CHF BC Long-Term Planning Services


Even with a long-term plan in place, a co-op's work is not done. Implementing the plan (including setting annual budgets and organizing capital works), ensuring proper maintenance practices and keeping good records are all important to viability and success.

Professional Management Companies

Professional management is key to getting the most out of an asset management plan and ensuring the co-op is doing all it needs to do to meet the requirements of warranties and the recommendations of the plan. COHO Management Services Society is the management arm of CHF BC and has been operating since the early 1980s.

CHF BC also counts five management companies among its members. They are:

Management companies can help co-ops with their regular day-to-day services, but also for less frequent tasks such as unit inspections. Management companies can assist with tracking maintenance activities and capital works: good record-keeping practices enable asset management plans to be regularly adjusted with the best possible information.

Ongoing management and maintenance

We don't always think of on-going maintenance as part of asset management planning, but it's critical. Regular maintenance helps building components last as long as possible and their replacement as inexpensive as possible. Everyone at the co-op has a role to play in ensuring proper maintenance, whether the co-op uses a management company or not. Each member at the co-op should understand how the building systems work (especially ventilation systems) and report problems as soon as possible to avoid delays in repair.

The building envelope really defines a building. It's what keeps the weather out, and it's always experiencing wear whether from rain, wind, sun, plant growth or animal activities. It's important to regularly observe the condition of the envelope and not defer maintenance and repair schedules. Water penetration in wood structures can quickly lead to decay, and metals can rust.

In this image, paint coatings and sealants on exterior trim are severely degraded. This allows water to penetrate, potentially causing extensive damage to wall assemblies. These conditions are a result of deferred renewal of paint coatings and sealants.

To keep the envelope functioning properly, paint and sealants must be renewed at regularly scheduled intervals.

Good landscaping can enormously improve the appearance of a co-op, but plants must not be allowed to grow without restriction. Here we see overgrown vegetation. Plants are encroaching on the building walls and speeding up the decay of wood components. Regular pruning would allow air to better reach the wall surfaces, and permit them to dry out more quickly.

We can see another example of the consequences of allowing plants and soil too close to building walls. Here the wood trim is severely decayed.

Damp soil in contact with the wall surfaces and vegetation limiting air flow have worked together to reduce the useful life of the wood trim.

This picture shows part of a decayed deck: a damaged vinyl membrane has not be replaced. Without that membrane, which is what provides the waterproofing, damp conditions can quickly cause rot and threaten the integrity (not just the appearance) of the deck. Repairs at this point would probably require replacement of some structural framing sections. This additional work (and associated costs) might have been avoided with an active maintenance program.

Clogged gutters are common, especially when large trees overhang co-op roofs.

Here we can see gutters clogged with fallen leaves. Sometimes this condition progresses so far that new plants begin sprouting in the gutters. In such situations, water may back up and may cause damage to roof sheathing, fascias and soffit areas. Regular gutter cleaning can help minimize this problem.

Poor interior ventilation can be attributed to problems with construction, or to member behaviours. In this picture, we can see that the bathroom ceiling and wall surfaces are damaged from poor interior ventilation. The bathroom fan is actually new, but it is not being used for long enough periods to effectively expel moisture after members take showers. Co-ops should review with members how the bathroom fans work and why members should use them.

Members can also affect the efficiency of the building systems.

Here a bathroom ceiling fan grille is clogged with dust. By blocking air flow, the fan's efficiency is much reduced and it can't properly vent moisture from bathroom areas.

Members may see the consequence of reduced fan efficiency when mould and mildew start to grow.

In this picture, you can see mould on bathtub wall tiles and grouted joints, a result of poor interior ventilation practices. (Members might also be encouraged to use bathroom squeegees to reduce the amount of water left on bathroom walls.)

Major Projects

Oversight of actual construction is a project management activity (Phase H). While not currently included in the CHF BC services, professional project management is critical, and to find a willing lender the co-op will need to use a project manager to oversee major work.

Although Phase I, "ongoing management and maintenance", is not part of the CHF BC package of services either, it is very much connected to those services. Ongoing professional management will ensure the co-op meets its obligations to maintain warranties on the work and assist the co-op in following the operational and maintenance recommendations that are part of the AMP (and which are designed to optimize life cycle costs). CHF BC's membership includes a number of management companies and co-ops currently without management support can consider the services they offer.


Co-ops with operating agreements may need to obtain approvals from outside the co-op. A co-op with a federal operating agreement may need to seek approval for very short-term capital plans (three-year plans) from The Agency for Co-operative Housing. Co-ops intending to borrow money will need approval from Canada Mortgage and Housing Corporation (CMHC) and The Agency. This process will involve the co-op obtaining an appraisal from a professional appraiser, and the submission of a package of other documents which the Program can assist with.


Borrowing Money

A co-op's asset management plan will include a long-term financial plan. Some co-ops may have sufficient reserves to implement the plan without assistance, but in many cases the plans will call for new borrowing. That borrowing will allow the co-op to achieve its goals and obligations, whether to refinance existing debt, pay for necessary rehabilitation work, or make arrangements to extend leases or buy land.

Virtually all co-ops in BC were developed under government programs that included a financing component, whether with direct loans from Canada Mortgage and Housing Corporation or indirectly (through loans guaranteed by CMHC). With the end of co-op operating agreements, co-ops needing to borrow must find lenders in the private market and meet the same standards as other commercial borrowers. This represents a big change, and the Program will assist co-ops by facilitating access to a lender, Vancity, that understands co-ops and can offer preferred terms.

Working with Lenders

A variety of loan arrangements are possible: first mortgages, second mortgages, amortized lines of credit, and interest-only loans (for limited periods) may all be considered. The best instrument will depend on the particular circumstances a co-op is facing. Co-ops on leased land as well as those with freehold interests in their properties are eligible for loans. Vancity will generally consider amortization periods of up to 25 years.

Potential borrowers approaching a commercial lender need to provide adequate security for any loan, and demonstrate an ability to service any proposed debt.

In addition to meeting commercial standards on measures like loan-to-value limits and debt coverage ratios, borrowers must assemble a formal loan application package. This will include many documents, and preparing a coherent package (especially the long-term financial analysis) can be a challenge for co-ops acting without assistance.

Applications generally require (among other things):

  • Audited financial statements (3 years)
  • Copy of co-op operating agreement
  • Charges on title
  • Land title and lease agreement
  • Asset Management Plan (AMP)
  • Financial analysis
    (with 10-year cash flow projection)
  • Basis of and amount to be borrowed
  • Insurance policy
  • Rent rolls
  • Property appraisal or assessed valuation
  • Phase 1 Environmental assessment
  • Governance and management overview
  • Additional construction-related information
  • Quantity surveyor estimates
  • Proof of property tax payment
  • Capital replacement reserve aligned with CHF BC AMP
  • Covenants attached to loan
  • Commitment to proactive arrears management

It is worth noting that our Program partner, Vancity, offers preferential terms to co-ops participating in the Program, seeing the value of a long-term plan.

Obtaining Approval from Regulators

If your co-op has an operating agreement (with CMHC, for example), you will require external approval before you can complete a loan. This can take some time. Co-ops should anticipate needing at least three months between accepting an asset management plan and proceeding with borrowing.

Internally, the co-op membership must also approve borrowing plans through a borrowing resolution. Your co-op may already have such a resolution in place that would allow the co-op to borrow what it needs. More commonly a co-op looking to refinance will seek affirmation of an existing resolution or adopt a new resolution. These resolutions are special resolutions, and there are specific legislative requirements surrounding notice and voting. CHF BC recommends a co-op consult with its lawyer on the drafting of a resolution.