Purchasing a condo, when buying a condo you are buying into a piece/partnership of a Condo Plan. A condo can be a building, a duplex, a townhouse, to even a detached looking home. Condo ownership comes with strict rules "Bylaws" to abide by for your home/unit/building/complex. Each complex will be similar and different with their rules/bylaws making it important to know what these rules are that you are to be living by. The bylaws can apply to things like pet restrictions, age restrictions, tenancy restrictions, business restrictions (your personal business or AirBnB), parking restrictions, building guidelines/restrictions, and more! So when your buying a condo you have to keep in mind, there are rules. Want to renovate, or do a certain type of flooring in your unit? Your bylaws may have a flooring restriction to the type of flooring your allowed to use! All Condo Corporations must abide by the Alberta Condominium Property Act basic guidelines of their operations. Which sets out the basic rulings required to operate and how condo’s will all be similar. From there, differences will be created between the different condo complex’s through the bylaws they create and enforce.
The Acts states condo funds must go into a Reserve Fund (account) which is for paying for the maintenance, repairs, and renovations of the Condo Plan (building/complex). To ensure this Reserve Fund is being properly funded, a Reserve Fund Study must be done. These studies are required to be completed every 5 years and are a professional, comprehensive inspection of the condominium's depreciating property (the building, roof, heating system, plumbing, entrance doors, elevators, parkade, paint on walls, eavestroughs, piping, etc.). The study confirms what the current condition are, and helps establish suggested timelines for costs of repairs, renewals of certain things (Example, hallway carpets in 3 years), and also provide an idea of when items will potentially be end of life. Which all this information is needed to determine what will be coming up over the coming years, and if the Reserve Fund balance is accurately going to fund those needs as they come up. Which if it is not, monthly condo fee’s often increase. As well assessments are often issued to pay for shortfalls or upcoming projects.
The Condo Board is made up of unit/home owners of the Corporation (usually 2/3rds are owners/mortgagees). The board runs regular meetings (usually monthly) called "Minutes / Minute Meetings". This is where they will discuss the condo complex and its operations. Concerns that come up with the complex, things that are broken in the building, insurance claims, tenant issues, plans to upgrade, renovate, remediate, as well as visions for the future. All of these bits are discussed during meetings. Being part of these meetings is very important as an owner! As this is your access to being part of the conversation and decisions! Remember if the board wants to split the $80,000 parking lot upgrade as an assessment to each owner. Instead of simply withdrawing it from the "Reserve Fund". These meetings is where those decisions are voted on and made. Which all of this information in the end is translated and held by the management company in the condo documents.
Each condo board will have some sort of property management company (some choose to self manage) to run the condo’s affairs. The management companies role is just that, manage. Manage the building/complex repairs, maintenances, snow removal, bills, financials. As well, holding all the corporations information and documents together in one place. Which we call all these documents "Condo Documents". Condo Documents consist of all the important information that are key pieces required for your purchase!
Just because its professionally managed, and has a board filled with members / owners. Does not mean or ensure it is being done right! It is extremely important to have this Condo's health & management professionally reviewed and assessed! Which this should always be done through a professional Condo Doc review company, whom specialize is just reviewing these type of documents! One of the most conditions in your purchase is this review of these condo documents! Think of it as part A to your inspections of the property. A condo document review often uncovers the financial and operating health of the complex. Are you buying into a money pit with problems, mismanaged, and assessments ahead? Or does this complex appear to be well managed, financially stable, and a great place to invest in? Keep in mind you will still want to have the interiors of the unit inspected (part B) as this will be where you tell the condition of your units interiors. The appliances, the mechanicals if any, the seals in the shower, the plugs on the wall that should be changed to GFI, etc. All interiors are often your responsibility which you can find out what is your responsibility and what is the condo corps responsibilities by looking in your bylaws. The building health and financials, all that information is located within the condo documents and will be a key deciding factor of your purchase and this partnership!
Feel free to reach out with any questions you have!
Comments:
Post Your Comment: