Condominiums are a great alternative to home ownership. If you're looking to buy your first home, or want to downsize, chances you are considering buying a condominium. There are a few things that you should know first before signing on the dotted line.
It's often said that buying a condominium is buying a lifestyle. What does that mean?
Condominium living is different from owning or renting a detached house because condominiums have a dual nature. Condominium owners hold title to their units and share responsibility for the operating costs of the balance of the property (common elements such as lobbies) that makes up the condominium (or Strata Property as known in BC).
There are many advantages to condominium ownership. It may be less expensive than other types of home ownership. It can provide an "instant" sense of community. While someone else is shovelling the snow, you could be enjoying a swim in the shared warm water swimming pool.
However, condominiums are not everyone's cup of tea. Condominium corporations (or Strata Corporation) may set restrictions on things such as owning pets or having an outdoor barbeque.
How is the condominium managed?
A Board of Directors (or Strata Councils), elected by the owners, manages the condominium association (or Strata corporation). Major decisions are voted on at owners' general meetings. Participation in community decision-making is a benefit of condominium living.
Conditions and Restrictions
Condominiums are governed by a set of rules called Covenants, which are enforced by the condominium association. Condominium Conditions and Restrictions (CC&Rs) vary from one development to another. The CC&Rs may impose restrictions on noise levels, renovation projects, pet ownership and renting.
As a potential condominium owner, you should be comfortable living within the rules and restrictions of the condominium association and living in close proximity to others.
Condo Fees (or Strata Fees)
The condo or owners association budgets and determines the fees for all units, usually based on the size of each unit, the number of units occupied and the projected expenses for maintenance and repair.
Every condo owner pays fees to help maintain the building, pay the salaries of concierges, handymen or groundskeepers, and provide facilities such as a pool, gym or gardens. The fees are paid monthly and are subject to change.
Special assessments could be made when an unexpected repair or planned modification exceeds the cost of the condo fees collected.
Questions to ask!
It's absolutely critical that you read and understand the documents given to you when you are purchasing a condo. The association is required to give you all documents affecting the use of your property. These documents will tell you absolutely everything you need to know, what you can do and what you cannot do. If you don't have a clear understanding of the information provided in the documents, ask for clarification so that you know what you are getting into.
Request copies of minutes from the past two years from the Board of Directors' meetings. If there are any major problems with the condominium association, this is where you'll find it. The association is required to have regular meetings and make the minutes available. Be absolutely sure to do this so that you are aware of any major problems with the bureaucracy of the condominium association that would make living in the condo undesirable.
Ask owners for comments or complaints about the association's (or council's) activities and reputation. Find out if there any plans to add to the facilities, such as a swimming pool or gym? Such projects can mean a rise in fees. The minutes of the condo association meetings should reveal any such plans.
Be aware of the marketing hype
If you are thinking of buying a pre-construction condominium unit, be aware of the marketing hype, and bear in mind you are buying a "Fish in the Water". You may be surprised to learn that the beautiful rooms you saw in the model suites are not necessarily like the ones you'll live in once your building is complete.
The den on your floor plans may become a walk-in closet by the time you move in. And the fantastic view you see in the building model, may soon get distracted by the following phases of the project. Your dream condo may turn out to be "Dog Suite" and you may not get what you paid for. Click here to watch a recent CBC report on new Condos Market
On the other hand, if you get a "Prime Suite", you could make a few thousand dollars in profit by the time you receive your condo keys.
Your real estate agent can help you avoid the pre-construction sale pitfalls and help you make the right decision.
P.S In the province of British Columbia, Condominiums are called Strata Property and are governed by the Strata Property Act of BC, they are managed by Strata Corporation which is elected by Strata Council.
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