Considering Condos with Post Tension Cables? Here's What You Need to Know
If you're in the market for a condo, you've probably come across some units in buildings with Post Tension Cables (PTCs). Perhaps you've heard some stories that have left you feeling uneasy about them, leaving you to wonder whether they're the right choice for you. But don't worry, I've got you covered! Let's take a closer look at the advantages and disadvantages of PTCs so that you can make an informed decision.
So, what exactly are PTCs?
Post-tension cable concrete is a construction method that is commonly used in condos, parking garages, office buildings, bridges, and more. It involves steel cables that are encased in concrete, stretching along the width of a structure and anchored at either end, adding strength to the slab. This construction method allows for longer spans and fewer supports, reducing construction costs and increasing design versatility.
But what are the risks associated with PTCs?
The primary concerns with PTCs are ongoing maintenance costs and the potential for corrosion and deterioration of the cables if exposed to water and oxygen. These issues can lead to expensive repairs, making some lenders cautious, and fewer mortgage insurers providing coverage. At present, Genworth Insurance does not provide coverage for buildings with post-tensioning, while Canada Guaranty may make an exception for buildings constructed in 2001 or later. However, for buildings constructed between 1970 and 1985, Canadian Mortgage Housing Corporation (CMHC) remains the sole mortgage insurer available.
Why are mortgage insurers so important?
In the event that your down payment is less than 20%, mortgage insurance will be required. However, since CMHC, the sole mortgage insurer available for buildings constructed between 1970 and 1985, does not provide coverage for PTC buildings, you will be unable to secure a mortgage without a full 20% down payment. This restriction can also affect potential buyers when it comes time to sell your property, as it eliminates anyone with a smaller down payment and can reduce the number of potential buyers.
So why would you consider a building with PTCs?
Older buildings with PTCs offer greater affordability, larger square footage, ideal locations, quality construction, and features like underground parking, adding value and increasing the quality of living. Plus, focusing only on buildings without PTCs won't protect you from all risks, as other systems could also fail, such as plumbing, HVAC, patios, envelope membranes, roofs, etc., resulting in equally expensive repairs.
If you're considering a building with PTCs, it's important to confirm your options and policies with your mortgage broker or bank. Additionally, during the condo document review phase, you'll have access to numerous documents that can aid in your decision-making process.
These documents include the Post-Tension Cable Report, which provides an engineer's feedback on the overall condition, potential concerns, and funding requirements for future repairs. You can also review audited financial statements, operating budgets, and reserve fund studies for further details on repairs, maintenance, and funding. Board and AGM Minutes are also available for related comments, and the Condo Document Review provides an objective summary of the financial health, bylaws, management, and more.
Keep in mind that defects and costly repairs can occur in buildings of any age, so it's essential to conduct thorough research, consult with experts, and have a clear understanding of your risk tolerance and capacity to make an informed decision.
