I have a confession to make. Until recently, there was a whole lot I didn’t know about condos.
Don’t get me wrong: when it came to buying and selling, I had the process down cold. And when it was time to purchase my own investment unit, I knew exactly what to look for to maximize my return. But with regards to the basics—what defines a condo, how the day-to-day operations work, that kind of thing—I had a lot to learn.
Long story short, I joined my condo board to keep tabs on my investment. Of course, I also realized it was a great opportunity to learn how buildings are run from behind the scenes. I made it my mission to learn as much as I could about this unique type of housing—and even took a series of Board of Director courses! Now, I want to pass my knowledge onto you. If you’re thinking of buying a condo, here’s what you need to know.
What is a condo?
It seems like a simple question, but the answer may not be what you’re expecting. First off, the term “condominium” refers to a type of ownership—not a building. Technically, a condo could be a low-rise, semi-detached, townhouse, duplex…the list goes on. Basically, if it contains multiple units and common areas—and adheres to the unique governance and fee structures associated with a condo—it fits the definition. I have a lot more to say about that, so read on!
The parts of a condo
Let’s start by jumping into some definitions. First off, a “unit” is a living space that’s owned individually. It’s your kitchen, your bedrooms, your bathrooms—all of those areas that lie behind your front door. In contrast, “common areas” are shared. I’m talking about spaces like lobbies, elevators, hallways, and parking garages.
Last but not least, we have exclusive-use common elements. These include areas that individual condo owners don’t own outright, though they alone have the right to use them. Balconies, terraces, ground floor patios, and storage lockers often fall into this category. On a (somewhat) related note, I was delighted to learn that in many buildings, there are dedicated places to store items like wine and soppressata (an Italian salami that everyone needs to try). Talk about thinking outside the box when it comes to amenities! Clearly, developers have started to realize just how much these little extras can mean to potential buyers.
Why a condo?
Now that you know what a condo is, let me tell you why buyers fall in love with them.
First off, in comparison to houses, condos provide a more affordable and low-maintenance lifestyle. Building repairs and maintenance are taken care of by a condo corporation, which means no shovelling snow or paying to fix the roof if it starts leaking! Of course, every building has its own rules about which repairs unit owners are responsible for. But on the whole, you’ll enjoy a lot less hassle if you’re living in a condo than you would in a detached home.
Many buildings also offer impressive amenities. I’m talking luxurious pools, high-tech gym facilities, party rooms, and even affordable guest suites (perfect for owners who have friends and family in town).
Last but certainly not least, condos can provide a real sense of community. If you’re retired, you might want to look at a building that offers organized activities and trips to grocery stores, medical offices, and even local casinos! These bonuses are ultra-convenient for seniors who don’t drive, and they provide opportunities to socialize. In contrast, a development that caters to millennials might have a shared rooftop terrace, lounge areas, workspaces, yoga studios, and a high-end gym.
As a result of the convenience, affordability, and little perks they offer, condos hold a ton of appeal—and not just for retirees and young professionals. More and more, families are being enticed by these benefits too!
The nuts and bolts of ownership
Are you with me so far? Good. Now, let’s delve into the nitty-gritty of condo ownership.
Every unit owner has to pay monthly condo fees, which cover the cost of maintaining their building’s common elements and shared amenities. As a reminder, everything from your elevators and lobby to your pool and gym facilities fall into this category. Whether or not you use the amenities, you’ll be responsible for paying your share!
In addition to general upkeep, condo fees may go towards things like utilities and insurance. A portion will also be placed in a reserve fund which will pay for any major building repairs and replacements that pop up in the future.
Unfortunately, many condo owners don’t have a clear understanding of how their development is run. That’s too bad, because it’s not as complicated as some people think!
Once a building has been built and registered, the unit owners will elect a board of directors. The board plays a very important role in how a condo operates (though the day-to-day stuff is usually taken care of by a management company). The actions of its members will be governed by a crucial set of documents. Here’s some of the information it contains.
Put simply, a condo’s declaration defines the property—including how its units will be used, their boundaries, what constitutes its common (and exclusive use) elements, and crucial info on maintenance fees. It’s created by the developer’s legal team.
Your declaration will tell you exactly what’s included in the purchase of a unit. So if you’re wondering if your storage locker is truly yours—or if it’s an exclusive-use common element—this is where you’ll find out. If it’s the latter, the declaration will tell you who’s responsible for repairing it—you, the condo corporation, or both.
A condominium’s bylaws are laid out by its developer’s legal team. They guide the condo corporation in managing the property, its assets, and its day-to-day operations. In the bylaws, you’ll find info about how the board of directors is elected, how maintenance fees are collected, and the process for approving and amending rules and bylaws.
Condo rules typically apply to issues like pets, noise, parking, and how amenities can be used. If you’re wondering how late you can play your guitar or how many guests you can have over to use the pool, the rules will tell you.
Here’s where your input as a unit owner really matters. While the developer’s lawyers set down the rules initially, the board can modify them later on. They’re both approved and amended through a vote by members (that means you).
Of course, you should review a building’s declaration, bylaws, and rules before you commit to purchasing a condo! Every unit comes with a document known as a status certificate, which includes everything I’ve described above. Make sure you (and your lawyer) take a close look at it before you buy.
Should you get insurance?
A quick word on condo insurance. If you buy a unit, coverage will be included—but it will be limited. Many unit owners also choose to buy their own insurance. Going this route will help ensure that the contents of your condo—and any improvements you make to your property—are protected. Be sure to ask what’s covered by your condo corporation before buying a unit.
There you have it! The basics of living in a condo. It has its perks, to be sure. But one of the keys to a successful purchase is understanding your rights, your responsibilities, and how developments are run. The other is making sure you find a unit that’s absolutely perfect for you—and that’s where an experienced real estate agent comes in handy. Not only will a professional with local expertise help you find a unit that meets your criteria, they’ll make sure you’re as informed as possible about the reputation of any condo corporation and board of directors you consider dealing with. Happy hunting!
If you’re ready to find your dream condo, I’d love to take a few minutes and talk. Whether you have questions or are ready to take the first step, I’m here. Give me a call at 416-550-7555 or reach out at Lisa@LisaSinopoli.com.