When my husband and I were looking to buy a place in Toronto this time last year, we always had it in our minds that we would buy a house instead of a condo. We liked the idea of owning land — even if it was the tiniest sliver of land imaginable. Having rented our entire adult lives, we became fixated on the idea of owning property that had only our names on it.
Well, that may have been a pipe dream, especially after realizing that our budget of $500,000 couldn’t even afford us a gut-job in Toronto’s east end. After looking at dozens of homes and even getting into an emotional bidding war over one particular house, in the end we decided to take a break and continue living in our one-bedroom apartment rental.
Having had a year to reflect on our experience, I honestly don’t think that my husband and I’s first home will be a house with the way housing prices are going. We don’t want to rent forever, so we’ve started to weigh the pros and cons of owning a condo.
Condo-Living Can Mean More Rules & Restrictions
One of the biggest differences between being a condo owner and a house owner is that there can be more rules and restrictions that come with condo-living. When you own a house, you can paint the walls whatever colour you want, you can knock down walls or put up new ones, and you don’t have to worry about having pets.
In many condo buildings, there are a number of restrictions you must abide by such as not being allowed to sublet your suite, not being allowed to have pets, noise-levels, balcony furniture, even restrictions on changing your drapes.
To make sure you have all the facts before making one of the biggest purchases of your life, make sure to check out the condo’s status certificate. This certificate should include:
- The current condo owner’s status on paying condo fees (are they behind in their payments?).
- The condo corporation’s financial status (what is the current budget, and are their major repairs planned in the future?).
- The condo declaration, outlining the percentage of ownership each unit has in the property and how much each owner must pay in condo fees.
- A complete list of the condo’s by-laws, rules and restrictions.
You Could Be Held Financially Responsible for Big Repairs & Renovations
It can be expensive renovating a whole house, but don’t think you’re off the hook just because you live in a condo. The leaky condo crisis of the 1990s is a huge example of this. There was a big condo-boom in Vancouver and the Lower Mainland from the 1980s-1990s, and because of this a lot of corners were cut to get these buildings up quickly.
Since the climate in these areas is heavy with rain, the condos started to leak water, causing billions of dollars in damages — and it was the condo owners who largely had to pay the price.
Although this is an extreme case, you should definitely find out if a reserve fund study has been taken for the condo you are considering buying and make sure that it is not underfunded. If it is underfunded, and for instance the roof needs to be replaced on the building, the condo owners have to pay the difference.
Don’t Forget the Condo Fees
When you own a condo you are required to also pay condo fees (also known as maintenance fees). These fees go towards paying for general building maintenance and repairs, operation costs associated with gyms, party rooms and swimming pools, and any building staff such as a concierge or security guards.
Condo fees can also include utilities (e.g. heating, hot water, Internet), but since every building is different, it’s important to find out what exactly is included in your condo fees.
It’s just as important to find out how much those fees are, how much they have historically increased, what the plans are for them to increase in the future and how they are calculated. For instance, last year I remember looking at a few condos online, and what I found out was that older buildings with more square footage had much higher condo fees than newer, smaller units.
Sometimes condo fees are higher for older buildings because they require more maintenance and repairs, and sometimes it’s determined on a square footage basis.
Additional Things Consider
When you buy a condo, you aren’t just buying a suite in a building — you’re buying into a community. Although your unit is yours, it’s part of a bigger community of other condo owners in the same building. Make sure that it’s the type of community you want to live in, because once you buy a condo, it’s not as easy to re-sell it and move unlike renting.
Another thing to consider is parking. Currently my husband rents a parking spot in our building for an extra $35/month. When you purchase a condo, sometimes you can also purchase a parking spot in that building, or you are assigned a parking spot that is still owned by the condo corporation.
One final thought, and honestly this has always been a deal-breaker in my books, how sound-proof is the unit? In my current apartment building, it’s built out of concrete so it is relatively quiet compared to some of the wood builds I’ve lived in previously. That being said, our door isn’t properly hung and there’s a big space between the floor and the door that lets a lot of sound from the hallway in. If I were to buy a condo, I’d want to make sure my unit was almost completely sound-proof.
How RECO Can Help
This post is sponsored by the Real Estate Council of Ontario (RECO). All opinions and thoughts are my own. The contest mentioned above is only valid to entrants in Canada-only.