By Wayne Chaulk
As many people are considering downsizing from their acreages or just trying a different lifestyle with less responsibilities, condo living is often a consideration these day, particularly with the proliferation of condo developments available downtown and in most city communities, small towns and some country areas. So if you have not yet investigated condo living and some implications of this real estate option, I have outlined a brief introductory article on condo ownership and some considerations for a condo purchase.
Buying a condo is like buying into a corporation, and with your investment you will own a portion of that corporation. All condominiums must have a board of directors that govern the building and its financial needs. Each unit owner will have a vote on certain decisions and it therefore makes sense to attend the annual general meetings each year.
All condos will have a Unit Factor which reflects how much of the corporation you own out of 10,000 shares. This may sometimes determine the condo fee amount, however, every condo corporation is different and the basis of condo fees can vary.
By law all resale condominiums must have a Reserve Fund study done every 5 years to show what maintenance the building will need over that course of time and what an estimated cost will be for maintaining the building. This is carried out by an outside source and is usually what the condo board will base their finance requirements and related budgets on and will affect condo fees.
For the purposes of buying a resale condominium the Calgary Real Estate Board has its own condo purchase agreement for this sole purpose with the contract documents and content tailored specifically to all the legalities and nuances of condo purchases. The intent is to ensure that all condo documents are provided to the buyer and that all the information properly defines the obligations of the owner. It is therefore not advisable to buy condos By Owner without the utilization of proper Real Estate documentation to ensure protection regarding the many requirements within a condo purchase.
When buying a condo we highly recommend that you have a condo specialist company review condo documents supplied by a seller as that condo check company will supply you with a full objective overview of the building in a report. There are several companies now offering this service that are familiar with all the various condo buildings and their individual characteristics, their status relative to Reserve Funds, maintenance, management of the building, assessments that may have been placed on the building etc. There will never be a “pass” or “fail” in these report but you need to feel comfortable with the condition and the future maintenance and management plans for the building. Doing an actual home inspection on a condo is strictly up to the buyer based on your comfort level. Unlike owing a home you have to have an eye on the overall development and how it is being managed and maintained as opposed to just focusing on your unit.
There are many items to be aware of when purchasing a condo but not limited to: parking - whether it is titled or just assigned, the inclusions in the condo fees such a heat, water, insurance etc., any special assessments, storage allocation if none within a unit, common areas, registered size of each unit, rent to own occupancy of the building which could play into future value, by-laws relative to many issues including whether pets are allowed, adult only condominium lifestyle, etc. It is very important to consider how you will feel about your location, the level of quietness and privacy afforded by your condo as it will be an adjustment from the space of acreage living for sure. So search carefully considering not just the aesthetic appeal of a unit but the noise transfer implication of a unit location, type of construction, access for guest parking, pet ownership in this environment and other factors.
In buying a condo it is important to consider future resale options as condos can be a challenge to sell at times given the number of them on the market at any time. I feel for smaller condos always try to have at least 2 bedrooms and 2 baths, be close to public transit and amenities. For adult only condos the internal amenities for aging clients is important as well as proximity to public transit, shopping, medical and other amenities as well.
I would certainly recommend the use of a qualified Real estate agent in a condo purchase as it can be challenging. Many agents also have specialized training and some have Condo Specialist designations as well.