Your First Time Buying A Condo
First you may need to know that condominiums are a broad category of housing structures. A condo may resemble an apartment. It may also be a bungalow, multi-level, or semi-detached home. It is one in a group of housing units--part of a building or complex--and may or may not not share walls. Each homeowner owns their interior independently and all share ownership of the common areas and land. Condo owners essentially own a percentage of the entire development.
Each condo corporation is governed by an elected board that sets monthly fees and develops rules and guidelines for the operation of the condo. Outside maintenance is usually covered by fees from all the homeowners. Thus, individuals may need only deal with the maintenance and upkeep of their "four walls".
How Does a Condominium Work?
Condominium corporations are run by a board of directors, elected from the condo owners. They have monthly meetings, annual general meetings and must produce annual statements. The board manages operations and financial viability.
Condo Bi-Laws. There is a set of regulations that residents must live by. These bi-laws are put in place by the board and can vary from complex to complex. Bi-laws dictate everything, from how the board is structured to how many pets someone can have, whether clotheslines are permitted and if the properties can be leased. It can be said that condominium complexes have personalities, and that those personalities can vary. While one condominium corporation may not suit you at all, another may suit you perfectly!
10 Day Cooling Off Period for Possible Condo Purchase Cancellation. Does the thought of bi-laws and rules scare you? Don't worry. There's adequate time to review all of the documents that must be provided to a purchaser. Some buyers may not be aware of the possibility of changing your mind on a new condo purchase within 10 days. This gives you time to have all the documents thoroughly reviewed. The 10 day period starts upon your receipt of all the documents, such as the estoppel certificate. ( What is an estoppel certificate? It is a document to provide critical information on the property. )
A piece of consumer-protection legislation, the Condominium Act was revamped by the Government of Newfoundland and Labrador in 2011. Under it, developers and condo corporations must adhere to specific rules.
Reserve Funds. An important addition to the Act is in regard to reserve funds. A reserve fund is built by the condo corporation through condo owner fees. The health of the reserve fund is very important to condo owners. Well-managed corporations would already have these funds in place to budget for future work and renovations on the complex but now, under the Act, reserve funds are mandatory. Each condo corporation was given two years from the date of the Act to hire a professional company, usually an engineering firm, to examine the physical health of the complex and determine future replacement costs and the appropriate size of the fund.
Research is key when deciding whether to buy a condo. Get to know the condo corporation. Understand what you are buying into.
Examine the declaration, bi-laws and minutes of the latest condominium corporation's annual general meeting. Also examine the minutes of the latest monthly meeting. This will give you a sense of the health and issues of the condo complex.
Hire a lawyer experienced with condominiums and the 10 day cooling off period to assist you in reviewing documents.
Don't assume a lower monthly condo fee is an automatic bargain. Is it enough to ensure the reserve fund is in a healthy state to cover future repairs? A higher fee may indicate a realistic look to the costs of repairs. Sometimes a slightly higher monthly fee is the better long-term investment. It pays to look closely.
Consult a qualified Realtor® who is very knowledgeable with condominiums and the Condominium Act. Such a Realtor® can help guide you, interpret the condo bi-laws, and advise you how resaleable the property will be.
Check if the complex is professionally managed. Some corporations hire professional property management companies to ensure the smooth running and maintenance of the property.
For best-in-class service, you can trust the experts at the Hann Group. Contact us today for help finding and buying your condo.
Condo Basics from Canada Mortgage and Housing Corporation Website
The Pros and Cons of Condominium Ownership from the Canada Mortgage and Housing Corporation website.
Additional Information of Condominium Purchasing from the Canada Mortgage and Housing Corporation website.
Glossary of Condominium Terms from the Canada Mortgage and Housing Corporation website