The other day EKAN Inspections did a condo inspection report for a +55 client in Gibsons. I never assume to know a client’s sensitivities and always ask for what specifically concerns them. In this case the buyer was downsizing from a house and moving from the Lower Mainland to the Sunshine Coast. Their top concern was living on a fixed budget and not being surprised by major expenses. The condo solution was perfect for them because there was no exterior maintenance for them and had ‘lock-and-go’ security for a Snow Bird lifestyle.
This condo’s interior did not have any major issues. Rental property managers use rules of thumb for unit maintenance costs, such as allocating 5-10% of monthly potential rental income to a maintenance budget. A condo owner would do well to make a similar allowance.
However, the common areas in the building were another matter. As the building was over 30 years of age, it was showing signs of wear and all was still original. The really big ticket repair and replacement items are usually found in the common areas: the roof, mechanical systems, exterior building envelope, structure and parking surfaces.
At EKAN Inspections we report on the condition and life expectancies of the above systems. You would think that is sufficient for the purchasing decision for a strata property. But it is not!
And now for the rest of the story.
It is really up to the buyer to do their due diligence by reading the quarterly strata council meeting minutes, the AGM minutes, discovering if there are any special assessments likely, deciding if the monthly condo fee is adequate for the annual maintenance and contingency budgets and reviewing other documents such as a property depreciation report if available. The buyer’s agent has a duty of care to provide this documentation, but not necessarily review it. After all, to one buyer an older building represents a discounted purchase price opportunity; whereas, to another buyer it can be financial ruin if there is a $40,000 special levy that’s required to replace the boilers and elevator.
Dry reading for sure, but it’s the ‘devil in the details’. EKAN Inspections does provide documentation review services of strata properties to our clients, upon request and as an extra service.