Is Condo Living For You?
Many people wrongly think the term condominium (condo) refers to high-rise apartment buildings. In fact the term relates to a type of property ownership in which individuals own units in a larger complex as well as jointly owning, and being responsible for, the complex itself. So, should you go for a condo, or purchase a house outright? Each option has its pros and cons.
Condos are run by a condo board (also called a strata council in some localities). Essentially the building’s government, the condo board takes responsibility for collecting resident’s condo fees, spending these appropriately on the upkeep of the building, and (hopefully) maintaining and building a contingency fund sufficient to take care of unexpected expenses.
The condo board also determine the rules governing the building, typically whether pets are allowed, whether owners can rent out their units, whether children are permitted etc. Rules may also govern the degree to which owners may modify their units, particularly in outer appearance.
Typically, condos are associated with inner-city living, single professionals, first-time buyers, and older down-sizers.
In a given neighborhood condos are generally cheaper than detached house ownership. So, dollar for dollar, you can get to live in a better neighborhood by opting for condo living.
Building maintenance is (generally) taken care of by a monthly condo fee. You’re much more unlikely to get hit by big one-off repair bills, eg for a new roof.
For those who aren’t into, or lack time for, DIY, the condo board generally arrange for maintenance, gardening etc. But the fewer the units in the complex, the more tasks may fall to the responsibility of individual owners. The more units, the more funds available to contract tasks out (and the lower the fees per unit for these services).
You have to pay a monthly fee that can be increased over time (although house owners ought to be putting aside a monthly amount to cover big expenses).
You are subject to rules and regulations, depending on the particular condo these may seem petty and restrictive.
In a small complex you may be asked to “volunteer” for tasks like gardening, testing fire alarms etc etc.
Before buying a condo be sure to get a copy of the rules & regulations governing ownership and be sure you’re comfortable with these. For example, if you have pets be sure these are permitted, if you’re planning to rent your unit out, make sure this is allowed. Fines can be imposed for non-compliance.
Ask to see copies of recent condo board meeting minutes (ideally going back 2 years, or to the opening of the building). These will highlight any issues in the complex and may give clues to any forthcoming special assessments (ie one off charges).
Also get a copy of the statement of accounts, ideally this should be certified by an independent body. Make sure the building/complex has a healthy contingency fund. This is the money that will be used to cover one off problems such as a leaking roof. If you’re not sure how to read the accounts, seek professional advice.
Acquaint yourself with any general issues, eg in BC, Canada condos built within a certain period have been dubbed “leaky condos” due to flawed building techniques in use at this time. Such buildings are likely to need remedial work to correct the problem, so if you’re thinking of buying one check if such work has been done, or if not make sure the price reflects the likelihood of paying your share of such work.