Ready to be a co-owner?

Often it’s less expensive to buy a condo than a single-family home. However, when you become a co-owner you also become a real owner! This means you need to have funds to maintain your condo.

Condo fees and a reserve fund

Both are essential. Condo fees allow the condo corporation to take care of regular maintenance to the building, while the reserve fund ensures all co-owners there are sufficient funds when major repairs are needed. Don’t cut corners when it comes to paying into these accounts. This will avoid losses and unnecessary worries.

When the condo corporation carries out preventive maintenance or repairs, the risk of loss is significantly reduced and, in turn, contributes to keeping premiums under control. And, since the corporation is required to preserve the assets of all the co-owners, that’s another reason why maintenance expenses are essential.

Condo fees and an adequate reserve fund also reflect the sound management of your condo building and are major assets when it comes time to sell.

Are you ready?

"I bought a condo because it was all I could afford"

Hold on a second! Despite the often affordable purchase price, being a co-owner also means you have to pay other expenses in addition to the purchase price, like maintenance fees, and contributions to the reserve fund.

"I’ve had enough of maintaining my house… long live co-ownership!"

True, a third party looks after the maintenance. However, you must make sure that the condo corporation ensures the work is done on time and appropriately. Since there are no regulatory controls in place for the administrators, better make sure they’re running things well. Check out the work that’s been done since the condominium was built and look into the accumulated reserve fund for future repairs.

"I don’t want any problems so I made sure I have adequate insurance coverage"

That’s all well and good! However, the condo corporation must also have adequate coverage for the building and the common portions. It must also have the funds needed to pay current accounts (condo fees) and cover future expenses to maintain the property (reserve fund).

Check with your broker or agent about the coverage you need so that you’re adequately insured in case the corporation does not have the required funds and you need to contribute financially.

"A condo is an interesting investment"

It is possible to maintain, or even increase the value of a condo, provided the building is well maintained, well run, and has an adequate reserve fund. In other words, you could make a good investment if your assets are well protected!