Condo equal responsibility
If owning has it’s share of responsibility, then buying a condo is even more demanding in this respect. Responsibility on steroids if you like. The hood may be great, the building cool, the price within your means, but wait… don’t pack just yet. Consider the overall costs and commitments of owning that condo. The infamous monthly condo fees, planned or unplanned contributions to the building’s reserve fund will significantly inflate the overall cost of ownership.
Prevention is the best medicine
To reduce the impact of unexpected expenses related to roof repairs, replacing the windows or foundation problems the buildings’ reserve fund should have a sufficient balance to cover yearly upkeep, maintenance and repair of the property. Why? As a co-owner, you are not only responsible for all expenses in proportion to the space (square footage) you occupy, you are also jointly liable to make up the difference if a co-owner doesn’t fulfill their financial obligations.
For example: A building with 6 condominiums repairs the roof at a cost of $24,000. In the absence of a reserve fund, each owner would have to pay $4,000. But if one of the owners is not able to pay, you are obligated to cover the difference together with the 4 other owners. However, if you have a reserve fund with a balance of $18,000, the risk is greatly reduced.
Insure your interests are covered
For a one-time cost of a few hundred dollars when buying your new condo*, you can enjoy peace of mind by purchasing title insurance. The unique product protects your title interests and covers additional costs arising from a co-owner not being able to meet their obligations, as illustrated in the earlier example.
*A change of lender requires a new policy.
He who is absent is always in the wrong
A quote worth remembering when it comes to owning a condo. Understand that you are legally bound by the decisions passed during general assembly meetings (annual or semi-annual) attended by owners. It may be minus 20 and snowing outside, but it’s probably a good idea to make the effort to attend.
As recommended by Caroline Bessette, President, Notary Bessette.
- Know your legal responsibilities
- Engage in the condominium assemblies
- Consider title insurance