Many buyers choose to purchase a condominium, as opposed to another type of home, for the pure simplicity of living. Advantages include; less maintenance, increased security, a collective approach to building management, a worry-free ability to travel, etc. That being said, there are a number of factors to consider prior to the purchase of a condo.
The quality of the management of the condo association is something that must be verified before a purchase. Said management is either delegated to a third party company or is handled by an elected group of building residents. It is important to review a document created by the condo association called a “Declaration of Co-Ownership.” This document will have all the rules and regulations pertaining to building management, use of the condo, use of common spaces, etc. Also found in the Declaration will be any restrictions with regards to pets, BBQs, number of visitors allowed in common areas, amongst others. It is important to consult the Declaration to see if the condo regulations fit your style of living.
It is also important to review the minutes from the condo association’s Annual General Meetings. These minutes give a general overview of yearly happenings as well as any upcoming projects. Also reviewed are expenses incurred for any repairs, projected expenses, an evaluation of the physical state of the building, important renovations to come, relationships between co-owners, etc.
The financial statements and budget published by the condo association paints an up-to-date picture of the building financial health and its ability to deal with any unforeseen expense. It is important to verify if the association is running a budgetary surplus or deficit from year to year. A condo association should maintain a financial balance equal to an amount that will cover all projected expenses over the course of 10 to 15 years. Should the financials not be healthy, it falls to the administrators of the co-ownership to decide how to adjust monthly condo fees, paid by co-owners, to an amount that will eradicate any deficit.
Almost any question with regard to a condominium property can be answered by a thorough consultation of the aforementioned condo documents. Additional queries should be directed towards the building management or seller. This research will ensure a fully educated buyer makes an informed and smart purchase.