If you are thinking about buying a condo you need to understand what you are buying and you need to consider the reasons that a condo is or isn’t a good purchase for you.
“ The bottom line about buying a condominium is there is much to know and most importantly you must pay your condo fees on time.”
Firstly, there are different types of condominiums which should be considered. There is the conventional type which is an apartment style condo where you will likely have a shared main entrance and shared hallways and possibly shared elevators. There will also be shared utilities. The second type is a townhome style where you will have your own entrance, minimal if any shared utilities. Lastly there is what is referred to as a bare land condominium. This is a situation similar to single family home where you own the home and the land but there may be portions of your property that is deemed “managed property” which means the Condo Corporation will pay for the repairs and maintenance of areas of “your” property.
All these types of condominiums require the buyer to understand what their condo fees will include and what expenses will be their own. It also requires that the buyer understand the bylaws and how property is governed within the Corporation.
So now you know about the different types of condos, let’s talk about the condo fees and what they include. Your condo fees will include all the items listed in the condo budget. The total budget is divided amongst the owners based on a measurement of Unit Entitlement which is a measurement that is based on the size of your unit. Most condos will have electricity and gas in the budget which is a shared cost and is for the common electricity and gas only. The units may also be separately metered which mean you pay for your own electricity and gas within your unit. There are some circumstances where there are no meters for the units and all electricity and gas, including the usage within the units is shared in the budget. The management company contract price is also included in the budget. Insurance is another cost that is inlaced in the budget but homeowners must understand that they need to insure what is inside the unit. The bylaws of the condo Corporation will outline what coverage the Corporation is responsible for. The condo owner should take a copy of the Corporations insurance and take it to an insurance provider that is familiar with condo insurance and they should be able to assist the condo owner in establishing the coverage needs for the unit. There are many other expenses included in the budget and you should familiarize yourself with those expenses. The fire safety issue is a good argument that ensures the safety of the owners but there are a number of issues that will need clarification before short term rentals or any rentals are restricted in Alberta. At the time of writing, the option for AB condo corporations is to propose a bylaw that prohibits short term rentals. A number of corporations have done this but to date the bylaw has not been tested in the Courts. It is yet to be seen if it will stand the test of justice.
The condo buyer should also know that should any disputes or conflicts arise that the condo owner is dissatisfied with, withholding condo fee payments is not an option for resolving disputes or demanding service. Condo fee payments are mandatory payments that must be paid to the Corporation on the first day of each month that the fees pertain to. Withholding condo fee payments has consequences that will affect the condo owner. The Corporation has recourse in order to collect delinquent fees such as sending a demand letter which carries a cost of about $300 and is the responsibility of the owner. The path of escalation from receiving a demand letter if fees are not brought current is a lien which can be registered on the title of the unit by the Corporation which means if the unit is refinanced or sold, the amount owing to the Corporation is paid first before all other claimants including the mortgage. The impact to the condo owner is that your credit rating will be affected as long as there is a lien on the title to your property.
The bottom line about buying a condominium is there is much to know and most importantly you must pay your condo fees on time.