CONDO FEES AND RULES CAN BE SURPRISINGLY COMPLEX
From first-time buyers to empty nesters, co-owned properties are one of the most popular types of occupancies. Co-ownership entails buying property in a multi-unit building that has both private and common spaces. The best example is a condo development.
If you’re interested in co-ownership, it’s important to know what it involves before making your purchase. To that end, the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) is an important resource for prospective co-ownership buyers.
“Most people think that buying a co-owned property like a condo is quite easy because they don’t need to worry about things like lawn care and building repairs,” said Hélène Morand, vice-president, enforcement of practices, at the OACIQ. “But the truth is, when you buy into a co-owned property, you’re buying a financial patrimony, so there are complicated things that need to be understood.”
As part of its mandate, the OACIQ has several recommendations and assets to ensure that you’re properly informed. Condo fees are among the most common points of confusion for buyers.
“People, and especially firsttime buyers, are attracted to low condo fees, of course,” Morand said. “While they may seem great, it’s important to inquire about what kind of financial condition the syndicate is in.”
The pool of money for longterm needs and repairs, which is fed largely by condo fees, is known as a contingency fund. While low condo fees may be attractive, if the consequence is an insufficient contingency fund, it could spell trouble down the road if, for example, building management can’t afford something like fixing a leaky roof.
It’s also crucial to ask about condo fee “layers,” which may catch buyers by surprise.
“This is especially true when dealing with big condo complexes, where there may be several levels of syndicates with different fees,” Morand said. “Trying to go through all of the financial statements to know what’s expected of you as an owner can be overwhelming.”
Aside from understanding the financial details of buying a co-owned property, prospective buyers should also consider parking spaces, common areas, barbecues, pets, and any other concerns they have.
“For example, if you’re a snowbird and want to leave for six months each year, you may want to ask about whether or not you can rent your condo out while you’re gone,” Morand said.
The Real Estate Brokerage Act enforced by the OACIQ provides that authorized professionals have an obligation to obtain all the necessary information for their buyers, and advise them on any questions they may have to the best of their abilities prior, during, and after the purchase of property.
“This includes obtaining and reviewing essential documents such as the declaration of coownership, meeting minutes, special assessments, insurance, financial statements, and more,” Morand said. “The ‘Request for information to the syndicate of co-owners’ form was designed especially to allow buyers to get all the information they need regarding the co-ownership property they want to purchase.”
The documentation and guides published by the OACIQ are available to help buyers by explaining the details of the co-ownership declaration, and other facts regarding properties’ bylaws and the co-owners’ meeting minutes. Through these resources, buyers can better understand the seller’s declarations and the various details obtained from the co-owners’ syndicate.
For more, visit oaciq.com.
While low condo fees may seem great, it’s important to inquire about what kind of financial condition the syndicate is in.