More and more people are looking to downsize their accommodations and stop worrying about home and yard maintenance. Condominiums (“condos”) can be an attractive option to many people and have gained popularity on Prince Edward Island. If you are thinking of purchasing a condo, you should be aware that condo ownership is quite different than other types of residential property ownership.
What am I buying?
As a condo owner you are essentially buying your own unit but you also share ownership of the land, building and common elements. The share of your ownership may depend on the size of your unit and the number of units in the condo property. For example, if there are ten condo units of equal size, each owner would share 10% ownership. This is an important factor to be aware of as you will share in the major renovations or repair costs that are not covered by a reserve fund, or are over budget, proportionally to your percentage of ownership.
You will also have access and use of the “common elements” of the condo property. These include the foyer/entrance of the condo building, the parking lot, hallways, etc. Essentially common elements are spaces within the condo property that are outside of the units.
The Management of a Condo Property
The management of a condo property is carried out by a condo corporation, which is comprised of a board of directors elected by the owners of the units. The board is responsible for calling meetings, presenting changes to the by-laws and organizing votes for any major changes, repairs or modifications to be made to the property. As an owner you will be able to participate by voting on any major changes to be made. Normally a property management company is also hired to coordinate the services the condo property requires, such as repairs, maintenance and other services.
What to review?
When purchasing a condo, you will want to ensure that the condo corporation has a healthy reserve fund, which is an amount of money that is held for repairs and maintenance for the units and the common elements.
You will want to review the condo declaration. This document includes information regarding the common expenses, the percentage of ownership allocated to each unit and a detailed description of the units and common elements.
You will also want to review the condo by-laws before purchasing. These are a set of rules that govern the condo units and common elements. These by-laws may include restrictions regarding parking, pets, noise level and can even include restrictions on certain aesthetics or outdoor fixtures such as satellite dishes.
As a condo owner you will have a monthly “condo fee” or “maintenance fee”. Depending on the condo by-laws, your monthly condo fee will cover costs such as snow removal, landscaping and general upkeep of the common elements. A portion of these fees may also be held in a reserve fund for major repairs. Condo fees can vary depending on the number of units as well as the age and condition of the condo property. You will want to budget accordingly for these fees when considering purchasing a condo. You should also be aware that as expenses for repairs and services increase it is common for condo fees to increase accordingly.
The condo corporation is responsible for obtaining and maintaining insurance on the units and the common elements. However, as a unit owner you would want to be sure that you have additional coverage for any personal property, personal liability within your unit and additions or alterations you have made within your unit.
Is a Condo Right for me?
Each home buyer is different and it will depend on your lifestyle, budget and housing needs to determine if a condo is right for you. There are certainly pros and cons to purchasing a condo and it is important to consider all aspects of condo ownership before purchasing.
The lawyers at Key Murray Law working in the area of Property Law would be happy to answer any questions you may have regarding the purchase or sale of a condominium property
Legal information appearing in this article and elsewhere on Key Murray Law’s website is intended for informational purposes only and is not intended to substitute for or replace any legal or other professional advice. If you have specific concerns or a situation in which you require legal advice, you should consult directly with one of our lawyers.