Qualifying a condo

Your clients are interested in buying a condo in a particular building/complex. Following are items to consider when you inspect the condo to ensure you can answer your clients’ questions and protect their interests.

1.  How well maintained are the common areas?

2.  How friendly, polite, and helpful is the concierge? You may also want to ask the concierge about of any problems with tenants, the building, etc., he/she may have experienced.

3.  What is the ratio of resident owners to tenants? Because resident owners have a stake in the condo, they are generally more active in the affairs of the condo and are more likely to ensure the condo is well maintained.

4.  What view does the condo have and is this likely to change? For example, the unit in the 30-floor condo building is located on the 2nd floor and faces east, overlooking an empty lot. This means that another building may be constructed on the empty lot some time in the future.

If a unit is in a high-rise, consider its location within the high-rise (i.e., floor level and exposure).

5.  What types of noise problems are there? This is determined by the unit’s proximity to the garbage chute, elevator machinery, air conditioning units/chillers.

6.  How much is the maintenance fee, and what is and is not included? Is the maintenance fee typical for this type of condo and the amenities? Condo fees are collected monthly from the owners of units to pay for expenses (e.g., insurance) and upkeep of the common elements (e.g., repairs, cleaning, replacement).

Fees vary from one condo to the next depending on what is included, what facilities are available to owners (e.g., exercise room, pool), and the total number of units in the building.To compare the relative cost of the monthly maintenance fees between units in two different condo buildings, consider what is included in terms of facilities and expenses, and break down the costs to a price per square foot.

7.  Does the owner of the unit own or have exclusive use of a locker and/or parking? If these are owned, there will be separate legal descriptions. If these are an exclusive use common element, this information should be detailed on the condo declaration. If these are assigned to a unit holder, the management office should be able to confirm all details, including the monthly cost.

8.  What is the financial position of the condo corporation? When was the last performance audit (reserve fund study) completed? Specifically, is the reserve fund sufficient to cover the cost of expected repairs or improvements necessary to maintain the condition, appeal, and value of the condo.

9.  Are there any pending changes to the rules, regulations, or special assessments? Many condo buildings have rules regarding pet. Special assessments can be levied against each condo unit, some being quite expensive and/or spread over several years.

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What else should be considered?

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Qualifying a condo