By Condo Culture
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. We completely understand that navigating real estate and legal jargon in the paperwork can be difficult, especially if this is your first time. That is why we have put together a super simple Q & A to help answer some general questions you may have. For more specific questions, reach out to us and fire away!
Here are some of our frequently asked questions ranging from very basic to a little more complex:
What exactly are condo fees?
Condo fees or monthly maintenance fees, are ones 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's size and there's typically a predetermined cost per square foot for each building. The costs tend to vary widely from building to building as they are dependent upon the building itself, how old it is, the amenities that are available (i.e. concierge services, landscaping, pools, etc.), and other factors. 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, this is the reserve fund.
Some common examples of things that fees include are:
What is a common element?
These are elements within the building that are shared by all unit owners and tenants. These vary in each condo development but tend to include things such as amenities (i.e. the gym, sauna, party rooms), lobbies, elevators, patio areas, hallways, etc. The amazing thing about a condo building is that you actually own a small 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 refers to 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 major 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 automatically which relieves stress and ensures you and your fellow condo owners always have a nice nest egg should anything happen.
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 or 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 be rest assured that any issues will be taken care of and the building and residents will be better off after.
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 and upgrade it as you wish. Think of repairs as a way to slowly upgrade parts of your unit with new finishes or appliances, so you can ensure maintenance stays up to date.
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.
Can I Have Pets?
Pets are usually permitted in most condominium buildings, however, there may be restrictions in place regarding the type of pet, size, breed, etc. You should refer to the specific rules and regulations of the condominium of interest to confirm before purchasing a unit. Many condo developers are now realizing the importance of pet-friendly buildings, and some are even incorporating amenities such as dog wash stations 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 condo?
A condom 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, cleaning of the building, etc. are covered thanks to the payment of condo fees. Condos are also typically in urban areas with lots to see and do near by, amenities are nice to have, there's a good community feel to them, and so much more.
Ownership is also a great way to build equity with each mortgage 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 on 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 fully realized upon a selling event.
As you can see, there's so much to keep in mind when buying a condo - perhaps the most important pieces of the puzzle are working with a quality brokerage and agent. We are the condo experts around the Waterloo Region, connect with us for all of your condo needs.