Buying a Condo? Must-Have Checklist PRIOR to Purchasing!
Essential guidelines to consider when purchasing a condo
Buying a condo, with all its idiosyncratic risks is often a complex task which can quickly lead to a source of stress. There are many factors to consider before buying condos including association fees, your lifestyle and the building’s reputation.
1- Condo fees and hidden expenses
Once you have identified your listing (s) inform yourself on the condo fees associated to your future unit. The co-owners must contribute to the co-proprietor costs based on the operations of the building. Those fees are in place to cover the current maintenance expenses of the establishment’s common areas.
Verify that the proprietor has his papers in check for the condo fees. If the seller happens to have an outstanding balance, it will be up to you as the new owner to look after the discrepancy. Furthermore, if major construction is scheduled to take place in the building a special contribution may be voted in by the co-ownership union to cover the costs.
It is therefore important to keep an eye out for these types of surprise expenses to avoid having to pay extra fees when you are admitted into the co-propriety.
2- Condo association trust fund
For unexpected expenses, the co-propriety union, by law, have to create a trust fund where a certain percentage of the condo fees are set aside. Unfortunately a lot of unions don’t follow these guideline. Prior to purchasing your condo, ensure that you have secured a sufficient amount of funds aside. Once the keys are in your hands you’ll have to deal with the current situation whether it is favorable to you or not. It is your right to know the current state of the tenant contributions being allocated to the trust fund.
Far too often the co-propriety trust funds are insufficient despite the deferred tax paid, generally equivalent to 5% for the condo fees charged to its co-owners.
3- Condo Union management
As an informed buyer make sure to look into the management the co-proprietor union and developments in the past 1-3 years. Start with their financial statements to find out if the funds have been properly managed, whether there is enough capital to look after the current costs and those required for the building maintenance.
The state of the co-ownership management can be found in the minutes (written reports) from the co-owner assemblies. A healthy managed co-propriety should include concise notes of meetings when evaluating if they took the proper measures on certain initiatives and its common ressources.
Evaluating the assembly minutes will reveal whether there have been conflicts or harmonious relations between co-owners. Do not hesitate to ask for the maintenance booklet which well managed co-ownership’s keep in check on a frequent basis. Informing yourself on the existence of the booklet will also give you insight on its union and whether they are respecting it.
4- Find out about your neighbours
The neighborhood should have a big impact on your buying decision. Because living in a condo means you are to close to your neighbours. Also, there are chances that the noise and smell pass all around. Do the people living near you affect your environment as well? It is important to find out who your neighbors are as it will affect the atmosphere you are living in. it is advised to find a place according to your age range.
5- Anticipate unforeseen time delays
How much time should one foresee in delays? It varies but from experience 15 or more days is generally the time frame it will take to revise all documents pertinent to your purchase.
Further advice on buying a condo
- Request a co-ownership declaration, the ones which constitutes the contract binding all co-owners and which includes all the building regulations
- Find out what the monthly condo fees are and if there’s a special contribution has been or will be voted in
- Inform yourself on the contingency fund and on the contributions that are being made
- Consult the minutes from the last year of meetings held by the board. This can provide you with informative data to help you evaluate the co-propriety management and the state of the building
- Consult www.lacopropriete.info pour useful information on co-proprietorship rights
Following these tips will ensure you get a better grasp of the co-propriety management and the risks associated. It’s about buying peace, not problems. And once your settled in discover our Montrealers guide on what there is to do in this wonderful city!
