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Friday, October 3, 2008

The Financial Crisis and You


From The Hoss's Mouth


Hoss's Money Magazine answers the question: How does the financial crisis affect me?
Well, if you have a good credit rating, no mortgage and a steady job, probably not very much other than a reduction in the value of your retirement and/or investment plans.

On the other hand, if you are like the majority of the people, and from time to time require a loan to finance a new car, mortgage or home repairs/alterations you may not be able to obtain a loan, even with a good credit rating. Bank's can no longer lend money without using stringent guidelines that clearly indicate the borrower(s) will not default on the loan.

The Hoss and Mrs. Hoss live in a Bare Land Strata Complex with by-laws that provide for the control, management, maintenance, use and enjoyment of the strata lots, common property and common assets of the strata corporation and for the administration of the strata corporation.

What has that got to do with the financial crisis? The Hoss will explain. Our Strata has a by-law that requires roof replacements be done with cedar shakes or a very specific type of rubber roof. Nothing else is permitted, period. These types of roofs are considerably more expensive to install than either asphalt or fibreglass composite shingles, as much as $5,000 more.

Many owners may have to obtain a loan to have his/her roof replaced. Unfortunately, because of the high cost, they may not be able to obtain the necessary loan.

So what was the response of some Strata Council members when a proposal was brought forward to permit a verity of roofing materials as long as a uniform color was maintained? "I do not want my view spoiled. I bought in here because it is a 'high end complex'. If they cannot afford a cedar roof, tell them to move." Fortunately, there are some forwarding-thinking people on Council, and it now appears they will attempt to progress this matter and find an acceptable roofing alternative that is a reasonable cost.

As it stands now, an owner without the financial means to replace their roof with cedar will have to move, or ignore the by-law and risk being taken to court by Council to have the roof removed.

The Hoss struggled with the thought of using a real life situation to illustrate what effect the current financial crisis has on the average person--or if you prefer, the middle class--but in the end, decided this type of example would be of the most value to his readers.

Stay on track,

The Hoss

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