What to Know When Buying a Condo

I always advise my clients that when you buy a Condominium you are actually buying two things:

  1. Your individual unit, and
  2. share in the condominium corporation that owns and maintains the land and all of the common elements such as elevators, outside grounds, security, parking etc.

That's why it's just as important that your condominium corporation is in as good condition as your individual unit.

To find out the "financial health" of the corporation, it is crucial to request a 'Status Certificate' as part of your offer. This is a standard condition that I include in the Offer for the purchases of all condominium units. As a buyer, your lawyer will review these documents prior to finalizing any purchase.

When looking at condominiums, you must also consider the building itself. The choice of the building can shape your 'lifestyle'. The 'building lifestyle' is determined by three factors:

  1. Building Amenities (i.e. pool, gym, 24 hour concierge etc)
  2. Location (i.e. accessibility to public transit, distance from arterial roads)
  3. Mix of Owners (i.e. ratio of owners:renters, average age of occupants)

Condo Maintenance Fees

You may wonder why maintenance fees differ so much between buildings?

In general operating costs for condos are typically quite similar. However, there are 3 main factors that explain the variance:

  1. Some buildings include all utilities while other buildings include only partical utilities, while others have direct, individual billing to owners.
  2. Each building pays for different amenities such as 24 hr. concierge services, underground parking facilities, indoor and outdoor swimming pools, roof top patios etc. These amenities increase overall building maintenance fees.
  3. Each corporation is required to create and save a reserve fund from the monthly maintenance fee to pay for major future repairs. The building's Status Certificate is an audited annual report which will clearly indicate to your lawyer if the condo corporation is in good financial standing. (See below for more details.)

What are the advantages of buying a condominium?

There are many great advantages to buying a condo:

  1. Condo ownership is a great way to enter the real estate market, and become a property owner. In some circumstances, they provide an economical way for first time home buyers achieve their dream of home ownership.
  2. Condo ownership offers the independence of home ownership without the hardship of maintaining a freehold property. This is an ideal setup for those who are downsizing from larger homes, and wanting more personal freedom.
  3. Different condo buildings offer Lifestyle’ perks, that might be unattainable in a freehold home situation.
  4. For Canadian Snowbirds, jet-setters and avid travelers condo represent an worry-free ownership alternative when spending extended periods away from their property.

Status Certificate

When purchasing a resale condominium unit, your offer should be conditional on having your lawyer receive and review a Status Certificate and the accompanying documents. This Status Certificate is the resale equivalent of a disclosure statement.  It discloses whether the seller of the unit you are buying is current in the payment of common expenses as well as a picture of the condominium corporation's financial affairs. Your lawyer will review all the related materials to ensure that both the condominium unit and the condominium corporation are suitable for you.

This document typically costs $100 inclusive of GST, and must be provided within 10 days a request. 

For more information about buying a condominium, please give Claire a call at 416-918-6325.