What is condominium ownership? It’s a relatively new form of ownership here in Ontario. It was made legal in 1967 but didn’t really catch on until the 1980’s.
Condominium ownership can almost be described as communal, with one important difference. Your neighbours aren’t going to walk into your place whenever they feel like it. While your neighbours do own a communal share of the property and vice versa, they don’t have any right of access to your particular suite or unit. What is inside your four walls is yours alone. You are responsible for maintenance, and any renovations you undertake, to the interior of this property. And the unit or suite is registered in your name.
The property you share with all the other unit holders is known as the common elements, and this is both the boon and bane of condominium ownership. Common elements includes the exterior structure of the building(s) such as brick and siding, roofing, doors and windows. It also includes things in and around the condominium complex such as tennis courts, elevators, lobbies, gyms, parking garages and swimming pools.
The maintenance and upkeep of the common elements is paid for with condominium fees. Things like snow and garbage removal and landscaping also come out of the condo fees established by your condo board and property manager. A reserve fund to cover major future expenses must also be maintained and this too, comes out of the condo fee budget.
The fees aren’t optional and aren’t negotiable. If you don’t pay them each month the condominium corporation has the right to foreclose on your property.
Regardless, condominium ownership is great for busy, elderly or mobility limited people. Maintenance is taken care of by the property manager. There’s a certain peace of mind knowing you won’t get hit with a $10,000 bill for a new roof. You can come and go as you please without worrying about the lawn. Snow shoveling? To heck with that!
But the convenience of condo ownership can come with hidden costs. Inflation is just one of issues you’ll face as it’s almost guaranteed that the property manager will tack on three, four or five percent each and every year. As a result your condo fees go up each and every year too.
An aging building is another concern, especially if it’s a high-rise apartment style condo. The property manager can’t just hire anyone for windows or roofing. They need professionals who work on high-rises and these don’t come cheap. Equipment like replacement elevators are $100,000 each and if the building has several that need replacing then your fees are bound to go up.
If you’re thinking of condominium ownership I’d advise getting into a townhouse condo as the fees are usually lower. It tends to be much more affordable to hire roofers and window guys when they are only working at modest heights.
If you absolutely must have an apartment style suite then make sure the building is between 2 and 10 years old. Why two years, and not new? It seems that fees always spike within a year or so after the building is finished and occupied by the unit holders. And anything older than ten years is beginning to age so I’d want to stay clear.
Lastly, if you buy a condominium get elected to your condominium board. You want to be part of a board that treats the condominium like a business. Control your costs. Educate your fellow board members and hold your property manager to account for the services they provide. If you are unhappy you can even fire them. Don’t be afraid to put the management contracts out for tender.