Condos are an awesome option for first time home buyers and downsizers. For first time home buyers, it’s more affordable and you can start small. For those that want to live in the core of a City and be close to work and restaurants, shopping and the activity – this is also a good option – some don’t even own a car. For downsizers, they can travel without worry – no outside maintenance to look after.
Buying a condo vs a house has its pros and cons and when you do purchase a condo whether it’s an apartment or townhouse, there are questions you need answered before you decide. Ask your real estate representative to find out the answers before making an offer. Your real estate representative can contact the listing agent or the property management company of the complex and get the answers for you. If not, one of the conditions in your offer should be that a Status Certificate will be ordered and reviewed by your lawyer before removing that condition.
Questions #1: What are the monthly fees and what is covered?
Condo fees are used for building insurance, property management, maintenance of common areas, taxes, electricity for the building, sometimes water and sewer costs, sometimes heat and hydro for the unit, garbage disposal – each complex is different.
Questions #2: Is there a Special Assessment?
What is a Special Assessment – it’s an additional levy that owners must pay due to insuffient funds in the Reserve Fund of the Condo Corporation for major repairs and or upgrades. For example, CCC #123 needs new elevators or the parking needs to be repaired and it’s going to cost $250,000.00. However, the Reserve Fund only has enough money to cover $150,000.00 of the cost so a special assessment (levy) will be required and all the owners will need to pay either a lump sum amount or spread the amount over a few years.
Usually, on the listing there will be an indication that there is a special assessment and the amount, if not on the listing, this information will be provided the property management company when the Status Certificate is ordered.
Couple of things you would want to consider when purchasing a condo unit with a special assessment:
- What is the amount of the special assessment?
- What is it for?
- How much has been paid?
- Who will pay the balance of the assessment?
Questions #3: Is the Condominium Complex registered?
This is very important because until the complex has been registered as condominium corporation, you could be a tenant and pay a monthly rental until such time as it is registered.
Questions #4: If you purchase a Condo and need to move – can you rent it?
When you own a non-condo property you can basically do as you wish but when you own a condo unit, its important to find out if all the units must be owner occupied or a percentage can be rented. This is something that you will find out in the Status Certificate – a very important document.
Questions #5: What’s the Condo’s pet policy?
If you have a pet, you need to know whether the Condo’s policy permits pets and what kind and size. Some will only permit dogs under 25 lbs. You also need to know how many are permitted – you don’t want to find out after you move that it’s a non-pet condo complex.
Questions #6: What’s the Condo’s smoking policy?
In recent years, quite a few condo corporation have declared the complex a non-smoking complex. This includes no smoking in the units as well as in the common areas.
Questions #7: Is there designated parking or everyone parks where ever?
In the city, parking is in demand. Is the parking designated or owned – if owned that’s added value to the condo unit. Is there visitor parking available?
Never assume that every unit comes with a parking spot. Some were purchased originally without one. – I know not a great idea. If you require an additional parking spot ask whether you can rent an additional spot.
Questions #8: Is there any outstanding litigation?
Is someone suing someone over something? This will pop up in the Status Certificate – again an important document.
Questions #9: Is there any outstanding litigation
Condos like homes need maintenance and updates. To ensure that there are sufficient funds in the Reserve Fund, the Corporation hires an independent company (usually an engineer company) to do an audit of the property in question and prepare a report. Usually, every 3 years. The report usually contains a list of expected repairs for the next 5, 10, 15, etc. years. i.e. when does the roof need to be repaired/replaced; windows; elevators, etc. On this report, costs will also be shown.
A well-managed condo corporation with a healthy reserve fund will be able to cover most of these expenses but if they fall short, this is when A SPECIAL ASSESSMENT will need to be charged to each unit. There are condominium complexes that you need to avoid because they are always short.
Questions #10: Is a Status Certificate available before I make an offer?
Usually, a Status Certificate is ordered by the buyers’ lawyer. Some listing agents pre-order a Status Certificate and make it available to potential buyers. The cost of a Status Certificate is approximately $100.00 plus applicable taxes and it takes approximately 10 days to receive.
The Status Certificate is a large document that contains and includes the following:
- The Rules and Regulations
- The Covenants, Conditions and Restrictions
- A copy of the most recent Reserve Study.
- A financial statement.
This document will be reviewed by your lawyer and he/she will contact you to let you know if there are any concerns.The problem is that the certificate is usually only ordered by the seller once they have accepted an offer.
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Buying a condo requires an added layer of investigation and is a lot different than buying a house.
Call Irene Bilinski 613-858-1151 for your condo purchase where Real Estate Is All About You!