December 2023
Despite advice provided by real estate agents, purchasing a property is about far more than “location, location, location.”
Regardless of your reason for purchasing, it is always important to understand the financial status of the condominium corporation you will become part of. If building infrastructure is in poor condition, you will eventually have to pay more in condo fees or special assessments to prevent the building or its systems from failing.
Prior to signing a purchase agreement, every prospective buyer is provided with a Status Certificate. This comprehensive document contains the condominium corporation’s declaration, by-laws, rules, reserve fund status, certificate of insurance, audited financial statements, operating budget and other information. It will tell you if the current owner owes money for payment of condo fees or taxes, and recent unit renovations that may be problematic. Financials could show an inadequate reserve fund or debt situation requiring an increase in condo fees or special assessment. There may be one or more costly lawsuits involving the condominium corporation that may result in significant payments.
Documents that are part of the Status Certificate will address lifestyle considerations:
- Are pets allowed in the community
- Availability of parking and storage
- Is smoking of tobacco and marijuana allowed
The ideal condo for living differs from an investment purchase. When purchasing a primary residence, a larger unit provides more personal living space. Access to appropriate amenities is important. Look for those that are of personal interest or importance. If you have no intention of using a swimming pool, monthly condo fees will be higher since the amenity must be maintained regardless of your personal interest or use. A larger unit and more amenities increase both the purchase price and monthly condo fees. A better maintained community is more desirable to live in and will cost more to maintain.
When the purchase is for an investment or rental property, a larger unit is a more expensive purchase, appeals to more individuals and generates more rental income. A community with more and nicer amenities likewise makes the property appealing to more people and commands higher rent. It also means higher condo fees.
The ideal condo purchase is elusive. It varies depending on one’s purpose, interests and income.
