These are our top questions to ask when buying a condo:
- What is included in the maintenance fee?
- Is there a storage locker included?
- How much is in the contingency reserve fund?
- Is there a depreciation report?
- Are there any special levies currently approved or proposed? How much have you paid in special levies in the last 5 years?
- When was the roof done?
- Is the building on a boiler system or is there a hot water tank in unit? If there’s a hot water tank in unit, how old is it?
- What does the insurance cover? How much is the strata insurance deductible?
- What are the rules and bylaws?
- Does the building has history of or current lawsuits or litigation?
- What are the amenities available?
- Is the building rainscreened?
- Who is the property manager and what are they like? Is it self-managed?
- Any idea who is above, below, and/or beside me? What are they like?
What is included in the maintenance fee?
The maintenance fee, also known as the strata fee, is an amount that is paid on a monthly basis (typically the 1st of each month) that goes towards covering the operating expenses of the building and contributing to the contingency reserve fund. There are some strata’s that cover gas, landscaping, snow removal, heat, concierge, amenities, and/or more as a part of the maintenance fee. You’ll want to know whether it’s all covered, or whether you can expect another bill so that you know the full cost of homeownership before you buy.
Is there a storage locker included?
One of the common complaints about condos is they don’t have enough storage space. Some condo buildings have storage lockers that are allocated to units, and a common size is 6’ height x 4’ wide x 6’ deep. Having that extra storage space is huge bonus, and can help to store holiday decorations, snowboards, bikes, household items and more! Ask if you can see the storage locker to confirm it exists, and also verify that on the Form B strata document it says that a storage locker is included with the unit.
How much is the contingency reserve fund?
The strata’s contingency reserve fund (CRF) can be seen as their savings account. The more saving’s they have, the less likelihood of special levies incurred by the owners there will be. The contingency can also help to fund big capital projects, such as roof or building envelope replacements, and cover any unexpected repairs and bills. Having a healthy contingency is representative of a well-run strata, and is definitely one of the top things you should be looking out for.
Is there a depreciation report?
Further to the previous point, a depreciation report is something that is often obtained by the strata to analyse how the contingency reserve fund will hold up against depreciation of the building and costs that are incurred because of that. It reports the age of each building item, when the strata can expects to replace it, and how much it will cost. By analysing the costs, the engineer is able to compare the costs to the existing amount in the contingency and current maintenance fees, and make recommendations on key repair/maintenance items, increase of maintenance fees, and anticipation of special levies. This document is very helpful when it comes to financial and building repair planning, and will also indicate to you whether the contingency is healthy or not.
Are there any special levies approved or proposed? How much have you paid in special levies in the last 5 years?
You’ll want to know if there are any special levies in the near horizon. We always add a clause that if a special levy is approved prior to the completion date that it is the responsibility of the owner, to avoid any issues if a special levy is approved after we hand in the deposit but before the move in date. You’ll also want to know if any special levies are proposed in case you want to negotiate for a hold back, or plan accordingly. Understanding what special levies have been paid in the last 5 years, if any, will give you an idea of the strata’s style of balancing contingency, maintenance fees, and special levies.
When was the roof done?
This is one of the most common questions asked when buying a condo, largely because the roof is one of the most expensive repairs for a strata and owners! Most roofs last 20-25 years, so you’ll want to know whether it has been done already or if you should expect it moving forward and when.
Is the building on a boiler system or is there a hot water tank in unit? If there’s a hot water tank in unit, how old is it?
If a condo is on a boiler system then that means there is a centralized boiler that distributes hot water to all of the units in the building; which also means that hot water is included in the maintenance fee. Alternatively, if there is a hot water tank in the unit that means that you are responsible for the maintenance of that hot water and should be replacing it roughly every 10 years. (average recommended life span) While having hot water included in the maintenance fee is nice, hot water in the unit means you will probably have faster access to hot water and more control over it as well!
What does the insurance cover? How much is the strata insurance deductible?
You’ll want to obtain the strata insurance note so that you can analyse what the strata is responsible for and the existing coverage they have so that you can match your personal unit insurance up accordingly. Being aware of the deductibles to insure that you can obtain proper coverage is also very important!
For more information on strata insurance premiums and deductibles, check out this blog: Strata Insurance Premiums & Deductible Increase in BC
What are the rules and bylaws?
Knowing what you can and cannot do is extremely important in a strata property. Can you rent out your unit? Are you allowed BBQs on your balcony? Are you allowed pets? Is there a size/height/breed restrictions for pets? Are there quiet hours? Knowing the rules and bylaws BEFORE you buy the home will ensure that you understand the condo lifestyle and what comes with it. Also, keep in mind – not all strata’s are the same with regards to their rules and bylaws, so make sure you read the documents with relation to the building you’re purchasing in very carefully!
Does the building have history of, or current, lawsuits or litigation?
Lawsuits happen, and they can be expensive. You’ll want to know whether there have been lawsuits in the past and how they have been settled, as well as any current lawsuits or litigation pending. Most of the time lawsuits end up being funded by form of special levy as the contingency and maintenance fees cannot keep up with cost of lawyers; so you’ll want to be aware if this is the case.
What are the amenities available?
Many buildings offer access to a gym, pool, hot tub and more! You’ll want to know what amenities are included in the maintenance fee so that you know any added inclusions that you can enjoy! Keep in mind though, a risk of amenities is that this is something that the strata needs to cover and insure; therefore, the cost of maintaining a building with a pool and hot tub is often more than one without one.
Is the building rainscreened?
This is a big one in the Lower Mainland, and the reason you might want a rainscreened building is to help manage moisture and protect the building from water damage. Most buildings will be rainscreened post 1996 but some areas further east were delayed to the early 2000s, so this is specifically something you’ll want to keep an eye on if you’re purchasing an older building.
Who is the property manager and what are they like? Is it self-managed?
The property manager is there to help guide the strata council with regards to the strata property act, and also help to manage building inquiries, quotes and more. If you’re dealing with a self-managed building, they typically don’t have the same experience or up to date knowledge as a property manager. (but not in all cases) The property manager often significantly impacts how well-run the strata is, so you’ll want to make sure you have a good one.
Any idea who is above, below, and/or beside me? What are they like?
Unlike a single family home where you’re on your own lot, or a townhouse where you might share the walls beside you, in a condo you have the possibility of having people below, beside, and above you! You’ll want to get an idea of the demographic of the building, what your neighbours are like, and who you’re sharing your walls with.
If you’re looking to purchase a property and want a realtor that specializes in strata properties, then give us a call. Start a conversation by calling 604-765-0376. Prefer text? 604-319-0200 or email [email protected]. We’re here to help you find the right condo that is a smart investment for you.