Before You Sign: The Condo Buying Checklist

Thinking of buying a condo, townhouse or other strata-based home? There’s plenty to think about, from reserve funds to house rules to joining the board. Here are the crucial considerations before you sign on the dotted line.

New or Resale?

There are important differences between a new or resale unit. With a new unit, you’ll want to ask about warranties of appliances and features, the proposed budget, other planned construction in the area, and what tax benefits will be available. With a resale unit, you’ll want to review the reserve fund study, meeting minutes of the board, uncover existing issues, and consider what planned replacements or improvements might be needed.

Documents to Review

It’s important to know what you’re getting into. Requesting documents (in writing) from the builder, the management, or the condo corporation will give you the background you need to make an informed decision.

Here’s what to ask for:

• Corporation bylaws
• Registered condo plan
• Most recent financial statements
• Budget
• Condo or homeowner fee chart
• Minutes for the most recent AGM and condo board meetings
• Insurance certificate
• Reserve fund study/report
• Structural deficiencies or studies, especially post-tension cables
• Legal judgments or actions
• Management contracts
• Summary of deficiencies (if it’s a new building)

What do you do with the Documents?

Once you have the paperwork, it’s important to have it reviewed by an expert. There are plenty of local condo review professionals online, or you can ask your realtor or lawyer for a referral. The biggest things to consider are:

• Legal disputes or pending lawsuits
• Reserve funds and adequate financial position
• Special assessments
• Bylaws that impact daily life, like pets, noise restrictions, and balcony contents
• Post tension cables
• Appropriateness of condo fees
• Insurance coverage

The Condo Board

Condo boards are traditionally made up of owners who manage finances, common area maintenance, repairs, and uphold the bylaws. Once a year, they will hold an annual general meeting, and often open the board for election or new board members to join.

If you’re buying, you may want to consider joining the board as you will have a say in building management, making improvements to the operations, and even help you get to know the other residents. It’s not for everyone, but you will get an inside look at building operations.

Provincial Differences

Not every province is the same! Here’s a guide that explains what each province requires.

Inspect, Inspect, Inspect

As with any home, you’ll also want to do a physical inspection. In addition to flushing the toilets and turning on the lights inside the unit, you’ll need to inspect the common areas like stairways, the yard, railings, garbage and recycling and any building amenities.

Remember that any amenities need upkeep – so you may like to have a pool or an elevator, but know it costs money, takes maintenance and will potentially result in big expenses. It also means more documents and inspections before you finalize your purchase.

Overall, there’s plenty to consider when buying a condo. Don’t be afraid to ask for help – you have plenty of support behind you and, as your mortgage professional, I want you to be absolutely confident in your purchase and financial decisions.