Before purchasing or investing in a condo or any type of property you are going to want to make sure that what you’re getting into is a safe investment and your money is protected. Buying a condo is like investing in a business, you are going to want to make sure that said business is financially stable and it is a good idea to lend your money to such a venture. You are going to want to conduct a full Calgary condominium document review of the condominium venture to make sure you know what you are getting into.
Now you are probably wondering what condo docs consist of. They include variety of documents from declaration, by-laws, rules/regulations, financial statements, budgets, and minutes from meetings. These are just some of the documents included but condo docs are not limited to just these documents.
The financial statements and budget contain crucial information on the status of the condo building. You are going to want to pay attention to the condo’s reserve funds and operating budget. A reserve fund is used by condominiums for major repairs and improvements to the building, such as windows, roofing, or flooring. A percentage of owners monthly fees should be put in the fund so that the condo can build up their reserves for future repairs. If your prospective condo has a low reserve fund it will require additional fees when a major repair is necessary. The operating budget is what most of your monthly funds goes towards. Experts say that about two-thirds of the operating budget should be used towards expenses. Owners should pay attention to how your condo fees are allocated and if your condo has a 24-hour front desk, swimming pool, or elevator to name a few things, your expenses will add up, therefore leading to higher fees. Owners should keep in mind that the condo association should not be dipping into the reserve fund to pay for basic maintenance such as trash removal, landscaping, or facilities.
Upon review the condo documents, prospective buyers should get in contact with board members or the property to ask some questions such as; are there any upcoming projects planned?; were there any major issues discussed at the last board meeting?; will projects be paid through reserves or special assessment? These are just a couple questions to ask before purchasing a condo. It is always a good idea to have a team of condominium specialists like Condo 411 Calgary who can help review condo documents and reduce risk associated with the transfer of ownership of a condo unit.