Condos have 3x the questions

Condominium homes are three times more complex than non-condo homes. A condominium comes with financial and political structures, as well as the physical home.

Because there is three times the complexity of a house on a lot, condo buyers should triple their knowledge before shopping, and rely on realtors who have specialized condominium knowledge and market awareness.

Let’s look at the additional issues we need to consider in condominium homes.

Realize that every condominium home is part of a corporation. That corporation may be well run and well-funded or be rudderless and virtually bankrupt. It may also own driveways, sidewalks, parking lots, extensive interior common property, mechanical systems, foundations, elevators, boilers and roofs. Any of these components may be new, aging gracefully or downright decrepit. There should be a professional assessment of those corporate assets (“reserve fund study”), and a savings account to fund, in whole or in part, their eventual replacement.

Obviously, then, the condo corporation needs to be analyzed prior to a final commitment to purchase a condominium home. From the operating budget to the audited financial statement, and from the current state of mechanical systems to plans for its repair and replacement, the corporation’s assets need to be evaluated, and their condition all affect the market value of the individual condominium home.

Yet a corporation brings with it still another set of questions under the heading of politics. Every condominium corporation has a government not much different in law than a city council. And as we all know, we can be governed well or poorly, and even the tiniest village can be peaceful or suffer “trouble in paradise”.

Minutes of condo board meetings, annual general meetings and special general meetings can all reveal whether a condominium is united and well led or divided and poorly run.

The complexity of a condominium provides the foundation to have an elected board and a paid manager deal with issues of maintenance that you might rather ignore. Fifty or 150 homes under one roof also means we can afford to live downtown, or riverside, where otherwise only millionaires would reside. Many of our neighbours in condominium communities become our friends in a pleasant semi-communal environment.

Be aware of a condo’s complexity, not intimidated. A house is a house: Understand the location, have it inspected, and you’re pretty well-protected. In a condominium you have the “house”, but also a corporation with assets and a political animal you’ll want to know before adopting it. Be as informed as possible, and rely on professional advice beyond that.

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