Do not Underestimate the Importance of Condo Documents

Are you planning to Sell your condo? One of the first things you need to do is assemble an up to date condo document package. Even if you have all the documents from when you purchased the property and have saved all the updates that have been sent to you, the documents you have will be out of date. This is why you need to start gathering them before you put the property on the market.

The simplest way to do this is to contact your property manager and request what you will need. If you are unsure what you will need, email me  and I will be happy to help you with a list. The property manager is going to charge you for these documents, presently, there is no maximum amount set for these charges. There are some companies charging outrageous amounts. There are a couple of ways to try and get them for no money. One of these ways is to contact members of the board for copies, because these people sit on the board they will usually have documents that are up to date. I have served on the board of both complexes that I own a unit in and I always had up to date copies of everything. The other way, is to talk to someone who has just purchased in the building and to make copies of what they have, you may still have to get a few items but your costs will be way down.

Do not let someone tell you these documents are not important.

All prospective buyers are going to make the sale conditional to receiving the condo documents. Virtually all of them will have a document review company review them to determine the health of the building and the corporation. Most of these companies take at least 3 days to do the review and will not start the process until they have everything the need. The longer it takes you to get the documents to them, the longer your condo will be off the market. I usually allow 5 days for this condition to be satisfied, but when sellers do not have everything that is being requested, 5 days can become 10 or more. This why I suggest your start the process before you list your property, not wait until there is an offer.

Condo Boards

Being a member of a condo board can be a very thankless position to have. Even so, I always recommend that every owner take their turn sitting on the board for at least one term. How else are you going to learn about what is going on in your complex?

The main qualification you need is caring about the complex and the overall living environment of your neighbors. Being a board member means that sometimes you will have to make some unpopular decisions. The decisions will usually mean condo fees going up or worse yet, implementing a special assessment. To insure a complex is maintained properly, these decisions have to be made. As an owner you want your property to be well maintained, this will not only keep the values up, it also makes it easier to sell when the time comes.

Lender’s Condition HEADS UP

It has brought to my attention that some lenders may be adding a lender’s condition for review and approval of condo docs by the “insurer” before they will finance the deal. This is coming to light at the “instructions to solicitor” stage and in spite of any independent condo document review that the client may have as a condition, this is an additional requirement.

Condo buyers and Realtors need to be alert to this fact and make sure to structure their offers accordingly.

A best practice would be for the purchaser to receive, in writing, a letter from their lender stating clearly that there are no further lenders conditions before they waive conditions. There have been some deposits forfeited as a result of this “surprise” condition. Is it not nice to know that your lender is willing to surprise you like that?
 

     WWWhen working with me I make sure that all your interests are protected.

I always write the financing condition to read: subject to financing and satisfaction of any/all lender’s conditions.

We don't waive conditions until all conditions have been satisfied. 

 We will Ask for and receive a lenders full satisfaction of conditions letter before you allow conditions to be waived.

I have now been including this condition in all of my condo buyers offers to purchase. If you are about to buy a condo the last thing you need is a surprise that costs you your deposit.

Condominium Doors and Windows. Who is responsible?

In Alberta, you can find the answer to this question by reviewing the Condo Plan. If the Condo Plan does not specify, then the doors and units are common property and the Condo Association must repair and maintain them. Please note; if the Condo Corporations bylaws state the doors and windows are the responsibility of the unit owners and the Condo Plan is silent, the doors and windows are still the responsibility of the Condo Corporation. The bylaws do not over rule the Condo Plan. In order to change this, and make the doors and windows the unit owner’s responsibility, a special resolution must be passed by 75% of the unit owners, then with court approval the special resolution can be registered to the condo plan.

When buying a condo, check the Condo Plan, if doors and windows are not mentioned, it is a reserve fund expense.

Condominium Reserve Funds
Every condominium corporation in Alberta must have a reserve fund. The reserve fund is money set aside to repair and replace the common property and any real or personal property owned by the condominium corporation, where the repair or replacement does not occur annually. The fund is not to be used for the day to day expenses of the corporation.

I often get asked how much money should be in the reserve fund. Each condominium complex is different and the amount that should be in the reserve fund is determined by a reserve fund study. I have seen condominiums with a low reserve fund, but because they had been following the reserve fund study, all repairs were being done on time and at the time my buyers were buying into the complex, a large fund was not needed, the fund was growing and the amount that would next be needed, would be in place for when the reserve fund study called for it. Even though the fund was low, the condominium board was doing a great job of managing it and the complex was in great shape.

I have also seen the opposite, were the reserve fund was very large, but there had been no work done to the complex, the board had not been following the study and the complex was in poor shape.
As a buyer, ask your self which condo complex would you rather buy in to? It should be a no brainer, but often it isn’t. I have seen people buy into the condo complex with the higher fund and get a special assessment a couple of years later. Even though the reserve fund was higher, because repairs were put off, the cost of those repairs were much higher when they were finally done.

If you are buying a condo, don’t get fooled into thinking a condo complex with a higher reserve fund is the better complex. Do your home work; get all documents reviewed by a professional company and see how close the reserve fund is being followed.

Please feel free to contact me if you have any questions, I will be happy to help.

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