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If you’re purchasing a condo, it’s important to understand its history. Knowing what happened in the past can help you prepare for the future. Here are 5 things you need to know about your condo’s history:
#1 History of Special Assessments & Condo Fee Increases
If you’re buying a resale condominium, it’s important to understand the history of special assessments and condo fee increases in the building. How does the board normally handle unexpected and increasing costs? How big and how often do assessments and/or increases happen? The status certificate will contain information about recent and planned changes, and the property manager and/or board can provide a wealth of information.
#2 History of Major Repairs to Major Systems
All condominiums will undergo major repairs at some point, but knowing the kinds of repairs that happened, why, and when can help you better understand any ongoing issues and predict future ones. For example: if a condominium has a history of elevator breakdowns, you’ll want to do a lot of due diligence before buying a unit on the 40th floor (unless you really like walking up and down stairs).
#3 History of Common Element Renovations
When were the hallways, entrance, roof and shared amenities last updated? Smart condominium boards regularly update the common elements to help maintain the desirability of the building and protect against future damage. If they are in need of renovating in the short term, have your lawyer check to make sure that there’s enough money in the reserve fund to cover the costs.
#4 Sales History
Unusually high turnover in a condominium is usually indicative of a problem. If the turnover is unit-specific, it might be due to issues with a bad neighbour, challenging maintenance problems or the unit’s location within the building. For example, some condo units are located really close to garbage chutes/elevators/the party room or may overlook a noisy bar – that might be driving people away. Unusually high turnover in the condominium building (vs the unit) might be do to safety issues in the building, concerns about the neighbourhood, structural or other serious issues with the building or might be due to poor management by the board or property manager.
#5 Insurance Claims History
If a condo building has a history of insurance claims, it can be an indicator of potential issues or damage. Too many claims for water damage, fires, or crime increase insurance rates, which form part of the condo fees you pay. We’ve even seen condominiums in Toronto that had so many insurance claims that they actually LOST their insurance.
Much of the information you need to know about a condo’s history is contained in the status certificate – we wrote a whole blog about understanding status certificates here. If you can’t find the answers you’re looking for there, you or your agent should dig deeper by speaking with the listing agent, the property manager, the condo board, and/or current residents. The answers are out there!