What You Need to Know About Buying a Condo in Edmonton
When deciding between purchasing a single-family house or a condominium, one of the largest factors is the price. Currently, in Edmonton, there is a surplus of condominiums for sale and are a great real estate investment whether you are a first-time buyer or are looking for residual income as a rental property.
Purchasing a condominium in Edmonton comes with both perks and downfalls, especially if you are not familiar with the history of the condominium. When you buy a condo, you are buying a share in the complex, similar to other investments, you will own a portion of the common area - both capital gains and loses. If you are familiar with what you need to know before purchasing an Edmonton condominium, you are leaps ahead. The first thing you need to know is your money (condominium fees) will be spent.
The bylaws may also play a key part in purchasing a condominium. Bylaws overall are pretty standard, but read them anyway or take them to your lawyer to read. There may be items in there which can be important to a buyer which may have been overlooked. A few examples are: No pets allowed, Extra costs occurred as a rental property, or no bar-b-ques allowed on a balcony. If you have any concerns with the bylaws, feel free to contact the management companies and ask questions.
Depending on the type of condominium you are purchasing, will depend on what the condo fees cover. Sometimes these fees only cover exterior maintenance. Complexes with more amenities such as exercise rooms and pools will always have higher fees due to the maintenance cost of purchasing a condo with several units is, in the event, there is a special assessment on the building, the cost is shared by a larger number of people.
Reserve Fund Study
A Reserve Fund Study is one of the most important documents. With every condominium complex in Alberta, it is now mandatory to have a new Reserve Fund Study completed every five years (New condos are exempt until they are five years). The reserve fund study is a physical study completed on the building and indicates any foreseen structural issues with the building. It is laid out in the same manner as any business plan with predictions of structural deficiencies and repairs and how they will affect condo fees.
There are several documents to review prior to purchasing a condo in Edmonton Alberta. Like any investments, it is extremely important to view the financials of the complex. Below is a list which you should add as a "Satisfactory Review" condition to your purchase to offer.
- a statement setting out the amount of any contributions due and payable in respect of the unit
- the particulars of:
- i. any action commenced against the corporation and served on the corporation
- ii. any unsatisfied judgment or order for which the corporation is liable
- iii. any written demand made on the corporation for an amount in excess of $5,000 that, if not met, may result in any action being brought against the corporation
- the particulars of, or a copy of, any subsisting management agreement
- the particulars of, or a copy of, any subsisting recreational agreement
- the particulars of any post-tensioned cables located anywhere on or within the property that is included in the condominium plan
- a copy of the budget of the corporation
- a copy of the most recent financial statements, if any, of the corporation, including the most recent year-end and month-end statements
- a copy of the bylaws of the corporation
- a copy of the most recent approved and most recent draft minutes of the annual general meeting
- a copy of the minutes and draft minutes of meetings of the board of directors of the corporation for not less than the past 12 months
- a statement setting out the amount of the capital replacement reserve fund
- a copy of the reserve fund report
- a copy of the reserve fund plan
- a statement setting out the amount of the monthly contribution (commonly referred to as condominium fee) and the basis on which that amount was determined
- a statement setting out any structural deficiencies that the corporation has knowledge of, at the time of the request, in any of the buildings that are included in the condominium plan
- a copy of any lease agreement or exclusive use agreement with respect to the possession of a portion of the common property, including a parking stall or storage space
- a copy of the registered condominium plan
- a copy of the condominium additional plan sheet certificate (CADS)
- a copy of the insurance certificate
- the amount of any homeowner association fee
- a copy of any proposed special resolution awaiting a vote
- a copy of any easement, covenants and restrictions (ECR) agreement
- a copy of any other building or site report such as a building assessment report, building envelope report, geotechnical report, technical audit, performance audit
- any other relevant information
We know that buying a condo in Edmonton is a bit more complicated than purchasing a single-family home, that is why, here at RE/MAX, we want you to feel confident with the ins and outs of buying a condo. Never hesitate to call us at 780-237-7074 if you have any questions or concerns during your buying process we are here to help.