Purchasing a Condominium

Condominiums are units in a building that many times look exactly like an
apartment, however, they are sold individually as if they were a house. Although
you will own the living space, the rest of the amenities such as a pool, lounge,
laundry room, etc., are owned and used by everyone living in the condominium
building.
Many people find the idea of owning a condominium attractive because they get
to have ownership, yet they don’t have to worry about thing like maintenance of
the grounds. They are usually popular in areas where houses tend to be
expensive, or for singles or couples who don’t need the space in a full house.
However, owning a condominium is quite different from owning a house in
several ways. Therefore, there are several things to consider before purchasing a
condominium. Here are some tips to consider when you are thinking about
buying a condo:

1. Condos have homeowner’s associations --

When you buy a condominium, it’s rather like a business agreement between you
and all the other residents in the building. Condos have a homeowner’s
association which has certain rules, regulations and restrictions that all owner
must follow. This agreement is used to spell out things like building maintenance,
neighbor relations, pet ownership, quiet hours after 10 p.m., etc.
Some condos could have rules you consider strange or quirky, i.e. only allowing a
certain color of curtains, so it’s best to review them all in advance. Before
purchasing a condo, it’s vital to fully understand everything in this homeowner’s
association so you will know if you will be able to live under them and abide by
them without any problems.
2. Condos have special association fees
Condo association fees are based on the number of units, the cost to maintain the
entire property, if it is professionally managed or self-managed, repair fund for
major repairs, litigation funds, exterior maintenance like landscaping, mowing the
lawn mowing, snow plowing, insurance, water and sewer services, trash
collection, road maintenance, etc.
Some condos even charge you for things you don’t plan on using like tennis
courts, pool or a gym, so if you don’t need those, it could cost you more than you
are willing to pay out just to live there.
Therefore, you should get a full list of all the monthly dues you would be required
to pay and don’t forget; condo association fees aren’t tax deductible like a
mortgage can be. For instance, it’s required for a condo association to use a
portion of its dues to pay for possible large scale repairs like fixing a roof, etc. If
the building is less than 10 years old, that fund should be around 10 percent of
whatever that predicted cost would be, but if your building is older than that, it
should have a larger percentage of money dedicated to that fund.
Plus, ask things like what is the percentage of delinquency of tenants in paying
their monthly association dues? If it’s a good condo community, their
delinquency rate should be 15 percent or less. If it’s high it could mean you’d be
stuck with more of the bill if something like the repair fund comes up short.

3. Condominium insurance is different than homeowner insurance.

Condominium insurance is not the same as when someone buys homeowner’s
insurance for a house. There will normally be some type of master insurance
policy put in place by the condominium association will have a master insurance
policy in place, but this could differ depending on the building policy. Be sure to
find out if it covers your personal possessions too. Whatever there is, you should
read it carefully prior to deciding to purchase a unit in the building so you will
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
It’s also vital to know the demographics of the condo residents. Likely you’d
rather live amongst neighbors that are similar to you in age or lifestyle. For
instance, if you are a 20 something year old single guy who likes to be able to
party with people your own age, then you may not want to buy a condo in a
building where a large portion of the residents are senior citizens.’

5. What are the current residents’ biggest complaints?

It’s also a good idea to know what things residents are complaining about the
most. Ask for the minutes to the last few association board meetings or talk to a
few current residents. It would be prudent to find out ahead of buying one of the
units things like whether management is slow to do repairs, or if the noise
restrictions or other rules aren’t always enforced fairly.

6. Get the lowdown on the condo’s management team

Another vital thing to know in advance is how the management team does
business and if they are easy to deal with. You surely wouldn’t want to live
somewhere that the management team is not friendly or doesn’t reply to
problems or requests in a timely fashion. Find out if the place is self-managed or if
there are property managers.

If there aren’t any property managers if means owners make these kinds of
decisions together. That could mean lower monthly dues, but depending on the
views of your neighbors, it also could bring its own kind of problems that may not
happen if there are dedicated property managers. Likely you would want to have
to live next door to a neighbor whose vote went against you in some sort of
disagreement, so that could be a con in a self-management situation.
7. Find out the condo’s reputation
Yes even a building can have a good or bad reputation. You should ask the realtor
how desirable the units in your building are. Ask things like how long it takes for a
unit to sell, and if the unit seems underpriced, be sure to find out what the reason
is prior to buying it. What’s doing on in that neighborhood? Is there going to be
any new construction or demolition? What businesses are there or could be
leaving? All that can play a large part in the livability of the place. You don’t want
to find out something is majorly wrong after you signed on the dotted line.

8. Find out the parking situation

It’s vital to know that you have a dedicated space to park your vehicles. Plus if you
are authorized one space or more than one? It’s best to find one where you are
deeded a spot or two than one with first come, first serve style of parking spaces.

___________________________________________________________________________

Claudia Davis,
Condominium Specialist
Condos For Sale
Toronto, Ontario
Full Service Realtor,
SKYLIFE Real Estate Inc
Agent at SKYHUB Canada
905-999-7774 ext. 4022