I’ve been a condo owner for the majority of the time I’ve been a homeowner. It’s not for everyone, but if you want to lock the door and leave, not worry about the garden getting overgrown, or the snow getting shovelled, then it might be the right type of home ownership for you. But there is more to condo ownership than just the space you live in, and it’s important to understand what you are buying into. Whether you’re shopping for a townhouse or apartment style condominium, you are not only looking at the space you live in, but also the Condominium Corporation that runs the property, because as an owner you are a shareholder in that corporation.
What’s in a condo fee?
Every condo owner is responsible for paying a monthly fee, which consists of a share of the operating expenses for the building or complex, and a contribution to the corporation’s reserve fund. The reserve fund is a big savings account where money is held to fund future expenditures when equipment and systems reach the end of their life cycle and need to be replaced. Your proportionate share is based on the square footage of your suite or townhouse, along with any parking spaces or storage lockers that may also be owned with the suite.
When shopping for your condo it’s key to look at what’s included in the monthly fee, so you can compare apples to apples. Generally corporations include building insurance and common elements maintenance in their operating expenses, but from there what is included can vary greatly. Fees can also include some or all of your utilities, property management, security, cleaners, and additional facilities that you have access to. Generally speaking, the lower the fee, the less that is covered.
Who’s managing your money?
You’ve found a great suite or townhouse. As an owner, shareholder, and financial contributor, you want to know when you purchase, that the corporation is well managed and properly funded.
Every condo corporation is managed by a volunteer board of directors who have been voted in by owners at the corporation’s annual general meeting, and in most cases they are aided by a professional property management company. They are responsible for setting the budget, and managing expenditures.
When you purchase a condo, you can include a condition in your offer that allows you and your lawyer to review what’s called a status certificate, before you’re completely locked in – and you should! This is to give you a snap shot of the corporation’s financial health. Your lawyer will read this, but you should too, and be prepared to discuss any questions with your lawyer, so they can follow-up with the property manager for more information.
Rules, Rules, Rules
The board of directors is also responsible for enforcing the declaration, by-laws and rules of the condo corporation. These are the governing documents for the condo corporation and are also included with the status certificate. While some of these documents contain a fair bit of legal jargon it’s important for you to read ALL of them and discuss anything you don’t understand with your lawyer, because these are the rules that you will be expected to live by when residing in the building or complex, and also outline what is your responsibility as an owner versus what is the responsibility of the corporation.
You Have a Vote
As a condo owner you have a vote. Your corporation will hold an annual general meeting each year where you can vote on various matters, including who is on your board of directors. Many boards will hold several other meetings throughout the year, to keep you informed, get your input, answer your questions, and present opportunities for you to vote and have your say. Stay in tune with what is going on in your community by attending these meetings. You’ve made a financial investment in your community, so give feedback and suggestions to your board as well.