Condo sales are on the rise in Ottawa right alongside residential, freehold homes. Whether you’re buying a condo or a freehold there are so many items you need to be aware of. We help you with that all the way along. Particularly with condos an extremely important piece of the puzzle are the condo fees…you need to know what you will be paying, when you will be paying, what you are paying for and whether those fees are likely to go up.
Many of you may have read the article in the Ottawa Citizen today, April 30, 2018, about condo owners being shocked about their fees doubling due to a special levy put in place to take care of required repairs. This is something to be very aware of as it absolutely can happen. Condominiums have something called “reserve funds” which is where the surplus from your regular condo fee goes after paying for typically common area maintenance, building insurance, property management fees and a caretaker (some include all utilities or a mix of them). This reserve fund is in place should repairs be needed, the condominium can draw from this fund. However, at times, repairs can be extremely costly and cost more than is in place. It would be at this time that your condo fees can be raised, yes even doubled, OR flat fees will be payable annually for a certain number of years to cover the cost of the repair and bring the reserve fund back to a healthy amount.
Whenever we are looking at condos for buyers we research them to no end to ensure that the condominium is properly managed and that the fees that are in place are of a valid amount and are likely not to go up in the near future. Some ways we do this include:
- Researching the MLS history of a condominium to see how the fees have risen year by year (if they have)
- Call agents who have recently purchased with buyers for the same condo to see if anything arose with the review of the condo’s status certificate and financial statements
- Calling the property management company to ensure that no major repairs are happening that they are aware of which could raise the fees or require a special levy
- ALWAYS request a review of the status certificate, condo documents and financials by our buyer’s lawyer as a condition of the agreement to ensure nothing is out of the ordinary and our buyers are protected
- Perform a home inspection to ensure that nothing is out of the ordinary that the condo does not know about and to do our best to ensure that no major repairs will be needed that could raise the fees or require a special levy
If you are thinking of purchasing a condo or a house, please feel free to give us a call to discuss our process.