McClelland Minute - November 8, 2009

To Condo or Not?

Condominiums serve as a great option for people with certain lifestyle goals in mind.  People my age, the empty nesters, find them a good way to afford a home in two different settings – one here as a base, and another at the lake or in the sun belt of Arizona, California or Florida.  Single people who are seeking more freedom to decorate and quality of life than an apartment offers.  Or first time home buyers striving to build equity as a stepping stone to a larger house and yard.

What condo buyers need to be alert to is that with title to the unit also comes a responsibility to share in the stewardship of the entire complex.  How well the whole structure and grounds are managed, both day to day, and in the long term will ultimately impact on the value of the investment you are making and your peace of mind.

Realtors working with condo buyers will ask the seller to provide as a condition of any offer made a number of documents from the condominium corporation.  Once received, I recommend that the buyer take them to his or her lawyer and review them thoroughly together.

It is important to understand how your monthly condo fee will be used – what services are provided within the budget, in particular how much the structure is insured for and what is being set aside in a capital replacement reserve fund to offset one time costs of re-shingling the roof or paving the parking lot.  There are complexes in Lloydminster where the unit-holders voted to hire someone to mow the lawn during the summer but have eliminated snow removal services, thereby putting the responsibility back on the individual unit owner to clean their own driveway and sidewalk.

Review the bylaws of the corporation and the minutes of the board for the last twelve months to see if there is anything that will restrict or deny your enjoyment of the property.  Again, don’t make any assumptions.  In one complex they don’t allow new owners to have pets, while grandfathering those residents who already have a cat or dog.  Imagine viewing the property and observing several animals out and about; naturally you may make the assumption that you too can have a cat … wrong!

Recently we were working with a prospective buyer on a unit that was advertised to have two parking stalls.  It did, but only one was electrified.  The second was at a considerable distance from the entrance.  If there are two of you sharing accommodation this could be a considerable source of tension in our western Canadian winters!  The seller of a unit in another complex advertised access to a common recreation room.  We viewed the area and it was inadequately lit, poorly ventilated, and contained two exercise bikes, one of which did not work.  As in all things, buyers of condos must be aware!

Vern McClelland is associate broker with RE/MAX of Lloydminster.  If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

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