Buying a condo is a big deal, and if it is your first time coming into home ownership the learning curve can be an overwhelmingly steep one. Finding the right place, applying for financing, inspections, evaluations, waiting for possession, it is an exciting time. But just like the feelings of excitement and nervousness can easily be confused, there are many aspects to buying a condo that might seem a little muddled at first.
For instance – what is a condo fee? Like actually – what is it? Most of us know that condo owners expected to pay such a fee, and the fee takes care of some overall building management costs. But it is worth looking into just what those costs typically are before making your purchase. The money is typically handed to a professional condo management company that then helps to manage the fees. As an owner, however, you do have a say in how that money is spent. It is worth knowing where the fees usually go before you buy.
The condition of the building is certainly something you will be checking out prior to purchase as well. While the unit you are interested in purchasing might be in good standing itself – even newly renovated – the building could harbour issues with age or location that you must know about. Consider factors like; When was the roof last replaced? How old is the plumbing? Major issues will put a drain on the reserve fund that is banked from your condo fees, and if there is not enough money in the pot then it could result in a spike of those fees or an unexpected request for money.
In the same vein, asking about the history of the building is important as well. Is the building in a location that might require additional security? Are break-ins a common occurrence or is there a concierge? Especially in Calgary – we want to consider if the building has ever flooded, what damage was suffered during the flood, how those damages were managed, and what securities have been put into place to soften future liabilities. Are there any other major environmentally related damages it has suffered?
As of January 1, 2020, condo corporations may look look to recoup the cost of their insurance deductible from condo owners in the case of an insurance claim. This can be up to $50,000, and condo owners may be responsible for their share of the cost, regardless of whether or not the owner is at fault. When you’re purchasing your condo, it will be important to request a copy of your condo’s insurance policy, purchase your own insurance, and make sure you’re covered for the deductible from the condo corporation.
All of these factors, the little bits outside of the actual purchasing and inspection of the unit itself, will contribute to the homeowners insurance that you will be purchasing once you do take possession. Don’t let any of this dissuade you, though! Responsible choices come from asking well informed questions, and if you are unsure about what you might need to know for your big condo purchase, contact your insurance agent and get as much information as possible. We are here to help!
Do you have questions about how much Condo Insurance costs? Worried about the new changes to insurance regulations? Contact one of our experienced brokers today!
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