You are a young, successful professional and you’re buying your very first condo! Or your kids have moved out, you’re selling your home, and downsizing to a condo. How do you know if it’s the right one for you? It’s in the perfect location, with a good layout, high-end appliances, and a parking stall. What more do you need to know?
When you find the one you love, don’t jump in before doing your due diligence. You want to make sure you’re using your hard earned money to buy a good quality condo.
Here is a great list of things to consider before finalizing your purchase. This list is not exhaustive but will help you get started on the right foot:
- Is the building 100% rain screened, if older than 1999? You have heard the phrase “leaky condo.” Home buyer beware!
- Has there been a recent building envelope assessment? The building envelope is what separates the interior and the exterior of a building. This assessment will determine whether there are any issues with water entering through any part of the building, from top to bottom.
- Is this a new building? If so, will you be required to pay occupancy fees to the developer for the period of time between your occupancy and when you take ownership of the unit?
- Can you get strata minutes for the past 3 to 5 years? Receiving documents for the last two years is the bare minimum to acquire from your Realtor. These may not provide you with an adequate scope of the building’s overall condition. You could be missing some pertinent strata activity that may have occurred in prior years that would sway your decision on purchasing the property. Find out what the common complaints are and whether they were addressed, as well as how quickly the board arrived at a solution. Check to see if there is a history of the condo association making one-time assessments to cover large repairs like a new roof, instead of managing the funds they receive on a monthly basis to anticipate these types of needs.
- Is there a new home warranty in place? If so, find out what applies to you in the 2-5-10 new home warranty.
- Is there a rental restriction? How many owner occupied versus rented units are in the complex?
- What type of security is in place on the property? Is there a monitored alarm service, or a concierge?
- How much storage is available? Most condos have minimal in unit storage, so check the size and accessibility of your storage locker to make sure you can accommodate things like luggage, and larger sporting or recreational equipment.
- Are there décor restrictions on the building made by the strata and if so what are they? Many condo boards limit and restrict the amount of work and type of renovations and décor decisions you can make.
- Does your building allow pets? If so, are there any restrictions to the number of pets or their size?
- Research the neighbourhood. What type of development will be taking place in the coming years and how will it affect your access to parking, new business, and your view.
- Check out your buildings reputation. How quickly do units resell in comparison to other buildings in the area, and how does it compare to current market value. If there is a big discrepancy, there is probably a good reason.
- Know the building demographic. What age bracket or type of person it is geared for? Does it match the type of lifestyle you are looking for?
In addition to this list, it never hurts to have an inspection done by a professional inspector. Find out about any potential problems before you sign on the dotted line. To make sure you’ve found your dream condo, and not a nightmare, do your due diligence.
Finally, you would also want to review and discover what the condo insurance actually covers. Make sure to get a copy in advance, so you can determine what sort of additional coverage you will need to purchase. In general, your contents are your responsibility, and there are usually deductibles on the building insurance that unit owners can be held responsible for. For example, in the event of an earthquake, the deductible on the insurance policy for the building, as it is generally quite high, would typically be split amongst all of the unit owners. Knowing which portion you are responsible can help you make educated decisions about the best policy you need to buy to protect yourself.
You will also want to confirm if any upgrades have been done to the unit beyond original construction, or above what the condominium corporation would define as a standard unit. These upgrades would be your responsibility to insure. For example, an upgrade from original carpet to laminate or hardwood flooring, if damaged by an insured loss, would need to be covered by your insurance or it would be an out of pocket expense. In some cases fixtures in your unit may also be your responsibility, things like countertops, cabinetry, glass windows, and sliding doors.
It’s always a good idea to review exactly what is covered by your buildings insurance and what is your responsibility as these additional coverages will generally increase the cost of your premium.
Hopefully this guide provides a starting point for considerations to make before your purchase, and as always, any other questions that you have can be discussed with your home insurance provider. For more information on insuring your new condo, contact Square One at 1.855.331.6933.