Continued from Buying a Condo Part II……
Parking for your vehicles.
Your parking stall(s) may be dealt with in 2 different ways, from a use and ownership standpoint.
1) Titled Most common in newer complexes, this means you own the space, whether above ground or in an underground parkade. It will have a separate tax bill and condo fee that will need to be paid. Usually maintained by the association along with every other owner in the complex.
2) Assigned Common in older buildings, especially ‘conversions'(usually an older rental that has been converted into a condominium and sold off as individual units). You do not own the space, but it is exclusive use common property. Property commonly owned by the association, but only you can use it, like a balcony. It will be likely maintained by the association as well. Lawyers don’t like this because it can be challenged at a later date and changed against your wishes. This is relatively rare, but it has happened.
Finally, done with all the technical explanations, it’s time to go shopping!
Should you purchase an existing re-sale or brand new?
As discussed in an earlier edition of this series, this is both an economic and lifestyle choice. Sometimes where you want to live may have no or limited options. Currently in the Edmonton area, existing apartment condominium inventory is typically somewhat cheaper than new because of supply and demand. Too many multi-family buildings have been constructed in the last 8-10 years creating a significant oversupply. This has created competition which has pushed the prices down (especially in the high rise and walk-up apartment styles). The exception is the townhouse or rowhouse, which currently offer fairly competitive product and pricing.
Re-sale or existing condos….
Take a look at what is available in the area you are interested in, and let’s say you find a nice, 10 year old, 1000 sq. ft. 2 bathroom, apartment style property, with a decent location that works for you. The complex seems Ok and the price is cheaper than new and you decide to make an offer.
When you make an offer on a condo, it is generally contingent on 2 or 3 things,
1)Financing is the same as single family dwellings; you are approved but the lender you are using will independently look at the price you are paying to make sure they are not lending over market value.
2) Review and approval of condo documents is really where the difference is. This is the most important part of the research required to make a good decision. When the offer is made, the buyer will receive a ‘condo package’ than contains current financial data, minutes of the last year or two’s meetings, the reserve fund study and the bylaws. The review can be done by the buyer, the buyers lawyer, or a company that is hired specifically to review these documents for a purchaser. The lender may also ask for theses documents as part of their risk assessment. This will (hopefully) reveal the mechanical, financial and administrative health of the building and corporation. It also gives you a good idea if you are at risk of an imminent special assessment or condo fee increase. In short, you are not buying into a problem.
3) Inspection of the unit is always a good idea, but may or may not seem cost-effective depending on the type of property. With an apartment, whether high-rise or low-rise you, own from the walls in, so most of the major systems are shared and therefore will be the responsibility of the association to maintain and repair. Townhome style will have systems like a single detached home or duplex, and should definitely be inspected for defects and maintenance issues.
When you have satisfied yourself that you can afford the unit, it’s in acceptable physical condition and the documents are in order…. you waive these conditions and you have purchased your new home!
Next issue…. Buying a new construction Condominium.