So your last rent cheque cleared your account and you are thinking “maybe it’s time to start building some equity of your own instead of contributing to the Landlords”. You have managed to save some money towards a down payment and the folks who raised you recently offered to help you out with that also.
You have heard that a condo is the best and most affordable first home choice. So you start the mental arguments of whether to buy a condominium apartment or a condo townhouse. Before you start to wrestle with these issues there are some other things you need to know and consider about buying a condo in general.
What Does Owning a Condo Mean?
Condominium owners have title to their own unit while sharing the ownership, upkeep and responsibility for the rest of the property such as the hallways, lobby, gardens, recreational facilities and parking areas which make up the condo corporation.
There are a number of crucial Questions you need to ask yourself when considering a condo purchase. Most condo owners like the idea of not having any maintenance headaches and are more than happy to pass these along to a condo corporation. Remember though these maintenance activities have to be paid for by you and all the other owners in the building or complex.
What Are the Condo Rules?
Condo living is not for everyone. There are some lifestyle changes you may need to adjust should you decide on condo living. That brand new hardly used gourmet BBQ you bought last season may end up in your locker not on your balcony. Condo corporations have a set of rules and regulations governing such things as pets, car washing in the parking area and yes BBQ’s on the balcony.
What is a Status Certificate?
In Ontario every offer to purchase a condo must contain a 10 day conditional clause allowing the buyer to examine the rules and regulations as well as the financial operations of a condo corporation together with the ability to walk away from a potential purchase within the 10 day period if they find something they cannot live with. The document delivered to the buyer by the seller is known as the Status Certificate.
It is well worth the money to have a lawyer check these documents to make sure that not only is the condo corporation in sound financial condition but also to bring to your attention any rules or regulations that may potentially affect your individual enjoyment of the unit.
You will want your lawyer to check if there are any special assessments in place or coming up in the future. Special assessments are fees in addition to the monthly maintenance fees that are sometimes levied by condo corporations for large unexpected repairs or lawsuits. Remember the condo corporation may be responsible for carrying out these duties but the funding of them comes from the owners.
In Ontario condo corporations have to set aside a portion of the monthly maintenance fees by law to take care of future repairs and upkeep.
Does the Condo Allow Rentals?
Another crucial question to ask when buying a condo is how many units in the building or complex are rented. Renters do not always have the same pride of ownership which may affect future value.
On the other hand, you may be buying a condominium now with the intention of making it your primary residence in the future but plan on renting it until that time comes. Some condominium corporations may have restrictions on your ability to rent out your unit. You can obtain this information from the Rules and Regulations section of the Status Certificate.
Should I Buy New or a Resale?
If after getting this far in this article you have decided that a condo lifestyle is for you, your next decision will be whether to buy a resale or a new condo.
If you decide upon a resale condo you will be able to physically inspect the building as well as the unit itself. You will see first hand how the building is being maintained and whether or not the management company is doing a good job.
You will also be able to see the kinds of neighbors you will be living alongside and whether or not you feel the building itself will be a good “fit” for you.