Questions to Ask When Considering the Purchase of a Condominium
- by Lisa Skirten, Director
There are any number of reasons that you might be looking at a change in your current lifestyle. Freedom to rely on oth- ers to maintain your landscaping in the summer and clear the snow in the winter and to have one point of contact for repairs and maintenance can seem very attractive. Condominium living can be the way to go; however, some research is recommended beforehand. Now what do you need to know to make the right decision? Your realtor can cer- tainly help with location, amenities and resale value. They can also obtain docu- ments specific to the condominium property you are attracted to. Your law- yer can also assist with outlining your legal obligations, title search, and re- strictions. But there is so much more to consider.
so potential buyers can review them to ensure that you are comfortable with the manner in which the corporation is man- aged before making an offer. Restrictions for use If a condominium is being considered as a rental investment, all the more reason to ask if the corporation has limitations on use or lease terms. Most residential condominiums only allow for single fam- ily use and a minimum 1-year lease term. With these restrictions, you cannot rent to students or roommates. And with Airbnb growing, your condo can’t be rented out for short term use. Ignoring either of these scenarios could lead to legal action, and if found at fault, re- sponsible for all legal costs. Occasionally condominiums limit the size of a pet or type or all together don’t permit pets. You may also find condo- miniums that are smoke free communi- ties. These rules are also enforceable with legal action if not followed. Financials Condominiums are operated similarly as a small city might be and the financial position will be important. You should be considering that the corporation has an adequate operating fund. I encourage my clients to look for a buffer of 2 month’s common element fees at all times. Every corporation will also have a reserve fund which will provide infor- mation on future planning on the prop- erty. A Notice of Future Funding of the Reserve Fund is conducted every 3 years, so this funding plan will help you identi- fy the average increase over the 3 years is to be. At minimum the common element fee should be increased by this amount, if needed every year. If you find there has been a special as- sessment levied, it is important to deter- mine why. Special assessments are used
Lisa Skirten is a Condo- minium Manager with Skirms Ave. Property Management and a Sales Representative with Accsell Realty Inc. She was elected to the CCI Board of Directors in 2019.
Here are a few questions you should be asking before making an offer:
What are the restrictions for use? Are there leasing restrictions? Are there any pet or smoking re- strictions? Are there any Special Assessments, and why? Is the operating fund maintaining a healthy balance? Is the reserve fund study current and is funding in line with the study? What maintenance are you responsi- ble for and what belongs to the Corporation? Who is responsible for the mainte- nance/replacement of altera- tions/betterments? As condominiums are governed by legis- lation, a visit to the Condominium Au- thority of Ontario (CAO) website can be very helpful. Every corporation has gov- erning documents, including a declara- tion, bylaws and rules. Some sellers will have a copy of these documents available
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