • Details of the work to be completed and an estimated cost
  • Copy of declaration and bylaws

The corporation’s engineer was contacted to request an update to the Reserve Fund Study moving the elevator to be completed in 2019 as it was scheduled for 2021 in the study (the corporation was not that far out in their planning)

Last on the dream team list was the corporation’s lawyer to arrange for a Borrowing Bylaw and to get the process started.

The next step was to call a Town Hall (Information) meeting for the owners to ask any questions. There are often misconceptions about what borrowing funds mean for the condominium and for unit owners, and an information meeting helps address those misconceptions. It is helpful to have the condominium’s lawyer at the meeting to address legal questions, as well as someone from the financial organization to answer questions about the financial aspects. We also invited the engineer who completed the Reserve Fund Study update and the elevator consultant.

The Meeting of Owners was called to vote on the borrowing bylaw. To pass a Borrowing Bylaw a majority of unit owners vote on the bylaw and it requires 50% +1 to vote in favour for it to pass. It is highly recommended to obtain as many proxies in advance as possible – even if a corporation thinks it will pass it is important to have proxies in hand to ensure it is passed to move forward.

After the Borrowing Bylaw comes into effect, the board works with the financing organization and the condominium’s lawyer to finalize the financing documents to access the funds to complete the elevator replacement.

As you can imagine the most important part of a project of this magnitude is communication and organization. Owners need to be made aware of the time that the elevator will not be available so they can make other arrangements. This is important especially for residents who may be unable to use the stairs.

A project like this requires a property manager working closely with the board of directors to keep the residents’ minds at ease and not cause panic.

I appreciated working with all the experts and the board of directors, as well as the patience of the residents of Chateau Champlain during this project and we are excited to see the new elevator once it is completed!

Pamela Smuts is a condominium property manager at Weigel Property Management in Kitchener. She has been actively involved in the condominium industry for over 25 years, with experience as an owner, board director, property manager and in the condominium trades industry. She is actively involved in the condominium industry on the CCI Grand River Chapter’s Board of Directors, CCI National Council and the Chair of CCI National’s Community Committee. Weigelmanagement.com

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