Have you been thinking that condo living is appealing? Maybe you’re viewing it as a way to get your foot in the door in a tight housing market. On the other hand, perhaps you find the simplicity of condo living attractive - where snow removal, grounds maintenance and garbage disposal is taken care of for you. Whatever your reasons, living in a condominium has its pros and cons. Here’s what to consider.
How condos work
When you purchase a condo, you own the unit itself and, typically, one or more assigned parking spots. You’re responsible for the maintenance and upkeep of the apartment and are allowed to renovate the unit to upgrade your living space. This is where you need to be familiar with the particular rules governing your building, such as permissions that may be required for certain modifications.
Condo owners jointly own common areas and manage these through a corporation that’s governed by a condo board. The owners elect a board of directors at an annual general meeting. The corporation is responsible for maintaining the building’s exterior, common areas and the grounds. This encompasses cleaning hallways, stairwells and foyers, keeping laundry, garbage and bicycle storage rooms maintained as well as repairing balconies, walkways and parking lots. In managing the premises for the enjoyment of all owners, the association will contract with a property management company who may also employ an on-site superintendent.
Condo fees
Condominium buildings are divided into a large number of unit factors and each dwelling is assigned a number of unit factors based on the size of the apartment. This is used to assess value. Your condo fee corresponds to the percentage your unit represents of the overall value of your building. For example, if the value of your apartment equals 5% of the value of your building, then your condo fee will be 5% of the cost of maintaining the building, grounds and common areas. Fees also cover water and sewer and may include heat and hydro. The exception to this is that some townhouse condos will have their own water meters. Expect to pay higher condo fees if your building has more amenities like a pool or exercise room.
On an annual basis, the condo board reviews the expenses associated with maintaining the development and decides on any fee increases. The board keeps a reserve fund for major expenses. It’s critical to know that if an unforeseen expense comes along, such as a major roof repair, and the reserve fund is insufficient to cover it, each condo owner will be assessed an additional fee that year - and it could be substantial.
In summary
While condominiums are not for everyone, living in such a planned community can provide a sense of belonging in the neighbourhood and offer additional security and convenience. If you’d like to dig deeper into this type of home ownership, take a look at the CMHC Condominium Buyer's Guide.
When you decide to take the plunge, it’s critical to have a good Realtor on your side who can check on issues such as the status of the condominium corporation’s reserve fund. I’m more than happy to lend my expertise!
