Condos are a popular form of property for many people looking to buy a home in Vancouver. They offer attractive, affordable convenient and secure accommodation and, as many are new, their state of the art technology and additional facilities are also very attractive to home-buyers. Condos in Vancouver are generally owned and managed under one of two systems – Strata ownership or Cooperative ownership. This type of ownership often comes with more limitations than owning freehold property and also, potentially, more costs. Before you make the decision to buy a condo in Vancouver (or anywhere else, for that matter) there are a number of important points to consider. In this quick guide we look at the top ten questions to ask before buying a condo in Vancouver.
Bylaws and Grandfather Clauses
Condos are governed by their own set of bylaws. You should always ask for a copy of these and double check that no “grandfather” clauses apply. These are old rules that have been superseded by new ones but may continue to apply in certain circumstances (usually where they were still in force when an issue was identified).
The Depreciation Report
Check the date of the last depreciation report; maintenance fees should be linked to the value of the building as a whole and should therefore reflect the age of the complex. Viewing a copy is also advisable, especially in older buildings. The report also identifies any upcoming work – general maintenance and also major repairs or work.
Engineering reports may be available on condo buildings, certainly they should be in the case of new condos and it's advisable to ask to view before buying any condo.
Strata cooperations are required to hold a contingency fund – ask how much this fund is currently worth and, importantly, how it is invested. If the fund is invested in magic beans you might want to avoid the condo purchase, however attractive the condo!
Buying Older Condos
If you're looking at older, established condo properties in Vancouver, ask for details of repairs made in the last decade. Take note in particular of major infrastructure repairs, including those to the fabric of the building or the internal infrastructure. Recent major repairs can be a plus, or the can be a sign of underlying problems.
Check if any recent assessments have been made that are not covered by general strata fees and ask what the cost of these was per unit. Special assessments may be required from time to time and you may need to pay towards these in addition to ongoing standard fees.
Although not an essential question you should consider asking how many units are owner occupied and how many are rental units. This will give you an idea of the make-up of the community in the building.
Have their been or are their any ongoing litigation cases affecting individual units or the complex. Given the complexity of ownership within condos there are many reasons why legal action may occur. Litigation cases should not put you off buying a specific condo – but it is worth knowing about and taking legal advice before making your final decision.
Ask what is the individual unit's deductible? The strata as a whole will have insurance for major incidents (usually fire, flood and earthquake cover). As with standard policies there will be a deductible amount on the policy. This is generally shared between all units in the building but may vary depending on the size of each unit. Also check the small print to see when the bylaws of the building allow for the deductible to be applied to only one unit.
The Strata Fee!
Last, but by no means least, check the monthly strata fees! Don't forget to ask what these actually cover. As this can vary from building to building it can be an important consideration. High fees may include a whole range of services while low condo strata fees may only cover basic maintenance, this could leave you with higher utility or service bills. The lowest strata fee may not be the best!