“It used to be that condos played second fiddle to the prewar co-ops. Now, there’s a lot of status attached to living in the latest great condominium building or high-rise. People think it’s cool? It’s like owning art.” - Pamela Liebman, President and CEO at the Corcoran Group
There is a lot to know about condominiums, especially for those who are planning to either buy or sell a condo. And this is precisely why I decided to take the three-day course and become a ‘Certified Condominium Specialist’, a designation that is offered through the Calgary Real Estate Board. I am glad I did, as I learned a lot and I am looking forward to applying my new knowledge base to future condominium transactions with my clients, be them buyers or sellers. The course covered the Condominium Act and Regulations, and condo plans, search aspects of registered documents and required condo docs, and how to list and purchase a condo and the relevant contracts. It was a great course, very interesting. My goal now is to add value to the service that I provide, and insure that my clients are getting the best possible service from me when I represent them as their licensed real estate agent.
What is so difficult or weighty about condominiums that it requires a separate course? Here is a quick summary of the main take-away points from the course, hopefully this will be of benefit to anyone reading this post who is considering, or has purchased, a condo in Calgary.
First and foremost, a condominium is not a building style, as is commonly believed when we drive by an apartment or townhouse complex and exclaim, “Wow, that’s a neat condo”. In fact, it is a form of common home ownership and can take the form of an apartment, a duplex, a row townhouse, a semi or detached house, a stable stall for horses, an aircraft hanger space, or a place to moor a yacht. The most important thing to remember is that buying a condominium space (to live in, as that is the most common form) includes the dwelling space and common areas (i.e. parking, roads, gym, parkways, etc.). These common areas are for either the exclusive or common use by the residents. As a condo is run pretty much like a business corporation, then there can be differences about how a condo is managed, maintained and what space is allocated to which type of use. There are no set rules, per se, and so it is very important to have your real estate professional investigate and research using a variety of tools available to realtors and certain important documents. For example, not all parking stalls are assigned, some are leased or titled, and in terms of a sales transaction, you will want to know that, regardless of buying or selling as it can greatly effect the outcome.
It is recommended that new owners to a condominium complex try and join the board, or at the very least, attend all of the board meetings. This is where the decisions are made, resolutions (to make major changes to the by-laws, etc.) are passed, and if there are any ‘special assessments’ coming down the pipe, will be brought up. Furthermore, it is sort of your due diligence to being a condo owner’s responsibility, especially if something comes up that is difficult or contentious in any way. Not a bad way to meet your neighbors, too. Some condo complexes have social events and try and get a community feeling going, not just common ownership among its members. Check to see if your condo has a social committee, a website or any other events other than the Annual General Meeting (AGM) as a way to connect.
What is a reserve fund? A reserve fund is a study that looks at the cost of maintaining and repair/replacing certain aspects of the condo complex, such as roof repair / replacement, paving roads and side walks within the boundaries of the complex, repair/replacing the exterior finish to each unit, etc. This study must take place within 2 years of a condo complex being built, and should be undertaken again every 5 years afterwards. It has an outlook for the next 25 years. Each unit owners’ condo fee contribution is budgeted to be a certain amount and will cover certain aspects of the condo budget. It is important to know this and how it works, as a special assessment is usually called for because there is no extra money in the budget to cover what ever it is that is needed. For instance, if there is a leaky condo situation in a complex, obviously something that wasn’t budgeted for, then a special assessment will be called for. This money will be asked of each unit owner over and above the monthly contribution. It can be a small amount, manageable by most, or it can be devastating to each condo owner. This is where it is good to buy into a very well managed (not necessarily means high condo fees) complex, and join the board and attend the meetings. Knowledge is power.
Condominium document review and home inspection - are these two both required at the time of purchase? Yes, they are. Period. They are not mutually inclusive, and so it is good to get both a condo doc review done on the documents made available from the seller’s side and to organize a home inspector to come in and take a look. A home inspector in a condo complex will not necessarily be able to view the broiler room or the roof; so, if there are issues with either, they will most likely have come up in the minutes of meetings, and will be contained with the condo docs. Hence the need for a professional to review them on your behalf. Just note, a licensed realtor is not authorized to do a condo doc review, nor are they qualified (usually) to perform a thorough home inspection. Sometimes it isn’t just about turning on the washer / dryer to make sure they work. Home inspectors need to be certified, and it is best to use a qualified authority on condo docs (i.e. a lawyer or a person who is experienced and qualified). Your realtor should have a list of condo doc review specialists and home inspectors to recommend.
This little post doesn’t cover the extent of condominiums, but it gives you an idea that there is a lot to know. You can only know what you know, that is why you should consider a real estate professional who has the knowledge when making a condo decision to either buy or sell. If you have any further questions, need more information or would like to book a free home evaluation, please feel free to contact me through my website: www.movingyouforward.ca.