With more and more Toronto condo towers reaching over 40 storeys, condo boards need to understand the challenges high-rises present for reserve fund planning. The taller the building, the more challenging upkeep becomes, especially when considering exterior renovations. Here we look at the reserve fund planning challenges for high-rises and the costs of “working at height.”

Understanding “Reasonable” Budgets

Setting reasonable budgets for high-rise condos requires special considerations. For example, the dangers of raising glass panes over 30 storeys present increased risks, elevating insurance costs. Also, buildings towering upwards of 60 storeys often have special features to make building upkeep easier, such as crane assembly installations on the roof. This equipment adds to maintenance costs.

Although the cranes make window cleaning more accessible, the logistics behind the crane’s maintenance pose a severe threat to reserve funds. Cranes have hydraulic cylinders that will eventually require replacement costing $60,000 per cylinder at today’s prices. However, a derrick crane is needed to replace the cylinders. At $250,000, the crane costs four times as much to build than the replacement cylinder itself.

A recladding and restoration project for the 72-storey First Canadian Place building cost over $100 million. The project included the installation of the iconic brass curtain wall, replacing the expensive marble elements with a more cost-effective material, and upgrading electrical and mechanical work. While this is a commercial tower, the costs for a residential project don’t vary much.

Budgeting for such replacements is nearly impossible as there is no telling what equipment and materials will be used 20 or 30 years from now. As a result, reserve funds for high-rise condos face underfunding. While today’s owners are reasonably protected against astronomical project costs, future owners will be left holding the bag for unmanageable special assessments.

CIA Study on Underfunded Reserve Funds

According to the Canadian Institute of Actuaries (CIA), there is a widespread shortage in funding for normal high-rises less than 50 storeys tall in Canada. They estimate that 10% of condos will require a special assessment to cover the average repairs and replacements required at the three-year mark. This percentage skyrockets to 47% at the 20-year mark and 54% at 30 years.

Everything Takes Longer

The taller the building, the longer everything takes. That additional time increases labour costs related to simple steps such as workers reaching their destinations and getting materials up to the highest floors. A larger surface area, more windows, more balconies, etc., all add to the time required to complete the project.

Working at Height is Harder

“Working at height” presents endless challenges, making longer project times the least of your worries. For example, window replacements with large window combinations in hand with the exterior finishes required during installation present access issues. Specialty equipment to complete the project includes swing stages/climbers and cranes to lift large windows spanning a condo unit or even an entire floor.

Weather Challenges

Weather is always challenging for exterior work regardless of building height. However, with high-rise condos, weather such as heavy wind is too dangerous, putting a stop to work. As a result, your high-rise presents a higher risk for weather delays. These delays must be factored into your budget and included in your restoration contracts with defined delay clauses.

Understanding the costs of working at height, and the special considerations required for high-rise condo restorations can help improve your reserve fund management and planning. Working with a property management company experienced in effective budget planning can help avoid underfunded reserve funds for high-rises.

The condo experts at CPO Management Inc, a property management company in Toronto and the GTA, can assist your condominium in effective management to maximize your reserve fund and budget planning. Contact us today.