Buying a Condo? 7 Things We Pay Attention to Before You Remove Subjects

Buying a condo is about much more than the suite itself.

The kitchen, layout, view and location may be what first attract you, but some of the most important information about a property is found in the strata documents. Before a buyer removes subjects, we spend time looking for anything that could affect future costs, enjoyment of the home, or resale value.

Here are seven areas we pay particularly close attention to.

1. The Form B

The Form B is one of the most important documents in a strata purchase. It can reveal current strata fees, parking and storage allocations, outstanding amounts, approved special levies, legal proceedings and other important details about the strata lot.

It is a good starting point — but it should never be the only document reviewed.

2. Depreciation Reports

A depreciation report gives us a long-term look at the building’s major components and anticipated repair or replacement costs.

We look at items such as the roof, windows, plumbing, elevators, balconies, parkade membranes and building envelope. Just as importantly, we compare the report with the strata’s current financial position and recent minutes.

A building can have a long list of future projects without necessarily being a concern. The bigger question is whether the strata appears to be planning and funding for them responsibly.

3. AGM and Council Minutes

Minutes can tell you a great deal about how a building is being run.

We look for recurring issues, major repairs, owner complaints, insurance matters, leaks, noise concerns, legal disputes, maintenance plans and anything else that appears repeatedly.

One isolated issue may mean very little. A pattern is more important.

4. The Contingency Reserve Fund

The Contingency Reserve Fund, or CRF, is money set aside for larger repairs, replacements and emergencies. 

A healthy reserve does not guarantee there will never be a special levy, but it can give the strata more flexibility when major expenses arise.

We look at the size of the fund, recent withdrawals, upcoming projects and whether the current contribution level appears realistic.

5. Insurance

Strata insurance has become an increasingly important part of condo due diligence.

We review the building’s insurance coverage, deductibles and any unusually high deductibles that could potentially affect an owner.

Buyers should also confirm that their own condo insurance will provide appropriate coverage, including deductible assessment coverage where needed.

6. Bylaws and Rules

Bylaws can have a direct impact on how you use your home.

Pets, rentals, smoking, renovations, flooring, barbecues, age restrictions, parking and move-in procedures can all be governed by the strata.

Never assume that because something is common in one building, it will be permitted in another.

7. What Work Has Been Done — and What Is Still Coming

This is where all the documents start to come together.

A depreciation report may identify a future project, while AGM minutes may show that it has already been completed. Or the minutes may reveal that a project has been discussed for several years but still has not moved forward.

We try to establish not only what the building needs, but also what has already been completed, what is planned next, and how it may be paid for.

The Goal Isn’t to Find a “Perfect” Building

Every strata has maintenance issues eventually.

The goal is not to find a building with no future expenses. It is to understand what you are buying, identify potential risks and make an informed decision before you become committed to the purchase.

That is why subject removal is such an important stage of a condo purchase. It is the point where good due diligence can make a very real difference.

If you are considering a condo purchase, we are always happy to help you understand what the documents are actually telling you — and what questions are worth asking before you move forward.