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7 things to check before buying a condo

February 7, 2022

For a first real estate purchase, a condo is generally more affordable than a single-family home—especially in a city setting. If you’re already a homeowner but are dreaming of a simpler lifestyle, many condos handle snow removal and other chores for you. This property type meets many buyers’ needs but requires that certain specific checks be made. Here they are.

Take your time before buying

1. Important documents: Does your purchase offer give you enough time?

Make sure the terms of your offer to purchase allow enough time for you to consult all the necessary documents, such as the condo declaration, financial statements, by-laws and location certificate or certificates. Make sure the sellers already have some of these documents on hand or ask the condo syndicate for them.

Did you know?

The condition of receiving and reviewing the declaration of co-ownership can be included in your purchase offer. This is imperative!

Check the condo’s financial situation

2. Condo fees: What other contributions will you have to make?

Condo fees vary from one development to another. The inclusion of certain services is one factor considered in determining the fees, for example, snow removal, landscaping maintenance and access to a pool or gym. Like any budget, the condo budget must be balanced after calculating cash inflows and outflows. If the condo’s financial statements show a deficit, a special contribution could be required next year. Include this in your budget or plan for it when you present your purchase offer.

3. Contingency fund: Does it meet regulatory requirements?

Since January 10, 2020, Bill 16 has required condos to include a contingency fund in their budget. It is recommended that syndicates periodically (every 5 years, for example) assess the cost of major repairs and of replacing common amenities to ensure adequate savings.

The following questions shouldn’t go unanswered:

  • Does the property you’re interested in already adhere to this practice?
  • What work has been done recently and, according to the maintenance log, what projects are pending?
  • Is the contingency fund able to cover the costs, or could you have to pay a special contribution?

Surround yourself with professionals

Don’t hesitate to reach out to a legal professional to help you interpret legal documents.

4. New regulations: What is the value of the self-insurance fund?

Effective April 15, 2022, Bill 141 requires condos to have a self-insurance fund. This means that at the end of the first year, this fund must contain at least 50% of the highest deductible amount, then 100% at the end of the following year. If a loss occurs requiring the withdrawal of money from this fund, the condo syndicate will then be required to collect a special contribution from its members the following year. The goal is to restore the entire fund. The maximum contribution that can be required in a single year is 50% of the highest deductible amount. If necessary, the difference will be claimed the following year.

Does the desired property have a self-insurance fund?

  • If it’s incomplete, how much will you have to contribute?
  • Has a claim been made in the last 2 years that may require additional contributions?

Home insurance

Even if the condo is insured, it’s important to consider buying a personal insurance policy. This will cover your civil liability, personal property and improvements to your unit that meet your needs, in addition to the condo insurance. Contact your insurer for a personalized analysis of your situation.

A Desjardins financial advisor can help you prepare a budget that’s in line with your situation. Make an appointment. to receive support suited to your financial situation.

Make sure you’ll enjoy your new living environment

5. Maintenance: Who maintains and manages the building?

Minor repairs, snow removal, landscaping maintenance and maintenance of common areas are often handled by service providers. In some smaller buildings, the co-owners prefer to share tasks instead. If this is the case for the condo you’re interested in, are you ready to take on the required chores?

6. Minutes: What can you learn from recent co-owner meeting minutes?

Condo syndicate meetings and annual general meetings are recorded in the form of minutes. These documents contain valuable information about your future living environment. Have there been any significant events, such as major repairs or conflicts between residents? Have there been complaints about excessive noise? Are new by-laws under review?

7. Syndicate regulations: What are the condo regulations?

Each development has regulations governing its living environment. Do they match your expectations? For example, short-term rentals or installing a BBQ on your balcony may be prohibited. Also check whether certain regulations limit the scope of potential renovations to the unit.

Whether it’s your first property or you’re an experienced buyer, these few checks will provide you with valuable information to help you make an informed decision. The important thing is to avoid surprises so you can make the most of your new home.