So you’re thinking about buying a condo. Well first of all, congratulations! You are about to make one of the best decisions of your life. But we understand that sometimes navigating all that real estate and legal jargon can be difficult if this is your first time. That is why we have put together a super simple Q+A to help answer any questions you may have.
Here are some of our frequently asked questions ranging from very basic to a little more complex:
What are condo fees? Condo fees are monthly maintenance fees that must be paid by each condo owner. They are separate from monthly mortgage payments and the amount required is usually based on the unit size. These fees go toward paying for the maintenance of the common elements within the building. The expenses tend to vary widely from building to building as they are dependent upon the building and the amenities that are available (i.e. concierge services, landscaping, pools, etc.). Essentially, you can look at condo fees like a monthly auto-saver that will keep your property at the top of it’s game and ensure that you always have some left over if anything goes wrong. Some common examples of things that fees include are:
What is a common element?
Elements within the building that are shared by all unit owners. These will vary in each condo complex but tend to include things such as amenities (i.e. the gym, sauna, party rooms), elevators, patio areas, hallways, etc. The amazing thing about a condo building is that you actually own a portion of these common elements. This typically ensures that everyone takes responsibility for them and cares for them like they are their own.
What is a reserve fund? This is a pool of money that is built up in case major repairs and replacements within the building are required. A portion of the monthly maintenance fees are set aside for this fund. Such a repair or replacement could involve things such as the roof, heating system, balconies, etc. Think of this as an auto-transfer in your bank account where you stash a portion of money away every month for emergencies. In this case, the condo board does it for you which relieves any stress and ensures you always have a nice little nest egg if anything happens.
What is a special assessment? A special assessment is necessary when the pool of money within the reserve fund is not sufficient to complete the necessary repairs or replacements. This is often required when the repair/replacement is quite large or unforeseen. The board of directors will levy this charge and will likely organize a meeting for unit owners to determine a suitable course of action. In the rare occasion that your building goes through a special assessment, we understand that it can be stressful. Thankfully, the condo board handles the majority of the accounting and repairs and you can rest assured that any issues will be taken care of and the building and residents will be better off afterward.
If something breaks in my condo, do I have to fix it or does the condo corporation take care of it? Everything within your unit is your property and responsibility. But it also gives you the control to change it and upgrade it as your wish. Think of repairs as a way to slowly upgrade parts of your unit with new finishes or appliances so you can ensure maintenance does not fall behind.
Do I Need To Buy Property Insurance? Yes, obtaining an insurance package to cover contents and betterments is your responsibility as the unit owner. As in other cases, insurance is for your protection and will only help you in the case of an emergency.
Am I Allowed To Have Pets? Pets are usually permitted in most condominium buildings. However, there may be restrictions in place regarding the type of pet, size, etc. You should refer to the specific rules and regulations of the condominium of interest to confirm before purchase. Many condo developers are now realizing the importance of pet-friendly buildings and some are even incorporating amenities such as dog washes or pet daycares into their amenity package!!
How does the condo association work? The condo association exists to control, enforce, and regulate the covenants, conditions and restrictions of the building. The association has a board of directors - made up of elected unit owners within the building - to regulate and administer the rules and regulations of the property. Pretty much they take care of the building including property management and repairs, manage accounting and staff and make sure you don’t have to worry so you can enjoy your care-free space.
What do the directors and officers do? The directors of the condo associations make the decisions about the property while the officers are responsible for the implementation of those decisions. They lead the condo association in their initiatives and manage the processes to be as effective and efficient as possible.
What are the benefits of owning a condominium? Unlike apartment ownership, a condominium owner has complete control over the interior design of the unit for anything that does not require a structural change. Another benefit is the unit owner only needs to be concerned with maintenance inside of their condo - as things such as landscaping, snow removal, etc. - are covered with the payment of condo fees.
Ownership is also a way to build equity with each payment you make. Even though a portion of your monthly expenses will be going towards condo fees and interest, the remainder will be paying off the principal of your mortgage which is essentially going back in your pocket. Also, real estate will typically appreciate over time so while you are living there you could see a substantial increase in the value of your property which would be realized upon sale.
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