condominiums: a form of Ownership – not a Building Style!
Condominium Corporations are governed by the Condominium Act of Alberta – which requires that each Condominium have bylaws registered at the Land Titles Office. These bylaws direct how the Condo corporation will run and the 'rules' for the behaviour of the owners. A Condo Board must be elected from the owners, is responsible to them, and must always act in their best interest. Often, the board will hire a professional Property Management Company to advise them and provide management of the day to day operations.
In addition to paying the costs associated with your unit (e.g. taxes, power, TV and internet) owners also pay monthly condominium fees. These fees cover the operating costs of the common property - insurance, utilities, janitor, repairs and maintenance, snow removal, landscaping maintenance and contributions to the reserve fund. Condo Fees are based on the budget, which the Board creates and adopts. Some condos may require the Board to also have the owners vote on the budget at the AGM, but this is very rare.
A portion of your monthly condominium fees will be deposited into a reserve fund, a savings account to cover the estimated cost of future maintenance and repairs. A reserve fund study must be completed every 5 years; it involves a detailed examination of all components of the building and provides an analysis of future repairs and maintenance; applying an inflation factor to calculate and ensure the reserve fund has sufficient funds when those repairs are required.
How can you be a responsible condo owner? Attend general meetings and information sessions, serve on the board of directors or on a committee and vote! It’s also important to read the minutes of meetings and other information sent to members, such as the condo newsletter, as well as the corporation’s budget and financial statements. Embrace being part of a community with shared responsibilities!
When purchasing a condo, you must review the Condo documents. These documents can include bylaws, financial statements, budget, minutes of board meetings, reserve fund study, reserve fund plan, condo plan, minutes of AGM, management agreements, insurance policies and condo fee schedules.
Your review of the condo documents is a critical piece of the purchase process. Those documents can seem overwhelming and confusing, but they tell a very complete story about your potential new home. You can try to interpret those documents yourself or hire a condominium document inspection company to go through the documents very thoroughly and provide you with a written report identifying potential concerns. Be sure to ask questions if you have any!
Let’s BUST some common Condo Myths!
Myth #1 -Condo fees are expensive and a waste of money.
Condo fees have some excellent benefits. For example, condo fees typically cover insurance. Condo associations are usually required to ensure all the common property and the unit structures (owners obtain their own coverage for liability and personal possessions). Since the condo association is essentially buying insurance coverage in bulk, the overall cost is better than insuring each unit individually, thus you are saving overall on insurance costs.
The best way to determine if condo fees are reasonable is by a thorough analysis of the condominium documents. The state of these fees can be an important indicator if your largest investment is being properly taken care of!
Myth #2 -All condominiums leak, resulting in 'cash calls'.
Fact: Water is very invasive and will get into the tiniest cracks and if left unchecked can cause mould and rot over the years - in any type of structure. When Boards and Property Managers notice the warning signs and properly maintain their buildings, there should be no cause for concern. Most buildings that have been repaired have detailed records and/or engineer’s reports describing the repairs, clearing the building for residents.
Myth #3 –The property manager controls the building.
Myth #4 –Condo living requires NO maintenance.
Myth #5 –There are strict rules when living in a condo.
Fact: At first glance, condominium corporations may seem overly strict, however, the rules are in place to protect the majority of residents. Owners can request bylaw changes by putting forth their ideas for consideration.
Myth #6 –Condominiums are for senior living communities.
Myth #8 –No pets allowed.
Fact: Some condos allow pets; however, they must be well-behaved. Be sure to check into bylaws or investigate the rules and regulations before purchasing!
Moving into a condo, like any other new experience can come with its challenges. Often, new owners are not used to having neighbours or rules in regard to what they can and can't do in their home. It can take time to get to know the neighbours and feel like you fit in, the same as moving into a new neighbourhood.There are several advantages to selecting a building where you already know a resident; if you are interested in buying in a building where you don’t know anyone, ask your Realtor® if they have any clients in the building you can speak to, or ask your Realtor® to arrange a meeting with someone from the building’s social committee or the resident manager.
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