Anyone who wishes to buy a condo should analyze these two issues very carefully before taking action: the monthly fees, and the general condition of the building, including the private and the common spaces. Need advice?
Before looking at the monthly fees, let us review the importance of the condo inspection. Many of us believe it is useless to have a condo unit inspected since it is more like an apartment than a single house. Plus, no one has an apartment inspected before renting it. Bad idea!
Specialists in the field know all too well that it is best to have a condo inspected before buying it. Not only the private area but also the common grounds: hallways, staircases, exterior walls, roof, foundations, land, etc. Just like a home purchase, you can demand the right to have the condo inspected in your offer to purchase.
No building is immune to a construction defect. New buildings should also be inspected, although the chances of finding a defect are rather slim. Whenever possible, try finding an inspector recognized as a condominium expert.
Ask the inspector to show you his or her license or, at least, a written proof of his or her professional liability insurance. To make sure he or she is qualified, consult the following websites: the Ordre des architectes du Québec, the Ordre des ingénieurs du Québec and the Ordre des technologies professionnels du Québec. An inspector does not have to be a member of an order to practice, but he or she must perform the home inspection in accordance with the applicable rules and regulations. For example, he or she must provide a detailed report of the items that will be inspected. The OACIQ is very clear on this point.
Now, let us review the monthly fees! These pay for the building’s maintenance costs, from the snow removal to the insurance, including repairs and administration fees. These condo fees will eat up a large chunk of your budget. So, get the facts from the condo association.
In some cases, the fees can reach several hundreds of dollars if amenities include a swimming pool and a fitness centre to make the lives of the co-owners more enjoyable.
Most people’s first instinct is to choose a condominium with the lowest monthly fees. Beware! If the fees are low, maybe the emergency fund is almost empty. If major repairs are urgently needed, who will pay for them? You, of course.
Several criteria will determine the monthly payment: the state of the emergency fund, the age and size of the building, the services offered, etc. A responsible condo association should have a maintenance log that you can consult. Better still, if it provides you with a report conducted by valuation experts.
By law, a minimum of 5% of the common expenses must be deposited into the emergency fund to pay for unexpected major repairs. Most experts say this is insufficient.
You must know the emergency fund is at the heart of managing a co-ownership administration. A healthy emergency fund will ensure harmony between the co-owners and a steady budget for everyone. Keeping it low will generate conflicts and unexpected expenses in the months and years to come.
Major repairs of the condo building are currently under way. One of the objectives is to clearly define the rules in terms of maintenance costs and emergency funds. That remains to be seen.
In the meantime, you can count on your real-estate broker to find out more.