Things to Consider When Buying a Condo

In many ways, buying a resale condo is similar to buying a house. In either scenario, the size, layout, location and condition of the condo, plus your available budget, will all play important factors in your search and decision. However, there are additional considerations you need to be aware of when you’re looking to switch to the condominium lifestyle.


To make sure you’re comfortable with your planned purchase, one of the most important questions you’ll need to ask yourself is whether condo living is appropriate for you. There are certainly advantages to living in a condo – owning a condo is generally more convenient (no more cutting the grass, cleaning the eaves troughs or cleaning up after a flooded basement), it generally offers more affordable access to home ownership, and even the opportunity to own in a highly desirable location that otherwise might be priced out of your reach.


However, if you’re downsizing from a home, it’s important to understand that condo living requires more “give and take” than what you’re probably used to. Condos often have rules regarding noise, pets, balcony furniture, barbecues, decorations, drapes, and even hardwood floors. These rules will vary from one condominium to another. It’s important to take that into consideration before embarking on your hunt for a condo.


When you do find a condo that you’re interested in, make sure any offer you submit is conditional on a review of the status certificate. It’s a document that the condominium corporation is required to provide on request, which includes a lot of critical information about the condo corporation that you will be buying into.


The status certificate will detail a number of items including:


·         the by-laws and rules you’ll be required to follow. This is a major difference from owning a house. It’s important that you’re comfortable abiding by the rules; chances are you won’t be able to change them after you move in and they will be enforced by the condominium’s Board of Directors. For example, if pets aren’t allowed, don’t try to sneak in your kitten. Instead, find another property that is more suitable.


·         the financial records for the condo corporation, including the most recent budget and the balance of the corporation’s reserve fund.  A reserve fund is money the corporation is required to set aside for emergency repairs and scheduled maintenance. If costly repairs are required in the future, insufficient cash in the reserve fund could require a steep increase in your condo fees or result in a special assessment to address a particular capital repair (for example, new windows for each unit or repairs to the aging swimming pool).


·         the common element fees, which include building maintenance, landscaping, snow removal and other services. Find out what your monthly fees will be and what it covers.


·         the utilities you’ll be responsible for – will utilities be included in your condo fees or paid separately? Each unit could have its own hydro and water meters, or there could be one set of meters for the whole building, with everyone sharing the costs equally. Whatever the arrangement, you’ll want to know so you can budget accordingly.


·         the renter / owner mix in the building– the condo corporation keeps a tally of the number of units rented out by owners. Living amongst fellow owners can be a different experience compared to living in a place where most of your neighbours are renters. So if you plan to live in your unit, a place where most owners occupy their condo may give you the kind of community you desire.


·         the parking arrangement– while the condo you’re looking at may include a parking space, the status certificate will tell you whether you own the parking space yourself, or whether it’s a common element owned by the condo corporation. If you plan to have guests frequently, you’ll also want to look into the rules around visitor parking.


It’s a good idea to have your real estate representative, and a lawyer, review the status certificate with you before waiving the condition and making your offer firm. By including a properly drafted condition, if you aren’t happy with what you see in the status certificate (for example, if it reveals a significant deficiency in the reserve fund) you can walk away from the deal with your deposit.


It’s important to know that if you’re buying a new condo from a builder or developer, you’ll have a 10-day “cooling off” period after signing the Agreement of Purchase and Sale that allows you to change your mind and walk away from the purchase with your deposit. This is not the case with a resale condo. Be sure to ask your real estate professional and lawyer about this option before you decide to put in an offer.


While any registered real estate professional could help you purchase a condo, consider working with someone who has local knowledge and experience in the condo market. Before you decide to work with one, check their references and use the ‘Registrant Search’ tool on RECO’s website (www.reco.on.ca) to ensure they are registered to trade in the province. By working with a registered real estate professional, you’ll have access to valuable consumer protections.


The Ministry of Consumer Services offers a useful ‘Ontario’s Condo Guide’ to help you make informed decisions and know your rights and responsibilities when buying a condo. Find it at www.ontario.ca/condos.


Contact me today for a Free Home Buyer's Toolkit!