I was dealing with some clients looking at buying a condo this week, and I found myself explaining the differences between single family and condominium ownership. As we baby boomers age, this kind of ownership will increase in diversity and popularity.
I would like to try and clear up some of the confusion when people are trying to decide if ‘condo’ may be the right choice for them. Generally speaking, this is a lifestyle choice, not one of one being better value than the other.
Condominium (or Strata Title, in BC) refers to a type of ownership. These properties come in many styles; High and low rise apartments, townhomes, coach homes, row houses, bare land……
Purchasing a condo is similar to purchasing a single family home, with some very important differences. When you live in a condo, you are sharing ownership with a few (or many) other individuals. You own from the walls in, and share common property externally. The rules governing this common property are designed for co-operative decision making when addressing the collective good of the Condo Association.
In this multi-part blog I will dig deeper into the specifics of each element of condominium ownership and explain the most important issues relating to this type of Real Estate.
The Condo association refers to the collective group of owners in a condominiumised property. Once a building or set of buildings within this group are sold and occupied to 80%, the developer hands it over to the Condominium Corporation, which will now elect a ‘board’ from within the ranks of its owners to make decisions on their behalf . These decisions are typically regarding common property and financial issues. Decisions will require different levels of agreement (50/75/100%) by the owners depending on the type. Major financial issues usually require much higher levels of assent than property maintenance and annual management decisions. The board will usually have a representative from the management company hired to do the bidding of the association. They would be at all meetings and be the ‘go-to’ person for turning decisions into reality.
Condominium Corporation is the umbrella business that owns the common property. The owners may come and go, but the corporation(as defined in the Alberta condominium act) lives on. You, as an owner, own a portion of this corporation, and pay monthly ‘maintenance fees’ based upon that proportion. These are called ‘Unit Factors’ and the concept is; those who own a larger portion pay a larger fee. To figure out ‘unit factors’, simply multiply the square footage of your unit by 10,000 and divide by the total square footage of all units within the building. Your number of unit factors determines your proportional responsibility. However, you still get one vote, the same as every other owner(unless you own multiple units within the building) when making decisions. When you purchase, your unit factor amount will be part of the disclosure.
Common Property On the title of a condo you will find a ‘Plan’ number and a ‘unit’ number legally defining your specific dwelling. Common property has a plan number but is not assigned a unit number, that part of the complex is owned by the corporation. Examples of common property can be roadways, parking areas, paths, balconies, hallways, lobbies and exercise rooms (including equipment).
Exclusive Use Common Property consist of those parts of the common property that restricted to the use of a specific owner. Such as windows and doors , balconies, fenced yards, storage lockers, and parking stalls. General cleaning and small stuff is up to the user, but repairs and larger maintenance is the job of the condo association.
I will continue to cover most important aspects of condominium ownership in my next couple of blogs.