If you plan to buy a condominium, it's often said that buying a condominium is buying a lifestyle. What does that mean? Condominium living is different from owning or renting a single dwelling or apartment, because condos have a dual nature. Condominium owners hold title to their units and yet share responsibility for the operating costs of the balance of the property - the common elements such as lobbies, pools and hallways, which make up the condominium complex.
There are many advantages to condominium ownership. It may be less expensive than other types of home ownership. It can provide an "instant" sense of community. Someone else shovels the snow.
But condominiums are not for everyone. Condominium associations may set restrictions on such things as owning pets or having an outdoor grill.
Some new condo owners say they don't know what they're getting when they buy a condominium. Be sure to read the condominium documents, or better still, have your attorney read review them. These documents consists of the Declaration of Trust, the Master Deed and the Rules and Regulations.
Since these documents consist of 50-100 pages or more, normally, you won't see a set of them until after you place a written offer. That's OK. Just make sure you place a contingency in your offer stating that it is subject to you and your attorney reviewing them and being satisfied with what they say.
If you have pets, you want to make sure that they are allowed or you might have to put them up for adoption!
You also want to see a copy of the condo association's most recent financial statement and budget to make sure that there is enough cash to cover expenses without charging a special assessment to the unit owners.
Purchasers will want to look closely at the types of facilities and services that are offered. Some condos do aim to meet the specialized needs of families with small children, for example, by providing playgrounds. Others may be built with seniors in mind.
The condominium trust is run by a board of trustees elected by the owners. The board's function is to manage the condominium complex and association. Major decisions are voted on at owners' meetings. Annual general meetings must be held at least once a year to ensure that unit-owners have an opportunity to review the financial statements and discuss any issues in a timely manner. Participation in community decision-making is a benefit of condominium living.
A condo trust must maintain a reserve fund for the sole purpose of paying for major repairs and replacement of the association's common elements and assets. Trusts should conduct a reserve fund study to determine whether the fund will can cover these costs. Once the study is done, the trustees propose a plan to ensure the reserve fund is adequate.
A “condominium” typically refers to a form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex; the owner also shares financial responsibility for common areas. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.
Condos are are found in a variety of styles including high-rise residential buildings (4+ stories), low-rise residential buildings (under four stories), garden style (usually meaning 1 story units), townhouses (individual units with 2 or more floors), row houses, converted multi-families, or even single detached houses. There are even mixed-use condominiums that are partly residential and partly commercial buildings. They come in various sizes with diverse features and they can be found in almost every price range.
When you buy a Condo you are actually buying two things: your individual unit and a share in the condominium trust or corporation that owns and maintains the land and all of the common elements such as lobbies, hallways, elevators, recreational facilities, walkways, outside grounds, security, parking etc. Each individual unit is owned by and registered in the name of the purchaser of the unit. The ownership of the common elements is shared amongst the individual unit owners, as is the cost for their operation, maintenance and ongoing replacement.
Your Condo fees pay for the maintenance and operating expenses of your Condos amenities. Most Condo fees include the master insurance policy and exterior maintenance of the building. Some Condos include some or all utilities in the fees while other have the individual owners pay the utilities directly. It may also pay for landscaping, snow removal, cleaning of common areas, pool maintenance, etc. Each unit owner has an undivided interest in the common elements of the building. This ownership interest is often referred to as a “unit factor”. The unit factor for any particular unit will generally be calculated in proportion to the value that the unit has in relation to the total value of all of the units in the condominium corporation. The unit factor will tell you what your ownership percentage is in the common elements and will be used in calculating the monthly fees that you must pay towards their upkeep and renewal.
Each condominium association is required to set aside a portion of the condo fees for a reserve fund to pay for major repairs and ensures that the condominium common elements will be maintained in good shape. You do not want to move in your new home only to discover that the reserve fund is under funded and major repairs are required. This could mean a significant increase in condominium fees or the levying of charges, commonly known as special assessments, to the unit owners by the condominium trust to pay for the needed repairs. Special assessment charges can be high depending on the type of work required. Ensure you obtain and review the condominium's financial statements.
When purchasing a condominium unit, by law a 6D certificate must be issued before you can close. The 6D assures that all condo fees (common area fees) and outstanding special assessments have been paid by the current owner as of the date of closing.
Yes and no. Each condo association is different when it comes to renting or leasing your condo. Some associations place a limit on the percentage of the units that can be rented out at one time. There also may be restrictions on short term rental - only 1 year or longer leases may be required. If this is a concern for you, read the condo documents before purchasing. An owner who leases his or her unit must give the association or management company the name of his or her tenant(s) and a summary of the lease or a copy of the lease. The owner and the tenant are both responsible to the corporation. The tenant is bound by all the same documents as the owners. Top