Tuesday, October 24, 2006
The ABC Of Condo Buying
If purchasing an apartment is in your cards, read this Article filled with professional advices authored by a veteran Real Estate Agent of nineteen years, five-year Strata Council Member, two-year Strata Council Vice-President and two-year President (... that would be me ...).
Combining the advantages of apartment occupancy with those of home ownership has long been a dream of urban dwellers. But there are times, however, when dreams turn into nightmares. Throughout my plurannual Real Estate career, I think I have seen my fair share of horror stories when it comes to people who bought apartment units. So much so, in fact, that I have decided to lay out in brief the foundations of condo-buying, which every responsible and prudent condominium Purchaser should always follow, irrespective of price, location and taste.
Here we go:
[ ] Strata Documentation: Read It Like The Bible
Why? Because it is your Bible, as a condo-purchaser. Yes, the law says that your Agent, during the course of the fulfillment of his/her duties, is responsible for reading all the Minutes, reports, bylaws, condominium rules, the Strata regulations ... and raise all sorts of red flags, should something not be the way it is supposed to be. Which is all very fine, fair and dandy. But in practicality, it is you the one that will move in, come Possession Date, not your Agent.
You may discover things that your Agent is not under any obligation to disclose, and which nevertheless will have an impact on the quiet possession and enjoyment of the unit you are set to buy. For example, you may find out that the owner next door has been fined repeatedly for playing the drums at midnight. Or that the fellow two floors up has this habit of tossing cigarette butts out the window, which will invariably land on your balcony. Or that there is no clothes washing and drying allowed from 7:00 p.m. to 7:00 a.m. Even an unusual number of noise complaints involving stereo and television sets will affect the quality of life in your new apartment.
When you move in and make the place you bought your home, it is the little things that count, not the legal garble - as much as that is also very important. So, if you discover that hanging red drapes is forbidden and you are just so crazy for red drapes - well, you may want to think twice about finalizing the purchase.
[ ] Do Condos Need Inspections? You Betcha!
In fact I am always fond of telling my Clients that condos need triple inspections: the ordinary professional home inspection to cover the elements of the unit you are about to purchase, such as electrical system, plumbing and heating components. The extraordinary professional inspection to establish the condition of the exterior upkeep of the building, roof, basement, recreational facilities if any, parking and storage areas and ventilation system as well as fire exits and hallways. Your own inspection of the building envelope and rainscreen, if any, by going through and understanding all Strata Minutes and Engineering reports commissioned by Strata, and by having your Agent do exactly the same.
It must be remembered that a strata development consists of strata lots, common property and common assets. Every strata owner owns a proportionate interest in the common property and common assets of the strata corporation. The owner cannot separate his or her interest in the strata lot from the proportionate interest in the common property and common assets, which means that the owner is liable for their maintenance, upkeep and eventual replacement. So therefore, get a professional to inspect them all.
[ ] Stay Away From High-Rent Developments
If you buy a house, you want to make sure that your neighbourhood is made up of people like you, who really make a commitment to the upkeep of their homes and to maintain the safety of the streets. This is the reason why it is not the best idea in the world to move into a street where most homes are rented. The same goes for condos.
When buying into a condo development, find out the ‘rental rate', that is the percentage of units that are rented out. The higher the percentage, the more concerned you should be. This is so, because the more tenants - and landlord/owners - there are in the building, the fewer people you will see willing to pitch in for long term improvements and ameliorations which, in ultimate analysis, will be counterproductive to the appreciation and stability of your investment.
If the rental rate is over 50 percent, do yourself a favour: go buy somewhere else.
[ ] Share As Few Walls As Possible
The rule of thumb in residential condominiums purchasing is that the more walls you share with other units, the more you will feel like being on Main Street on the Fourth of July - every single day for the rest of your life. The same goes for the floor and ceiling. It is going to be quieter, much quieter, to have only someone below you than to have people above and below you. This is the reason why corner suites are usually more expensive, and why top floor corner suites are ‘la crème de la crème'.
[ ] Check For Signs Of Aging
Old apartment buildings can be charming indeed, especially when the new high-rises look like big blob of concrete to you. But there are times when the old fashioned ‘character' can put you all the way back to prehistory, at the time when Homo was scavenging and foraging in the high plains of the East African savannah. Alright, I confess - I am not the ‘character' type of buyer, as I like everything new and ultra modern. However, if you are entertaining the idea of taking a leap into prehistory and buying a condo in an old apartment building, check for signs of dilapidation such as crumbling walls or roof, as well as verify whether the heating, cooling and ventilation systems are regularly serviced. If they are not, you may soon be paying extra monthly maintenance fees to fix breakdowns.
And do not disturb the ghost ...
Real Estate Chronicle