Buying A Resale Condo

 

Ovation        

Why Buy a Resale Condo?

Simply put, buying a resale unit falls into the principal of "What You See Is What You Get", in a time frame that works for you.  There should be no surprises.

  • You will also be buying and selling within the same market which protects you from buying in an up market and then having to sell your current property in a down market. 
  • You set the time when you want to move and can co-ordinate the date to suit your needs. 
  • A resale purchase, 99% of the time, will close without delays.  But just in case, as your Agent. I would provide you with closing insurance to protect you from any unforeseen expenses if closing is delayed.

 

Reserve Fund

One of the most important aspects of purchasing a resale condominium is ensuring that there is a healthy Reserve Fund.  This is a contingency fund to finance major repairs and keep the building in good shape. Every condominium is required to have a professional study of the projected costs for such maintenance.  A portion of the monthly maintenance fee is allocated to the Reserve fund and kept in a separate account.  If major repairs are required, they are paid from the Reserve fund. 

In the event that an emergency or unexpected cost arises, that cannot be covered from the Reserve Fund, the Board may require each owner to pay a Special Assessment.  This could run in the several thousands of dollars, depending on the nature of the repair and how many units are paying for the repairs.

It is important that a buyer has the opportunity to review the health of the Reserve Fund before purchasing.  This is so important that your offer to purchase should always have a condition that allows the Buyer's Lawyer to review the financial statements contained in the Status Certificate before the offer is finalized.  If anything shows up in the report, you can be released from the purchase.  Failure to check this out thoroughly could be very costly.

Status Certificate

When your agent asks for a Status Certificate, it includes the information on the Balance Sheet for the Condominium which includes the Reserve Fund information.  It also contains information on other things that need to be reviewed before deciding whether or not you want to purchase a unit in the complex such as insurance on the building and if there are any lawsuits filed against the complex.  You will also receive a copy of the by-laws and any Rules and Regulations that you should know about before you buy - such as restrictions for pets.

Why Do Older Buildings Have Higher Maintenance Fees?  

Firstly, older buildings tend to have larger square footage and the larger the space the larger the fee. Secondly, the law requires all buildings to have a Reserve Fund sufficient to cover ongoing maintenance for the foreseeable future plus unexpected expenses.  In some older buildings a required study of estimated future costs for on-going maintenance uncovered the need to increase the Reserve Funds in order to ensure there would be sufficient funds in the future.  The concept is to put a little more money into the Reserve Fund today to reduce the possibility having to pay a potentially large special assessment in the future. 

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