Rose Reports On... Condos

What is a condominium?

A condominium is a type of ownership where certain parts of the property (the units) are owned by individuals and certain parts (the common elements) are owned in common by the unit owners, all of whom are members of the condominium corporation (the organization responsible for the operation of the condominium). Ownership of a condominium means you own the specific unit plus individual interest in the common property. You have ownership over all space and improvements within the walls of your unit.

It is very important to realise that you are buying into the condominium building first and then the unit, so make sure you like the building, the way its managed and its financial position.  This is where I can help assist you as a certified Realtor®.

Below are some questions/concerns that previous clients had when purchasing a condo.  I hope you find this guide helpful.

What are condo fees?

A condo fee is a fee that each owner is charged to cover the expenses for the complex and individual unit. For e.g. in a high-rise condominium, the condo fee includes all utilities, plus building insurance, management and reserve fund contributions. When the plan is registered at Land Titles for a condominium, a separate title is created for each unit. Shown on each title is the owner's share in the common property, which is expressed in "unit factors". This "unit factor" can be based on the unit's proportionate square footage or the initial market price in comparison to the rest of the complex. A budget is prepared for a condominium complex and the fees are allocated according to the unit factor of each condominium unit.

Are there property taxes for condos?

Yes there are property taxes for condominiums and they are also calculated based on the "unit factor".

What is a reserve fund?

A reserve fund is money that is set aside by the cono association for repairs, maintenance or improvements. A portion of the monthly condo fee goes to this fund. In the budget planning stage of the condominium, it is important to analyze the state of repair of the complex and decide what percentage will be required to complete the necessary work. It is imperative to have an adequate reserve fund because, if there's a shortfall, all the unit owners will have to pay an additional fee. Condominium corporations usually plan to future expenditures according to their reserve fund.

Who manages condominium complexes?

Owners of the condominium either hire a management company or the owners set up their own management group who do it themselves.

Are there any special documents required for a condominium?

Yes the documents required are:

• Condominium Bylaws – The rules and regulations that a condominium is governed by. They are set up to protect the interests of the condominium owners.
• Current Budget and Financial Statement – The budget is their plan for the year. The financial statement is what actually occurred and the amount they have saved.
• Property Management Contract –This lays out the responsibilities and obligations of the company or individual hired to manage the condominium complex.
• Insurance Certificate – A certificate showing the amount of liability insurance on the entire building and the fixtures as originally built.
• Leases on parking stalls & storage – if applicable.
• Estoppels Certificate – The legal document from the condominium association stating the following:
  
  
  • The current condominium fee
  • When its due and payable monthly or quarterly
  • The arrears, if any, owen by the condominium unit owner.
  • Any special contribution levied to each unit by the condominium corporation.
  • Any outstanding litigation on behalf of the condominium corporation and the possible results.
  • The amount of the reserve fund, established by the condominium corporation to be used to effect necessary repairs.
  • Any condo fee increases anticipated in the future.
• Minutes of the Association's Meetings – The minutes will tell us what has happened and what the condo association’s plans are for the future.

Do Condominium owners need insurance or is it covered in your condo fee?

The condominium corporation likely has insurance that complies with the requirements of the Condominium Property Act and the condominium bylaws covering the insurance of the building. The condo owners are responsible to insure their personal belongings, furnishings personal effects as well as insurance coverage on the improvements made to their units.  If a pipe breaks, or there is seepage from an adjacent unit, contact the manager and your own insurance company. The insurance company will arrange for repairs and determine liability.

Do condominium owners have the freedom to bring in pets?

Some condominiums allow pets with the permission of the Condominium Association. The Condominium Bylaws for the complex will specify if pets are allowed.

Do some condominium complexes have age stipulations?

Yes. There are some condominium complexes that specify “18 or over” or “45 and over”. Children are allowed for visits only for short periods of time as specified in the Bylaws. To verify these restrictions check the Bylaws. Some developers have registered restrictive covenants on some properties to limit the use of the property. For example, restrictive covenants are registered regarding any age stipulation.

Can you rent out your condominium?

Again you would need to check the Bylaws of the condominium.  Some condos do require you approval of your tenant and hold the damage deposit.

If you have further questions about Condo’s please don’t hesitate to ask!