Buying a Condominium, also known as a Condo
If you are considering buying a condominium, it may be one of your largest financial investments so please make sure you research before signing on the dotted line says Linda Pinizzotto, Real Estate Sales Representative and Founder President CEO of the Condo Owners Association.
Linda has provided COA with this extensive portfolio of information for your protection and has recently launched her Radio Show “Condo Xpert”. She is an Award Winner Realtor, Government Relations Chair and Director of a local Real Estate Board.
Consumer Protection is Important
New Vs Resale Condominiums
- Buying a New Condo from a Builder
- Buying a Resale Condo on the market
- Understanding Mortgages
- How Maintenance Fees affects Value
- How Low Reserve Funds affects Value
Status Certificates – Resale Condominiums
Buyers should have a condition requesting a Status Condition on their Agreement of Purchase and Sale. The Condominium corporation has 10 banking days to provide the Status Certificate and relating documents to the Buyer. The Buyer should then have 2-3 days (whichever amount is on the Agreement of Purchase and Sale) to have their Lawyer review these documents to his satisfaction. If the lawyer is acceptable to these documents; he will notify the buyer who then has the option to release the condition and finalize the sale. Most times lawyers will not approve the Status, documents etc. if their are financial concerns on the building and/or if there is something that may be a future problem for the Buyer.
The Status Certificate package should include:
- Condominium Documents
- Auditor approved Financial Report
- Reserve Fund information and accompanying confirmation
- Insurance Company Letter confirming up-to-date condo building insurance and particulars
- Cover letter from the Board outlining unit maintenance fees, arrears etc. relating to Unit
- Any additional information relating to the condominium building ie Loans, Liens, Law Suits
- Is the Building Registered with the Condo Owners Association
Condo Reserve Funds and Operating Budgets
COA believes Condo Owners and all Home Owners should understand the operations of a Condominium and their financial structure, in particular operating budgets and reserve funds.
The financial package of the condominium buildings makes a huge impact on value therefore affecting the mortgage and real estate value. There are key considerations to maintaining value in a condominium building aside from location and good management/maintenance. The Reserve Fund is extremely important, see notes below:
- High reserve funds creates good value within a condominium corporation
- Board of Directors should have studies to determine that the contributions for reserve fund are adequate to provide for the expected costs of major replacement (per item 4 below)
- Board of Directors who follow study reports for major repair and replacement of the common elements and assets of the corporation (as mandated by the Condo Act 1998) helps maintain value of the building and units
- Boards of Directors decisions must comply to all mandates of the Condo Act 1998
For More Insight into Condominiums
- COA listed on Provincial Government Website (at bottom of page)
- Building a Better Condo Act