Be an Owner!

I am terribly sorry for not writing here for a very long time indeed, but there are so many things I am currently running and I don’t have enough time for writing decent posts 😦

However, a few days ago a couple thoughts and observations came to my mind and I’d like to share those with you.

At Amazon, a company I work for, we usually try promoting sense of ownership. You don’t ‘shoot and forget’, but you build and maintain, you develop what you initially came up with. And this is a positive thing even though some people like switching to something new.

When you think of ownership in a larger scale, you look at people who live close to you and who live in the city, you might not immediately notice how much do they own their life. However, deeper I dig, more ownership I find in Canadian folks, compared to ordinary people in Russia, a country where I have grown up.

Most people in Russia live in what Canadians call condominiums. The most important part understanding condominium is that it is not about the structure of a building, not about how many units it has. Condominium is basically a legal form of shared ownership. It can be a small place with two apartments, a low-rise 3-storey wooden house or it can be a high-rise apartment building. The core thing about condominium is it’s like a small corporation of people who own it.

Condominium is normally managed by some company which collects maintenance fees from condo owners. This company reports to owners in a form of meeting minutes where they refer to decisions they make (mostly related to how maintenance budget is spent and what type of maintenance is needed short and long term). Portion of maintenance fee always saved in contingency reserve fund (CRF). Any decisions related to how large these fees should be and whether to collect additional money on some large renewals or spend money from CRF are made on annual general meetings where each owner has a vote. There is no such notion of state funded condo repairs or third-party payer system where you don’t pay for repairs in your building, but someone else is on a hook to provide you with these repairs.

I am telling all this because in many ex-Soviet countries it is different. You pay some small fee to municipality and they put all these monies into a pot. Then they spend it on repairs they find to be necessary in buildings you have never lived in and hardly spend anything on repairs in the building you actually live 🙂 However, when all the pipes start to leak and stuff starts falling apart, municipality claims it has no money to fix all this and asks government to help them out. Normally this takes forever to find money and eventually things get somewhat ‘fixed’ once in 30 years. During good times amount of under-maintained buildings goes a little down, in crisis times buildings are only repainted every 10 years and some band-aid type of fixes are done when something starts to leak.

Because of this system in ex-Soviet countries, old buildings interiors might seriously deteriorate:

And because of owners are so much detached from maintaining the building, when you buy a real estate in Russia you look for new buildings first 🙂 In old buildings people usually look at only the apartment itself. A technical condition of a building they plan to live in is barely a subject of their interest, unless it clearly represents a risk to their live right now. In this sense it is not a condominium at all, this is some unfortunate multi-family semi-social housing.

The most striking thing is a difference in amount of money collected for maintenance here and in Russia (as an example). My experience shows here it is about 3 times more expensive. Average monthly fee here for 70 sq. meters unit would be more than $300 CAD. However in Canada you get more for your money as well.

People who live in the building, whether they want it or not, have to treat their unit as an asset. And this asset can go up or down in value based on many factors. For instance, if the building you live in gets older and doesn’t receive proper maintenance a buyer who you will try selling your unit will inspect all building documents and find out that maintenance is not adequate. Council meeting minutes, annual budget and other papers will reflect this and current size of the CRF will show that community of owners is not proactive. Which will mean that in future, there will be either maintenance fees hike or buyer might be assigned to fund a portion of a looming large repair.

The difference is striking. It is not uncommon to see condominium common areas as good-looking as this even in older buildings:

I might write more about real estate here in Canada, but it is not the point. The point is ownership. If you don’t really own a thing, you don’t care. If you treat what you work on or live in as an asset, you don’t ignore what is the right thing to do.

Be owners of your life. Ciao, until the next time 🙂

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4 Responses to Be an Owner!

  1. Vova Petrov says:

    Very interesting post, Alex!) Time is passing but nothing seems to change. No ownership – no efficiency, no matter what we are dealing with. We are paying even more in targeted overhaul fund now but the scheme is still the same. And it doesn’t work properly since people don’t belive in a prospect of having their own building repaired before their death. However, some people are ready to share these extra money in exchange for the right for community-based usage.Hope someday we will see something similar to what you have in Canada.)

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