Condominium Information               

Purchasing a Condominium:

When you buy a condo, you purchase the interior space of an individual unit, but you share in the ownership of common areas such as exterior grounds, common walls, elevators, recreational and other facilities, and in the case of apartment style condos, hallways and foyers.

There are certain things to look for when buying a condo- quality of construction, amenities, parking, landscaping, schools, and of course location. Issues unique to buying a condo include no pet rules and rental restrictions.

Condo Fees:

Condo fees are the revenue the Condo Corporation uses to carry out its statutory obligation to control, manage and administer the common property. These fees are set in direct proportion to the cost of maintenance and the level of service demanded from elected officials. Condo fees generally cover expenses like snow removal, lawn maintenance, elevator maintenance and parking lot repairs. A portion will be allocated for the Reserve Fund. This is for long term repair and replacement for things like fences, roofs, siding or parking lots. Condo fees vary with the condo complex. Lower fees are not necessarily better. Typically townhouse owners have lower condo fees than apartment condo owners because townhouses usually have their own furnaces, while apartments have central heat. High-rise condos have surprisingly high costs in electricity and maintenance for elevators. Recreation facilities can be expensive to operate.

New developments, of course, have all new components, and thus may face few capital costs for several years. Be careful when purchasing a condo directly from the builder. Condo fees typically will be increased once the corporation takes over.

You usually get what you pay for. If you buy a condo with little fees, it may see little in the way of services. Don’t be afraid of condo fees. They may mean you’re looking at a well-run development, not afraid to charge what it costs to do the job right. Buyers are encouraged to take an active interest and role in the Condo Corporation.

Condo Terms:

Estoppel Certificate: The estoppel certificate discloses whether the owner has paid all condo fees due. It also gives a picture of the condo corporation’s affairs. These documents include a financial statement, budget, reserve fund statement, any recreational agreements or management agreements.

Insurance:

It is essential that every unit owner in a condominium have personal insurance coverage in addition to the policy held by the condo corporation. Check with your insurance company or talk directly with the insurance company that insures the complex.

Questions to ask:

· What is the ratio of owner-occupants versus renters?

· Is the complex professionally managed?

· What are the monthly or annual condo fees? Are they reasonable? Are any increases to the fees expected or are any special assessments planned?

· What is the financial situation of the condo association? Are the reserves adequate?

For a small fee, there are companies that examine the operations of the condo corporation to identify any high-risk areas. This service is similar to that of a home inspection, instead of inspecting and reporting on the physical property, they report and inspect the condo documents, (financial information, condo plan, condo by-laws, structural and mechanical reports, minutes, etc) in other words, summarize the important details and present them in plain language. This gives owners and buyers the short version of what the documents disclose from an arms length, no-biased perspective. You are provided with a written report summarizing this information.