ERIN HENRY
Sales Representative, Royal LePage Real Estate Services Ltd. Brokerage
Erin Henry is an experienced Sales Representative providing comprehensive real estate services to home buyers and sellers with over 25 years of dedication and expertise!
erinhenry.ca
Buying and living in a condominium is a very unique experience. It is essential to be aware of the advantages and disadvantages and proceed with your eyes wide open, but condo ownership can be very rewarding! Further to my previous article in March, here are some guidelines to help simplify and clarify key components to purchasing and owning a condo.
Let’s start with a basic information checklist. What expenses are imposed pre- and post-purchase? What documents will you encounter before you complete the sale of your condo? What safety measures are in place for the successful financial operation of your building, including building insurance? What restrictions might you face with ownership?
The expenses incurred will vary, however in most cases, you will have mortgage payments, property taxes, monthly common elements fees and utilities. The common elements include some utilities, percentage contribution to the Reserve Fund and building insurance. Depending on your agreement, be aware you may have an equipment rental, a Reserve Fund Study, or possibly an Engineering audit of the building. All of which depends on the nature of the building, new or resale, and your contract. Seek the advice of your realtor and/or lawyer.
When purchasing a condo, it is prudent to request the Status Certificate, Reserve Fund details, as well as the declaration, by-laws, rules and regulations. Generally, your lawyer will review and discuss prior to finalizing the paperwork. In most cases, this condition is inserted in the agreement of Purchase and Sale for the benefit of the Buyer. You want to be confident that the building is in good legal and financial standing. Also, that there aren’t any restrictions that will interfere with your lifestyle and needs, for example, pet restrictions or renovations.
As previously mentioned, the Status Certificate and Reserve Fund are vital pieces of information to a well-educated buyer. Are there any lawsuits or pending litigation against the building/corporation? Are there any assessments owing or upcoming? What is the Reserve Fund balance? What is the schedule, if any, for maintenance fee increases? You want to ensure satisfactory financial safety in the event, the building requires a major repair, or timely update. As well as know your costs — no surprises.
Buying and living in a condominium is a very unique experience.
— Erin Henry
How is a condominium insured? As per the Condominium Act, the corporation has an obligation to restore or repair your building to replacement value, should the need arise. The onus is on the owner to pay the deductible, however, the premiums are paid as part of your monthly common expenses. This does not include interior contents and fire insurance, which is owner responsibility. It is important to investigate the building policy and compare to yours, to ensure there are no gaps should a claim be made.
With a condominium, unlike other types of home ownership, there are restrictions. All unit holders must abide by the corporation’s declaration, by-laws, and rules. No owner can neglect or destroy their unit as this decreases the overall value and perception of the building.
In most cases use is restricted to residential unless zoning permits otherwise. No owner shall partake in any actions that may nullify the condo insurance coverage (for example, having a BBQ on a balcony if prohibited, or make structural changes without authorization). Finally, interior cosmetic alterations and decorating are generally acceptable unless it changes the overall appearance of the exterior of the building. These specifications can be found in the rules and regulations reviewed prior to purchase.
As with any major real estate acquisition, educating and understanding should be first and foremost…consequently a relaxed, rewarding, and exciting end result!
For further clarity or general questions, contact Erin anytime.
*All information correct at time of publishing and should be verified by the Purchasers and Sellers
