Buying a Condo - Info
- Advantages of Buying a Condo?
- Disadvantages of Buying a Condo?
- Condo Maintenance Fees
- Warranty on New Construction?
- Who Manages the Property?
- Can I Rent Out a Condo Unit?
- What Details Should I Find Out Before Giving an Offer?
- What is a Status Certificate?
Advantages of Buying a Condo?
Originally condos were developed to be a cheaper form of housing. Instead of having to buy the land and the building, people could own their unit and share the land cost. This makes it possible for private ownership in high value areas (such as downtown). Condominium living is different from owning/renting a detached house, townhouse or apartment because condo owners hold title to their units and share the expense for the operating costs of maintaining the common areas (such as lobbies, recreational facilities, gardens, etc). The advantages to condominium ownership are:
- It may be less expensive than other types of home ownership
- It can provide an immediate sense of community
- Access to top-of-the-line recreational facilities
- No need to hire/pay for snow removal or grass cutting
- Participate in the community decision-making process
Disadvantages of Buying a Condo?
Any type of property ownership has its own unique disadvantages. Condominium corporations may set restrictions on such things as owning pets (allowed or not, or specific sizes) or having an outdoor barbeque. Also, a lot of new condo constuction do not have large (if any) private balcanies, guest parking is often limited, and resale value often times does not grow at the same rate as for freehold homes.
Condo Maintenance Fees
You may wonder why each condo building has different monthly fees. What creates the difference is that some buildings include some or all utilities in the maintenance fees while other buildings have the individual owners pay the utilities directly. Secondly each building pays for different amenities such as 24 hour security guards, valet parking, free shuttle bus, swimming pools, fitness centres, etc. Finally each condo corporation is required to set aside a portion of the condo fees for a reserve fund to pay for future major repairs (such as upgrades to the common areas, window/door replacement, or unforseen repairs). Maintenance fees are usually determined by the size of the unit, so the larger the unit, the more fees are paid.
Warranty on New Construction?
The Ontario New Home Warranty Program (ONHWP) provides protection for condominium buyers of newly constructed residential units. ONHWP does not apply currently to units that are renovated or built on existing foundations. This program guarantees the buyer that any deposit or down payment made by the purchaser of a new condominium unit up to a maximum of $20,000 will be returned if the developer is unable to complete the transaction. Also it warranties the construction of the units from the date of occupancy, and the common elements from the date of registration, for one year against most defects, for two years for the mechanical and electrical systems, and for seven years against major structural defects.
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Who Manages the Property?
In most cases a property management firm, under the direction of a Board of Directors, runs the day-to-day affairs of a condominium corporation however some condominium corporations are self-managed. The Board of Directors is responsible for carrying out the obligations of the Corporation as set out in the Condo Act and any agreements to which the Corporation is a party. The Board of Directors are chosen by election from the owners of the condo units.
Can I Rent Out a Condo Unit?
Yes, it is very common to rent out a condo unit. A Lease Agreement is signed between both parties, whereby the tenant is required to abide by all condominum bylaws. Usually, the lease is signed for 1 year minimum where the landlord receives, in advance, all the post-dated cheques. Contact Conrad Rygier to help find you a tenant.
What Details Should I Find Out Before Giving an Offer?
When buying a condo unit it is important to find out:
- How old is the building? Will it need repairs soon?
- What is the financial status of the condo corporation (check Status Certificiate)
- Is the unit airconditioned and soundproof?
- Is the premises monitored with 24-hour security?
- Is a parking spot included with the unit? Are there many visitor parking spaces available?
- What are the recreational facilities and what condition are they in?
- Is the unit close to a grabage chute or elevator?
- What is the condition of (if included) the appliances?
- Are there any restrictions with pets?
- Is there a chance that the view will be obstructed with new construction?
What is a Status Certificate?
The Status Certificate contains all the information about the amount of money presently held in the reserve fund (at least 10% maintenance fees must be set aside for future repairs). Accompanied with the Certificate are documents which include copies of the declaration, description, current rules and regulations, bylaws, and any financial information for the corporation and for the particular unit under consideration. The cost of acquiring this Certificate cannot exceed $100 (inc. GST) and has to be provided within ten days of request.
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