Congratulations, you’ve decided to buy a home in Ontario! While this is an exciting time, there are many important considerations to keep in mind, especially if you’re considering purchasing a condo.
With shared spaces, rules and regulations, and financial considerations unique to the world of condos, it’s important to be well-informed before making any decisions.
Luckily, Stratastic has compiled this Quick Guide for you, starting with our 5 Top Tips (including definitions for key terms)!
Tip #1: Know the difference between a condo and a house.
Unlike purchasing a regular house, when buying a condo, you are purchasing a unit within a shared building or complex. This means that you will share common spaces, such as hallways, elevators, and amenities, with other condo owners. It's important to research the condo's rules, regulations, and fees, as they may vary significantly from those associated with buying a house.
Condo: A condo is a type of property where you own a unit within a larger building or complex. This means that you share certain spaces, like hallways, elevators, and amenities, with other condo owners. Buying a condo is different from buying a house because you don't own the entire property, just a specific unit within it.
House: A house is a standalone property that you own entirely. It can be occupied by a single family or individual, and typically doesn't have shared spaces or amenities like a condo does.
Tip #2: Request the corporation’s Status Certificate.
In Ontario, a Status Certificate is a legal document that provides important information about a condo unit and its corresponding corporation. It typically includes details such as the current financial status of the condo corporation, any outstanding fees or special assessments, legal disputes involving the corporation, insurance coverage, and the condo's rules and regulations. It also provides a copy of the condo's declaration, by-laws, and rules.
The Status Certificate is an essential document for anyone interested in buying or selling a condo unit in Ontario, as it can help potential buyers make informed decisions about their investment.
Condo Corporation: A condo corporation is a governing body that oversees the management and maintenance of the condo property. They are responsible for making sure that the common areas and facilities are maintained, and that everyone follows the rules and regulations.
Tip #3: Understand the condo's financial health, as well as the condo fees and what they cover.
When purchasing a condo, it's essential to know the financial health of the corporation. This includes reviewing the condo's budget, reserve fund, and the condo corporation's financial statements. A well-maintained reserve fund is important to ensure that the condo corporation can afford major repairs and maintenance, which can impact your condo fees and the value of your investment.
Condo fees are a monthly cost that covers the maintenance, repair, and management of common areas, as well as any shared amenities. It's important to review the condo fees carefully and understand what they cover, as well as how they may change in the future. High condo fees may also affect your budget and affordability.
Reserve Fund: A reserve fund is a savings account that the condo corporation sets up to cover any unexpected expenses or major repairs that may be needed. It's important for the condo corporation to have a well-maintained reserve fund, as major repairs can be costly and impact everyone's condo fees.
Condo Fees: Condo fees are a monthly cost that covers the maintenance, repair, and management of common areas, as well as any shared amenities. These fees can vary depending on the condo property and what's included in the fee.
Tip #4: Review the condo's insurance policy.
The condo corporation typically has an insurance policy that covers the building's structure, common areas, and liability. However, it's important to review the policy and understand what it covers, as well as any exclusions or limitations. Additionally, you will likely need to purchase additional insurance coverage for your unit and personal belongings.
Insurance Policy: An insurance policy is an agreement between the policyholder (you) and the insurer (the insurance company). The policy provides financial protection against certain risks or events, like damage to your property or liability for injuries that occur on your property.
Liability: Liability refers to legal responsibility for damages or losses incurred by others. For example, if someone slips and falls in a common area of the condo property and sues the condo corporation, the liability would fall on the condo corporation.
Exclusions: Exclusions are situations or items that are not covered by an insurance policy. It's important to understand what's excluded from your insurance policy so that you can purchase additional coverage if needed.
Tip #5: Research the property management company.
As agents of the condo board (or board of directors), the property management company plays a crucial role in maintaining the condo's condition and financial health. Before purchasing a condo, research the management company's history and reputation to ensure that they are capable and experienced in managing the condo's affairs.
Property Management Company: A property management company is responsible for managing and maintaining the condo property on behalf of the condo corporation. They may handle tasks like maintenance, repairs, and cleaning of the common areas, as well as collecting condo fees and communicating with the condo board.
Condo Board: The condo board is a group of individuals elected by the condo owners to oversee the operations of the condo corporation. They are responsible for making decisions about the condo property, enforcing the rules and regulations, and managing the finances.
Buying a home is a big decision, and now you know why buying a condo comes with unique considerations. By following Stratastic’s Quick Guide, you’ll be well-prepared to make an informed decision that helps you avoid unpleasant surprises down the road so you can be happy in your new home for years to come.
If you'd like to stay on top of everything condo, you should also consider joining Stratastic (it's free!). We'll help you navigate Condoland with ease to help you settle into your new home and condo community!
Wherever you decide to call home, we congratulate you on the next exciting chapter of your life!
Tags: homebuying, condo, real estate, Ontario, Status Certificate, financial health, property management, insurance policy, liability, exclusion, condo fees, reserve fund, condo board, shared spaces, rules and regulations, amenities, investment, budget, affordability, decision-making.