Condos are popular with young people these days.
It is now undeniable that millennials are in love with condos and sales for this type of housing has continued to increase in recent years.
Yet, most young condo buyers often do not have a clue about how a condominium operates
and what owning one entails.
We’ve heard a few horror stories, and to prevent this from happening, we’ve listed the 5 things that millennials should know before buying their condo!
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Millennials, pay attention to the tips below.
First lesson: a condo is not an apartment!
You are not a tenant, but an actual owner when you buy a condo.
What you absolutely must understand is that every condo building is different and has regulations of its own.
You may find a building one day that allows BBQ on the balcony and Airbnb rentals and the next day visit a housing that prohibits both. You know what I mean.
Here’s what you need to understand: When you buy a condo, you cannot always do what you want!
There is a list of regulations to follow that you cannot ignore.
Do you own a dog? Most condo buildings prohibit them.
Even though you are the condo owner, you don’t have the right to act as though the entire building belongs to you.
Does this sound logical? Well, many buyers have learned the hard way about building regulations and realized that they had to dispose of their dogs and that their barbecue was forbidden. Pleasant, is not it?
Young millennials, take the time to read in detail the regulations of the building in which you want to live.
There are many buyers who don’t and live to regret it.
It will only take a few minutes!
A condo building is a micro-society!
All the residents of the building pay monthly co-ownership fees which serve to fill what is called a provident fund.
This contingency fund is used to pay the costs of replacement, maintenance, and renovations of the building.
If everything is well-managed and calculated, you will never have to pay more than what you are asked for each month.
However, this is not always the case, and some unions do not provide for all the expenses.
As a result, the contingency fund is not enough and they will come knocking on your door one morning asking you to pay
$5,000 to replace the roof of the building.
That could turn into a disaster if you have not planned for that expense.
What can you do to prevent such a situation from happening to you?
In your offer, ALWAYS demand to inspect the financial statements of the condominium corporation.
It sounds serious and negative, but on the contrary, it is necessary and prudent!
You will then be able to show the financial statements to your broker or accountant who will tell you if the fund is in good health and if the current management is responsible.
If your accountant tells you that there is not enough money in the fund to cover future expenses and you may need to pay large amounts out of pocket, you can simply cancel your offer.
This is the purpose of the clause you insert in your offer.
It is used to ensure BEFORE YOU BUY that the finances of the building are in good health, and allows you to make your offer to purchase void if you are not satisfied.
All young millennials should take note here to avoid costly mistakes!
The demand for buildings with ultra-modern condos equipped with a gym, spacious terraces, and indoor pools has really taken off!
Yet, young buyers do not seem to realize that these common spaces, as nice as they are, are not free!
They say that the more amenities a condo building has, the better the deal!
This may be true it that’s what you’re looking for, but you need to understand that you PAY for these common spaces.
In fact, the cost of maintaining these facilities is distributed among all the co-owners of the building via condo fees.
Regarding the big condo buildings that you covet so much, you must plan to pay quite a bit of condo fees each month to take advantage of the facilities.
It may be that the gym, the deck, and all other common areas will cost you $ 200-300 per month (often more). If you do not use them frequently, it’s a waste.
The important thing to understand is that they don’t come free!
Whether you want to live in a building where you will have lots of shared amenities or not is your choice.
But do not think that you will enjoy it for free since it is you who will pay the bill each month, whether you use the services or not.
If you do not plan to use them, you may want to consider buying a condo in a more standard building.
It’s up to you to see which way of life attracts you, dear millennials, but remember that in life, nothing is free!
Well, we will explain, once and for all, the truth about the common notion that low condo fees are a good thing.
It’s actually a mistaken notion!
In fact, it is important to understand that very low condo fees in a building should stir your distrust rather than confidence.
Why? Because if the condo fees are low, maybe they have not been around long enough to cover the potential replacement cost of all the components of the building.
Yes, you pay $30 per month in condo fees, but if after 2 years, the siding needs to be fixed and you are required to give $20,000 immediately, you will feel less amused.
Young millennials must understand that when they shop for their condo, it is not enough to just consider the condo fees.
They need to consult the building’s financial statements to see if the provident fund is in good health.
If it is and the costs are low, so much the better!
If you find that the account is almost empty, that expenses are coming and that the monthly fees are low, you should perhaps avoid buying a unit in this building.
The lesson to remember here, young millennials: look beyond the amount of condo fees per month, and make sure that the building corporation’s finances are in order.
Managing a condo building is complicated!
The difference between a condo versus a conventional home is that its management is more complex and is done via what is called the syndicate of co-ownership.
What is a condominium corporation? Here is how the Civil Code of Quebec defines it legally:
CcQ 1039: The community of co-owners constitutes, as soon as the declaration of co-ownership is published, a legal person whose object is the conservation of the immovable, the maintenance and the administration of the common elements, the safeguarding of the rights pertaining to the building or the co-ownership, as well as all the operations of common interest. It is considered a corporation.
Therefore, it is the condominium corporation which brings together several elected people who live in the building (or sometimes external companies), who manage the maintenance and finances of the building.
The corporation has a board of directors, and there are usually co-owners’ meetings where all the residents of the building are invited to participate.
The by-laws of the building can then be modified at these meetings according to specific rules and conditions.
It is also the corporation’s mandate to ensure that the building is serviced on a regular basis, to calculate the monthly condo fees, and to raise them to bail out the contingency fund.
When there are repairs to be done, the corporation takes charge of holding biddings and ensuring that repairs are made.
Considering the above, you will find that managing a condo building is not simple after all.
All this is to say that millennials, before buying your condo, it is important that you understand that you will not live in a building as a tenant ignoring your neighbors.
If you wish to renovate your home, you will need to consult the corporation for approval.
A good real estate broker can help you to understand in detail the peculiarities of condominium living and the management of a condominium building.
When you know what to expect, it’s not that bad!
Are you a young millennial looking for the perfect condo that suits your budget?
Whether you’re a first-time buyer or a seasoned buyer, it is in your best interest to shop for your new condo with the help of a professional real estate broker!
Why? Well, he’s a real estate expert who can provide his services, 100% for free!
You would be crazy to refuse the help of an expert, right? Absolutely!
If you want to find one of the best brokers in your area without having to pick up the phone, here is the best way to do so!
Simply fill out our 100% free and no obligation form to compare the profiles of 3 brokers in your area!
It only takes a few minutes and you can do so without having to leave your house!
That’s total convenience, isn’t it?
If you’re ready to shop for your condo, do not wait any longer and team up with a broker to help you find the right unit for you!
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