What is the Standard Unit as per Condo documents?
Condo documents usually provide for a description of a standard condo unit. If the unit you are contemplating to buy is not the standard unit, i.e. it has been improved or walls have been removed, then you want to make sure that you understand what is and isn't covered as part of the insurance. It is not unsual for owners to convert 3 bedroom units to 2 bedroom units to allow themselves more room. So understanding this becomes important.
Get the scoop on the Reserve Fund
First, reserve funds requirements vary from province to province, so be sure to check what the provincial stipulations regarding the review of reserve funds are. In Ontario, it is mandated a condo has to undertake a Reserve Fund Study “periodically”, but this can be anywhere between 3-5 years. Make sure the reserve is proportionate to the age of the building – the general rule of thumb is to invest in condos that have a reserve fund comprised of 10% of their operating budget.
Who is the developer?
It should go without saying, but do due diligence on who’s building your condo. Hot markets bring several developers to the area to start setting up shop, but have they a reliable portfolio? What is condition of their existing inventory? Which contractors do they work with? The CMHC advises reviewing paperwork such as a disclosure statement, technical audit, and documents regarding bylaws and zones, etc.
Research the company’s financial and legal history
Take a look into the financial and legal history of the developer. Many major markets will have independent bodies that collect research on these kinds of statistics. TARION is a good source. Whether there are lawsuits between condo owner and developer, manufacturer, architect – it pays to get the facts to see what is being contended, and if it could wind up being a deal breaker.
Who manages the condo association?
The days of self-governing condo associations are fading as developments grow in size and scale. Many condo associations are opting for the help of a registered firm or individual to take care of issues such as budgeting, physical building maintenance and handling homeowner complaints. Knowing who takes care of these issues will help you gage how long it will take for them to be resolved.
What Does Master Insurance Cover?
A portion of monthly condo fees are put towards insurance for common areas, whilst individual homeowners can insure their own units and renters can opt for tenant insurance. Make sure to note which areas specially count as “common areas” and are therefore covered, and more importantly, which are not. Master Insurance policies can either be “Bare Walls-In”, which covers the physical property but not necessarily things like countertops and fixtures, or “All-In”, which covers installations as well as construction.
Jagdeep Singh, B. Arch.
Real Estate Broker
Direct Tel: 647-287-4644
Direct Fax: 866-450-9199
Formally educated as an Architect, Jagdeep Singh is Toronto REALTOR™ consulting on both resale real estate and new developments. Powerful Local Focus on Real Estate with a Global Perspective™
This post is for information purposes only. Though effort has been made to ensure the accuracy of the contents, the reader is advised to verify the information independently. This post may contain contain information that is privileged, confidential and exempt from disclosure under applicable law. The reader is not allowed to reproduce it in any medium without the author’s prior written permission. Jagdeep Singh is a broker with Century 21 Heritage Group Ltd., brokerage (416) 798-7133 which is independently owned and operated. This message is not intended to solicit parties currently under contract.