(Photo credit: Ken Lund/Flickr)
More and more condos are cropping up in Canada’s housing market as urban sprawl affects many people’s quality of living.
In Toronto, there’s a record number of towers being built in a bid to allow more people to live near the city.
For someone looking to invest into a downtown property, a condo might be the perfect spot to live or buy and rent, but there are some differences homebuyers need to know before purchasing.
What do you own?
When you buy a condo, typically you’re buying the unit itself. There are common areas such as a gym, pool, elevator or lobbies, but these are all shared spaces that you share ownership with the other residents in the building. There are other sections of the condo that you do pay for with the unit including a locker, a parking spot or a balcony.
When you buy a unit the first step is to look into what exactly it is you will own. This helps you figure out what parts your responsible for and what parts the condo corporation is responsible for, such as the window washing of your unit, functioning fire alarms or a lawn area.
Some condos are freehold condominiums, which means that the owner owns the unit, along with the land it’s on. This also means they’re responsible for the land’s upkeep, such as the roof or driveway, but they also pay fees for the common elements too.
What do you pay for?
The homeowner of a condo pays their mortgage and closing costs, but they also pay monthly condo fees. These fees cover the cost of repairing the common areas with a portion of it going into a reserve fund for the condo. Condo fees can also cover the cost of utilities, water and hydro.
The amount of condo fees paid can vary year over year and how money is spent is decided by the condo board.
One aspect to keep note of is that while condo owners pay the same municipal taxes as houseowners, they don’t always receive the same services. For example, condominiums can be considered a private community and in that case, they may not receive the same services such as snow plowing or garbage removal. Before purchasing a condo, you should inquire about what services the condo receives and what services are handled by third party contractors.
Condo governance
Since you’re living in closer proximity with your neighbours in a condo, the condominium has bylaws that residents need to abide by.
Some of the rules revolve around pets, which can go as far as specifying what size pets you’re allowed, noise at night and parking matters. Some bylaws can go further and include other factors such as balcony use or smoking.
When you buy a condo, you can vote at general meetings on issues in regards to the condo and you can also help elect who sits on the condo board, which is made up of different condo owners. It’s in your best interest to be involved in the condo community since if something such as a repair is needed, you, along with other condo owners will be on the hook for any extra condo fees.
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