Whether you’ve decided to move from a rental property, are wanting to downsize, or are looking for the low maintenance lifestyle of condominium living, you’re going to want to do your homework before closing the deal on the purchase of a condominium.
As a buyer, it is advised that you get clarification on the following questions from your Realtor or the condominium’s property manager:
1) How much are the condominium fees and what do they cover?
This is a common question and the answer should be taken into great consideration when you are looking specifically at the condominium market. Be sure you have a good understanding as to what is covered and what your responsibility will be. Often, the breakdown of the condo fee can be vague. For example, it may list exterior maintenance but it is important that you confirm exactly what that means. You might be surprised as to what you are actually responsible for on the outside of your unit.
2) What does the Reserve Fund look like?
As of 2015, the Condominium Act enforced mandatory Reserve Fund studies to be conducted for each corporation. As someone who is about to invest their own hard-earned money into a home and the community it’s set in, it’s important to verify whether the corporation is in good financial shape. Otherwise, you might be blindsided by a cash call to fix a common element if the reserve fund isn’t properly padded.
3) What are the rules and regulations of the corporation?
Every condominium corporation has a unique set of rules and regulations specific to their own community. It is imperative for you to know them and understand them. If not, you could be setting yourself up for disappointment when you find out you can’t have a trampoline, a hot tub or a second dog. Infractions of the rules and regulations can result in a fine. It’s best to avoid hard feelings and extra unnecessary expenses by asking your Realtor to thoroughly explain the rules and regulations for the condominium corporation where you’re considering purchasing.
4) What kind of insurance do I need?
If I had a dollar for every time that I’ve heard a condominium owner tell me that they didn’t have a rider on their personal policy to cover the corporation’s deductible or that they thought the replacement coverage in the corporation’s policy meant they were fully covered, well, I’d be rich! Being underinsured as a condominium owner is more common than you think. As a potential condo owner, this is something that you will need in place as soon as you take possession. Plan to meet an insurance broker who is well versed in condominium insurance so that you have adequate coverage.
5) As an owner, will I have the ability to request special permission for certain rules and regulations?
You’re now living in your new condominium and you love it, but the grandkids have been asking for a basketball hoop and you enjoy tinkering on your car in the driveway. However, the rules stipulate no exterior storage i.e. leaving toys outside and working on your vehicle in the common elements is not permitted. If these are deal breakers, it’s wise to submit an offer conditional to having special permission granted for these items. You can submit a letter to the condominium board through the property manager who can either deny or allow your requests. Some boards may be more lenient on rules and regulations such as this, and others may not be open to negotiations in order to maintain equality and a harmonized exterior.
We all know that wants, desires and lifestyles change as time goes on. Getting answers to questions such as these will help to reassure you that your investment in a condominium community will be suitable for you today and into the future, no matter what changes come about.
Ideally, you will find a condo in a corporation that is managed by a licensed, qualified and experienced property management company. This offers the assurance that the operations flow effortlessly, effectively and finances of the corporation are well kept.
With over 22 years of experience in the property management industry, Vionell Holdings Partnership currently oversees 20+ condo corporations in Brandon, Manitoba.
Article by Katie McMillan. Find her on LinkedIn here!