Condos purchases have increased substantially in recent years as the cost of housing has moved higher. Just ten years ago, condo sales accounted for roughly 16 percent of Saskatoon’s MLS® housing market. This year, condominiums account for roughly 27% of all residential resale activity on the Saskatoon multiple listing service®.
According to the Real Estate Insurance Exchange, a private company formed to provide errors and omissions insurance for real estate agents in several provinces, the majority of problems that arise in a condo purchase fall into four areas that they call the four P’s.
The four P’s are Pets, Parking, Payments and Paper.
When it comes to pets, it’s extremely important that all parties to the transaction are aware of the rules of the condo corporation. Don’t let the fact that the current seller has a dog or a cat give you comfort that you can bring yours. In some cases, grandfathering clauses allow current owners to have pets but prohibit new owners from bringing them. Some complexes have restrictions on certain breeds, or even size restrictions that you’ll want to be aware of if you plan on bringing or acquiring a pet in your new condo. A careful review of condominium documents, or a chat with the property manager should clarify whether or not you can bring your pet to you new home. In either case, request a copy of the condo corporation’s per policy in writing.
As far as parking is concerned, you’ll want to be sure you understand if it’s included with your unit, and if so, exactly where the parking stall is located. Is it assigned, and if so, by whom? Is the parking stall titled, and will you have the right to transfer it to a new owner when you’re ready to sell. The estoppel certificate should detail what rights you have to exclusive use of parking facilities, but occasionally we’ve seen estoppels that don’t address parking. Insist on having your parking rights detailed in that particular document.
The third P stands for payments. In this area, buyers or sellers may be confused about exactly what is included in the monthly condo fee. For instance, the buyer may be led to believe that the condo corporation covers electricity costs for each unit when they’re not covered. Buyers may also be taken by surprise regarding special assessments or one-time fees that are levied against unit owners, usually for the purpose of completing large and expense improvements that haven’t been provided for in the budget. Special assessments are normally known about in well in advance of being issued and a thorough review of meeting minutes can be a great way of learning about them when you’re considering a purchase. The estoppel certificate also contains information on special assessments that have been proposed or passed by the board.
Finally, the fourth P stands for paper. This is the stack of documents that a buyer will be provided after their offer has been accepted. Under the current legislation, a buyer has either five days or ten days to review the paper, depending on whether the unit is new, or a resale. At any point during the allotted time, they may rescind or withdraw their offer to purchase based on any information contained in the documents. It is the buyer’s responsibility to conduct their own due diligence and insure that they are aware of what they’re buying. Remember, you’re not just purchasing a home; you’re buying into a corporation that most typically has many owners. You’ll want to understand the by-laws and rules of the corporation, and you’ll want to have a good understanding of the corporation’s financial health. You will, after all, be responsible for some portion of it moving forward.
Thanks for watching. If you have questions about condos or any other Saskatoon real estate matter, feel free to give me a call at 306-241-6676, or drop me an email at firstname.lastname@example.org.
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Royal LePage Saskatoon Real Estate