# Need help with buying a condo



## balk (Dec 6, 2010)

I am in the process of buying a condo and I have received the condo aggreement minutes. I am wondering what I should be looking for in the condo finance reports and in the minutes. I would appreciate any help and suggestions.


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## Sampson (Apr 3, 2009)

Healthy reserve fund.
No large expenditures/repairs planned (e.g. need for chronic repairs).
Reserve fund study (should give you an idea of pending repairs/issues).
Evidence of difficult owners, infighting and bickering.
Responsible and accurate annual budgets.
Any specific issues pertaining to your unit (previous repairs etc.).
Proportion of owners living at the complex, vs. those renting units out.

Just a few ideas.


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## GeniusBoy27 (Jun 11, 2010)

Sampson said:


> Healthy reserve fund.
> No large expenditures/repairs planned (e.g. need for chronic repairs).
> Reserve fund study (should give you an idea of pending repairs/issues).
> Evidence of difficult owners, infighting and bickering.
> ...


+1

Sampson has it right. The other thing is I would do a title search on your own unit prior to purchase to know what has been down, and who lived there previously prior to it being bought.

You do want to look at the reserve fund study, and projects, and compare it with the current reserve funds. The other things I would also look at is the insurance on the entire condo building.


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## LondonHomes (Dec 29, 2010)

Sent it to your lawyer and have him or her look it over. It's one of the services your lawyer should be an expert at and something worth paying for.


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## frugalmini (Feb 19, 2011)

GeniusBoy27 said:


> +1
> 
> Sampson has it right. The other thing is I would do a title search on your own unit prior to purchase to know what has been down, and who lived there previously prior to it being bought.
> 
> You do want to look at the reserve fund study, and projects, and compare it with the current reserve funds. The other things I would also look at is the insurance on the entire condo building.


I wonder why does the previous owner matters. 

Thanks,


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## K-133 (Apr 30, 2010)

LondonHomes said:


> Sent it to your lawyer and have him or her look it over. It's one of the services your lawyer should be an expert at and something worth paying for.


Best advice of March 2011.


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## Sampson (Apr 3, 2009)

Lawyers won't get into the nitty gritty. Why would you pay someone $200-$500 / hr to do this anyway?

They will determine if there are caveats or any other major issues that can crop up during title transfer, but they won't identify if there is a $200k roof repair that is unscheduled, however, this will show up in the minutes. Nothing worse than buying a condo, then getting a $20k special assessment a month later.

As an owner, you need to be aware of how the condo is being run, better yet, get involved with the board so you can make the decisions.


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## arie (Mar 13, 2011)

*condo*

wrong guys ; i believe the document you refer to as minutes is the estoppel or status certificate

this is part of what your lawyer reads to confirm whether you should buy or not -- its part of the purchase process

as far as looking at title this is definitely the lawyers job and if you wnat to get into doing this work good luck but you are foolish


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## K-133 (Apr 30, 2010)

Sampson said:


> Lawyers won't get into the nitty gritty. Why would you pay someone $200-$500 / hr to do this anyway?
> 
> They will determine if there are caveats or any other major issues that can crop up during title transfer, but they won't identify if there is a $200k roof repair that is unscheduled, however, this will show up in the minutes. Nothing worse than buying a condo, then getting a $20k special assessment a month later.
> 
> As an owner, you need to be aware of how the condo is being run, better yet, get involved with the board so you can make the decisions.


Sampson, condominium management is in many ways strictly regulated. Budget representation is among those things. A lawyer is trained to understand the documents presented through the condominium's status certificate. I think one would be foolish not to spend $200 for the assurance that there is no major work scheduled that is not accurately reflected in the budget. If there is a $200,000 roofing job scheduled, it will be reflected in the status certificate, and one's lawyer should be able to assess whether it is accurately reflected. Conversely, if there _may_ be the need for a $200,000 roofing job, it may or may not be reflected in the status certificate.

Overall, I think its a small price to pay considering the relative scale of the investment.


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## Sampson (Apr 3, 2009)

I've only dealt with real estate lawyers 3 times, twice with respect to a condo. Not once were they happily willing to look over the docs. When I insisted, it was a surface treatment and definitely not worthwhile.

Things are not as 'regulated' as you suggest. I've acted as treasurer, secretary and vice-pres on my condo board and I'll tell you there is no way for a lawyer to know any of the ins and outs of what the corp is going through.

Minutes may not be fully reflective of discussions, and often things are left out, intentionally or not. There are also no requisites on quality of these documents.

A lawyer will also not give you any clues on how the corp is run. It isn't run by professionals, just your neighbors, and their personalities are reflected on how they choose to run the corp. Will the lawyer tell you that the Board is focused on keeping the building pretty, or warn a potential buyer that the condo has had issue with a bad neighbor? The potential buyer needs to find this out because lawyers will never give qualitative advice on these types of topics.

I don't think we disagree that the docs need to be studied, it is more a question of who is the correct person to do it. There are people out there you can pay to study condo documents, and they aren't lawyers. It is also something that any reasonable and concerned individual/potential owner can do by themselves.


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## sk76driver (Mar 17, 2011)

*my advice*

Get out of the deal and wait. Prices will be dropping in the next year.


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## kcowan (Jul 1, 2010)

I agree that this is an example of due diligence in a prospective purchase, and delegating this to a lawyer is asking for trouble. Lawyers look for legal stuff, and a pending major expense would not qualify.


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## balk (Dec 6, 2010)

Hey Guys,

Thanks for all the help and advice. I have spent the past few days reading over all of the documents plus I have sent them to our notary to look at. I also called up the president of the condo association. He seems extremely competent and was very happy to spend an hour on phone with me. The building was built in 2008, at which point he had an architect come in and inspect it to see if there were any issues that needed fixing while it was still under the APCHQ warranty. There is also a 25 year plan for the condo with condo fees set out and all of the future renovations planned. 

Cheers,

Balk


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## GeniusBoy27 (Jun 11, 2010)

About previous owners -- I like to know the selling prices of previous units, when they got it, and calculate appropriate appreciation. It's information and more information always helps when negotiating.


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## Beleriand (Jan 31, 2011)

Great and helpful analysis!

Every idea presents something like "wall" against the deception.



Sampson said:


> Healthy reserve fund.
> No large expenditures/repairs planned (e.g. need for chronic repairs).
> Reserve fund study (should give you an idea of pending repairs/issues).
> Evidence of difficult owners, infighting and bickering.
> ...


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## GeniusBoy27 (Jun 11, 2010)

The other thing that has been helpful in a previous title search, was how previous condo units were merged, which led to looking at plans municipally and determining the accuracy of the size of a unit (for example, part of a unit was behind a wall). What the owner sent me in a map wasn't what it actually was. Of course, that led to renegotiation on a price, which saved me lots of money.


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## LondonHomes (Dec 29, 2010)

balk said:


> Hey Guys,
> 
> Thanks for all the help and advice. I have spent the past few days reading over all of the documents plus I have sent them to our notary to look at. I also called up the president of the condo association. He seems extremely competent and was very happy to spend an hour on phone with me. The building was built in 2008, at which point he had an architect come in and inspect it to see if there were any issues that needed fixing while it was still under the APCHQ warranty. There is also a 25 year plan for the condo with condo fees set out and all of the future renovations planned.
> 
> ...


Sounds like your going ahead with the Condo purchase then. Congrats on your new home!


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## greeny (Jan 31, 2011)

It appears to me that the buying of condo isn´t very easy. You have to analyze every possible situation of ahead of time. I don´t say about the concrete advice, because my previous colleagues told each kind of the view. Good luck balk!


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## coffeetalk (Apr 15, 2011)

You need to check a lot of stuff. There's new info if you are planning to buy a condo in Ontario on their website. 

http://www.sse.gov.on.ca/mcs/en/Pages/Condos.aspx

OR if you want to buy a house

http://www.sse.gov.on.ca/mcs/en/Pages/video_kyr_buying_a_home.aspx


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