After the last little while of working with clients looking for condos in Winnipeg, it dawned on me that there are a lot of misconceptions out there regarding the process of purchasing a condo, and how it is different from that of purchasing a home. Below is just some information I have gathered from my experience and perspective. It is in no way a complete guide to condo buying in Winnipeg, but perhaps it is a start to some questions you may have.
Lets start with the basics. Condos differ from houses with their definitions of ownership. In a house you own, as long as you hold complete title to the home, you simply own the whole thing. In a condo, you own completely the unit you live in, but any and all common areas are co-owned by everyone in that condo building or condo project. A hallway, pool, parking lot or courtyard are all common areas because all people who live there have access to them. As a result of the common area aspect, there has to be some money put aside every month to maintain them and put repairs in when things need to be replaced. This is where the idea of condo fees comes in. Certainly this is not a lengthy explanation of condo fees and how they work, but will give you the basic concept. Condo fees are based on a case by case basis and can be anywhere from $100 to $450 monthly, and is not even limited to that amount. Condos by their very nature can be different, some are apartment style, some are townhouse style. Therefore, different condo fee structures apply. The monthly fee that you pay as your condo fee covers the cost of a few different things. Some money is put toward the reserve fund and some for the management of the condo as most condo boards can employ a management company to be in charge with the condo board. Other things that may be included would be maintenance like grass cutting and snow removal. Occasionally things like heat, cable tv, parking, water, etc are included but not always. To be sure about your condo check with the listing form to see what the exact inclusions are. Never ever assume that one condo has the same inclusions as another, in fact it is safer to assume that each is completely different.
Another major fee that could potentially apply to you as a condo owner is something we call a special assessment. It has also been referred to as a cash call. This does not always happen, and in fact could possible never happen in the time you live at that condo. An example of how this could happen is the roof of the condo building needs to be redone, perhaps they take some money from the reserve fund, but if that doesn't cover the cost it will be up to the condo owners to come up with the balance. This can be ANY amount and may mean a one time fee of $1500 or a year fee of $1000 that runs for three years. There are many scenarios that could arise out of a special assessment and it is important to get all the facts you can. The great news about this is that if the condo board knows they will be doing repairs and a special assessment is in the future, this info has to be disclosed to potential purchasers in the 48 hour cooling off period (I will explain the 48 hours below). So as long as the condo board has made the decision it will be disclosed to you and you can decide if it works for you or not. Hopefully you are made aware of any repairs needed before you buy, and not after you move in!
Condo documents, or condo docs as we call them are our information gateway into the runnings of this condo and its board. It includes, but not limited to: by laws, rules, financial statements, status certificate, minutes from board meetings and disclosure statements. This information is valuable. Usually myself and the lawyer will look over the condo docs for you to see where things are, but some buyers like looking through these things as well.
The 48 hour cooling off period. This is put in place for the protection of the buyer's interest. Basically how this works is: The offer you put in on the condo is accepted, as soon as possible the agents will exchange the condo docs and the receiving of those docs is in writing by you the potential buyer. From the time those docs are received the 48 hour cooling off period starts. This is the time to get all the info from the condo docs. If you are happy with everything, then that is great. If you find something in the documents that you are not happy with, like a cash call for example, then you have the right to cancel the purchase of the condo unit. This MUST be done within that 48 hours so make sure to ask the questions that are important to you about the condo docs in that period. Once the 48 hours lapses, and all conditions are satisfied then you have officially purchased the condo! Congratulations!
For any questions on purchasing or selling a condo in Winnipeg, please be sure to contact me!
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