Buying a Condominium
Condominium living can be very attractive to people who put a high premium on convenience, security, amenities and a community where some of the obligations of home ownership are reduced. It can also be an affordable alternative to owning a single-family home.
Before you buy a new condominium (or "strata lot", as it is known in some regions), you may want to spend a little time becoming familiar with the "ins and outs of condos".
To begin with, it's important to understand that a condominium is a type of ownership, not a type of housing. An apartment in a low- or high-rise building, a townhouse or a bungalow can all be a condo.
In essence, you buy two things when you buy a condo—a unit and an interest in the common elements. The latter may include driveways and landscaping; roofs and windows; heating and cooling systems; and elevators and corridors in apartment buildings. You may also share recreational facilities, a banquet room or a guest suite.
Condominiums are governed by provincial legislation, so the way they are established, sold and operated varies across the country. As a prospective buyer of a condominium, you should contact your provincial or municipal government for detailed information.
There are also a number of similarities. Typically, a builder or developer must register a declaration with the appropriate government body (e.g. land registry office) before a development can be classified as a condominium. The declaration describes the development in detail, and may include regulations or bylaws that outline the obligations and rights of future home owners.
As an owner, you get a vote in the condominium corporation (i.e. the organization set up to manage the common elements) as well as a proportional share in the common expenses. Monthly condominium fees cover the cost of maintaining the common elements. Typically, a portion of the fees goes into a reserve fund for future repairs and replacement.
As a new condominium buyer, you should understand exactly what you are buying into. Professional home builders and salespeople provide some helpful hints for a successful purchase:
- Make sure that new buildings or developments are covered by a third-party new home warranty. Ask the builder or sales representative for details.
- Check previous condominium projects by the builder. Drive by to see if they are well maintained. Talk with a few owners and find out if there have been any problems.
- Ask for a clear description of the unit and common elements—what is exclusively private property and what is shared? Where are the boundaries? What else is involved-e.g. a property manager and 24-hour security personnel? Look for a good match between the facilities offered by the condominium and your own interests and needs.
- Ask about monthly condominium fees. Fees may vary from one unit to another, so make sure you know the fees for unit(s) that you are interested in. Find out if utilities are covered by the fees. Ask to see the proposed budget for the corporation. Is it a realistic budget for the long term, or could you be facing fee increases soon? Keep in mind that condominium fees will be taken into account when you get qualified for a mortgage. Ask your lender for details.
- Check regulations and bylaws. Is a portion of the units designated for rental? What are the rules pertaining to exterior colour schemes, pets, barbecues and so on.
- Ask for a detailed explanation of the steps involved in the buying process. (Provincial requirements for registration vary, affecting the sequence of construction, sales and final occupancy by owners.)
- Have a real estate lawyer check all aspects of your purchase and review the Agreement of Purchase and Sale before you sign it.
- Find out if there is a cooling-off period for buyers of new units. Typically, the builder will provide a disclosure statement around the time of signing the agreement. If there is a cooling-off period (generally 3 to 10 days), you can terminate the deal within that period if the statement contains information that you were not aware of before.
- Once you have bought your new condominium, get involved! Stay informed. Go to meetings of the corporation. If time allows, consider becoming a member of the corporation board. This gives you an active role in the ongoing management of the development, and it provides an opportunity to get to know your neighbours.
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