When it comes time to buy a home, more and more people are making the decision to buy condos instead of a freehold home. Condos can be a great option if they match up with a buyer’s lifestyle, but it is important to do your research and know the differences between a freehold home and condo before you make the final decision of which to purchase.
There are many different types of condos but they all have one thing in common: shared ownership of at least one common element. This element could be the building itself, in the case of an apartment building, or it could be a green space, private street, or an amenity like a pool. It is important that you do your research before buying a condo to understand exactly what you are buying.
When you purchase a condo, you will be required to pay a monthly condo fee to pay for the shared element along with the fees associated with managing the condo. Condo fees can vary dramatically between different condos depending on the shared elements. As a general rule, the more amenities and services a condo provides, the higher the condo fee.
Condos generally have their own set of bylaws which govern the entire condo. Some can be incredibly restrictive while others are very minimal. A person who has exclusive ownership of a home can do anything they want with the house or surrounding grounds, within the limits of local by-laws of course. Condo owners, on the other hand, are sometimes limited in the changes they are allowed to make to their property. This can range from simple restrictions on renovations that affect the home’s outside, to limitations on exterior decorations and even decorations that can be seen from the front windows, depending on how strict the rules are for an individual condo. These rules are set out by the condo association that oversees the condo, and are heavily dependent on the individual condo location. As shared owner of the condo and all that goes with it, each individual owner has a vote in decisions that affect all condos, but this rarely includes altering rules that have already been established.
Perks of Buying a Condo
- Amenities – Some condos offer exciting amenities such as pools, fitness rooms, and party rooms.
- Insurance – Most condo fees cover some form of insurance on your unit, whether an apartment or detached home. This will reduce your monthly personal insurance costs.
- Restrictions can be good – Depending on what you are looking for, restrictions can be a good thing as it keeps the neighbourhood looking cohesive and can restrict the likelihood of an “eye sore” appearing.
- Major Maintenance – Some condo fees include the maintenance of all exterior components of your unit including the roof, windows, siding, and bricks. These can be major expenses for home owners.
- Ongoing Maintenance – Some condo fees cover ongoing maintenance fees such as snow removal, lawn mowing and landscaping. This could leave you with more free time if you don’t have to take care of these things on a regular basis.
Before You Buy
Have you lawyer thoroughly examine the Status Certificate of the condo association. Make sure that they go over the following information with you:
- The financial status of the condo, including the reserve fund. Some condos are managed better than others. You want to ensure that the association has money in the bank to pay for repairs and incidentals because if they don’t, your fees may go up.
- The history of the condo fees. Have they been steady or been increasing rapidly?
- What your condo fees cover exactly. Have your lawyer review with you what the condo fees cover and what they do not. Do not make assumptions as all condos are different.
- Restrictions and condo bylaws.
Condos come with advantages and limitations, just as owning a freehold home does. The important thing is to do careful research and decide which option best fits your needs and lifestyle. When researching condos, be sure to look around at multiple locations, as the rules, fees, facilities and size of condos can vary greatly from one area to another. And don’t forget, a Realtor will be there to guide you through every step of the process.