When purchasing a condo, it’s as though you’re buying into a business or corporation. If you were planning on purchasing a business, you would do your due diligence and find out everything you can about the company. What is its income? How much are the operating expenses? Are there any upcoming large expenditures? Any pending lawsuits? The same applies to buying a condominium.
When purchasing your condo, along with your Property Inspection, it’s important to get the Condo Documents professionally reviewed.
The review of the Condo Documents is actually an automatic condition of sale when purchasing a condo in Alberta. This provides the buyer an opportunity to review the following documents:
(The seller needs to provide the following documents to the buyer before conditions can be waived. If you are thinking of selling, make sure you have the following documents, or request them from your Property Management Co.)
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1. Copy of bylaws of the corporation
2. Copy of the most recent financial statements of the corporation
3. Copy of the budget of the corporation
4. Statement setting out amount of monthly contributions and basis on which that amount is determined
5. Copy of minutes of a general meeting of the corporation or board for past 12 months
6. Copy of the insurance certificate
7. Copy of any lease agreement/exclusive use agreement with respect to the possession of a portion of common property, including parking stall or storage unit
8. Particulars of, or copy of, any subsisting management agreement
9. Particulars of, or copy of, any subsisting recreational agreement
10. Statement setting out structural deficiencies that the corporation has knowledge of
11. Statement setting out the amount of the capital replacement reserve fund
12. Copy of the most recent reserve fund report
13. Copy of the most recent reserve fund plan
14. Particulars of any post tensioned cables located anywhere on/within the
15. Statement setting out amount of any contributions due and payable in respect
16. Particulars of any action commenced against and served on the corporation
17. Particulars of any unsatisfied judgment or order for which the corporation is liable
18. Particulars of any written demand made on the corporation for an amount in excess
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It is very important to review these documents carefully. It is strongly recommended that you use a professional condo document review company.
The following two links are Calgary Herald articles regarding the Edgecliff Estates condominiums and their $10M repair bill (which was passed onto the condo unit owners as a Special Assessment)
I think it’s important to highlight the following excerpt from the articles above:
“Problems at the northwest complex were detected at least 17 months ago.” Bernie Winter, who owns Condo-Check, which looks over documents and reports for prospective condo buyers, said her company found damage at the complex in September 2006. “All of these things were clear way back then,” she said.
All the recent buyers in that building had the opportunity to review the documents and it’s obvious they missed some very important facts presented in those reports. Granted, some problem may arise afterwards that were not present at the time of purchase. But by availing yourself to a professional document review service, you’ll avoid any trouble that has already surfaced.
Below are two professional Condo Document Review service providers, and more can be found in the Yellow Pages.
Last night, there was a rerun of the CBC News Marketplace episode: Condo Crunch If you’re thinking of buying a new condo, watch the video first!
Remember, protect yourself and don’t take anything on word alone. If you have any questions about buying or selling a condo, please feel free to contact me.
Mike Fotiou
First Place Realty
Realtor®, & Certified Condominium Specialist
www.FindCalgary.ca
