Purchasing a Condominium
A Realtors take on important things to consider before buying a Condo.
A Realtors take on important things to consider before buying a Condo.
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<strong>Purchasing</strong> a <strong>Condominium</strong><br />
<strong>Condominium</strong>s are units in a building that many times look exactly like an<br />
apartment, however, they are sold individually as if they were a house. Although<br />
you will own the living space, the rest of the amenities such as a pool, lounge,<br />
laundry room, etc., are owned and used by everyone living in the condominium<br />
building.<br />
Many people find the idea of owning a condominium attractive because they get<br />
to have ownership, yet they don’t have to worry about thing like maintenance of<br />
the grounds. They are usually popular in areas where houses tend to be<br />
expensive, or for singles or couples who don’t need the space in a full house.<br />
However, owning a condominium is quite different from owning a house in<br />
several ways. Therefore, there are several things to consider before purchasing a<br />
condominium. Here are some tips to consider when you are thinking about<br />
buying a condo:<br />
1. Condos have homeowner’s associations --<br />
When you buy a condominium, it’s rather like a business agreement between you<br />
and all the other residents in the building. Condos have a homeowner’s<br />
association which has certain rules, regulations and restrictions that all owner<br />
must follow. This agreement is used to spell out things like building maintenance,<br />
neighbor relations, pet ownership, quiet hours after 10 p.m., etc.<br />
Some condos could have rules you consider strange or quirky, i.e. only allowing a<br />
certain color of curtains, so it’s best to review them all in advance. Before<br />
purchasing a condo, it’s vital to fully understand everything in this homeowner’s<br />
association so you will know if you will be able to live under them and abide by<br />
them without any problems.
2. Condos have special association fees<br />
Condo association fees are based on the number of units, the cost to maintain the<br />
entire property, if it is professionally managed or self-managed, repair fund for<br />
major repairs, litigation funds, exterior maintenance like landscaping, mowing the<br />
lawn mowing, snow plowing, insurance, water and sewer services, trash<br />
collection, road maintenance, etc.<br />
Some condos even charge you for things you don’t plan on using like tennis<br />
courts, pool or a gym, so if you don’t need those, it could cost you more than you<br />
are willing to pay out just to live there.<br />
Therefore, you should get a full list of all the monthly dues you would be required<br />
to pay and don’t forget; condo association fees aren’t tax deductible like a<br />
mortgage can be. For instance, it’s required for a condo association to use a<br />
portion of its dues to pay for possible large scale repairs like fixing a roof, etc. If<br />
the building is less than 10 years old, that fund should be around 10 percent of<br />
whatever that predicted cost would be, but if your building is older than that, it<br />
should have a larger percentage of money dedicated to that fund.<br />
Plus, ask things like what is the percentage of delinquency of tenants in paying<br />
their monthly association dues? If it’s a good condo community, their<br />
delinquency rate should be 15 percent or less. If it’s high it could mean you’d be<br />
stuck with more of the bill if something like the repair fund comes up short.<br />
3. <strong>Condominium</strong> insurance is different than homeowner insurance.<br />
<strong>Condominium</strong> insurance is not the same as when someone buys homeowner’s<br />
insurance for a house. There will normally be some type of master insurance<br />
policy put in place by the condominium association will have a master insurance<br />
policy in place, but this could differ depending on the building policy. Be sure to<br />
find out if it covers your personal possessions too. Whatever there is, you should<br />
read it carefully prior to deciding to purchase a unit in the building so you will<br />
know exactly what your costs would be in case of the need for any future repairs.
4. Know the demographics of the people living there<br />
It’s also vital to know the demographics of the condo residents. Likely you’d<br />
rather live amongst neighbors that are similar to you in age or lifestyle. For<br />
instance, if you are a 20 something year old single guy who likes to be able to<br />
party with people your own age, then you may not want to buy a condo in a<br />
building where a large portion of the residents are senior citizens.’<br />
5. What are the current residents’ biggest complaints?<br />
It’s also a good idea to know what things residents are complaining about the<br />
most. Ask for the minutes to the last few association board meetings or talk to a<br />
few current residents. It would be prudent to find out ahead of buying one of the<br />
units things like whether management is slow to do repairs, or if the noise<br />
restrictions or other rules aren’t always enforced fairly.<br />
6. Get the lowdown on the condo’s management team<br />
Another vital thing to know in advance is how the management team does<br />
business and if they are easy to deal with. You surely wouldn’t want to live<br />
somewhere that the management team is not friendly or doesn’t reply to<br />
problems or requests in a timely fashion. Find out if the place is self-managed or if<br />
there are property managers.<br />
If there aren’t any property managers if means owners make these kinds of<br />
decisions together. That could mean lower monthly dues, but depending on the<br />
views of your neighbors, it also could bring its own kind of problems that may not<br />
happen if there are dedicated property managers. Likely you would want to have<br />
to live next door to a neighbor whose vote went against you in some sort of<br />
disagreement, so that could be a con in a self-management situation.
7. Find out the condo’s reputation<br />
Yes even a building can have a good or bad reputation. You should ask the realtor<br />
how desirable the units in your building are. Ask things like how long it takes for a<br />
unit to sell, and if the unit seems underpriced, be sure to find out what the reason<br />
is prior to buying it. What’s doing on in that neighborhood? Is there going to be<br />
any new construction or demolition? What businesses are there or could be<br />
leaving? All that can play a large part in the livability of the place. You don’t want<br />
to find out something is majorly wrong after you signed on the dotted line.<br />
8. Find out the parking situation<br />
It’s vital to know that you have a dedicated space to park your vehicles. Plus if you<br />
are authorized one space or more than one? It’s best to find one where you are<br />
deeded a spot or two than one with first come, first serve style of parking spaces.<br />
___________________________________________________________________________<br />
Claudia Davis,<br />
<strong>Condominium</strong> Specialist<br />
Condos For Sale<br />
Toronto, Ontario<br />
Full Service Realtor,<br />
SKYLIFE Real Estate Inc<br />
Agent at SKYHUB Canada<br />
905-999-7774 ext. 4022