5 Red Flags to Watch For When Buying a Condo
Purchasing a condo is an exciting life event. Before you even move in, your head begins to fill with ideas about how you’ll utilize your new space and make it your own. You might be ecstatic to enjoy your spacious balcony, or impatiently waiting for the moment you can host family and friends in your new, modern kitchen. Whatever excited you most about a potential unit, one thing is for sure— condo buyers often can’t help but get swept up in the process.
But while it’s normal and expected for condo buyers to feel encouraged about their move, it’s also important to be attentive and deliberate during the search for a new place to call home.
All too often, soon-to-be condo owners invest in a property while wearing rose-colored glasses, only to realize after they’ve moved in that not everything is as it originally seemed.
But what are the most concerning red flags when buying a condo? What, exactly, should condo buyers be looking for?
We’ve compiled a list of warning signs for potential buyers to keep in mind.
1. High Condo Fees
This is easily one of the most critical condo red flags. It is important for condo seekers to consider HOA fees before signing on the dotted line for a unit. Ask your realtor to put together a comparative analysis of condo fees in a particular area. How do the fees for your desired condo stack up against similar units in the same neighborhood?
If the fees are significantly higher than other options, it could be a sign that the condo board or management company is misusing funds or that there was a significant maintenance project that drained the community reserve fund.
2. Special Assessments
A special assessment is, essentially, a sum of money paid to a condo board or management company to cover the cost of unforeseen expenses.
To determine if the condo community you’re interested in has had a high number of special assessments, you just need to know what to ask during a condo tour.
Current condo owners are required by law to inform potential buyers if there is an outstanding levy on their unit. Additionally, condo associations must provide a record of any past special assessments if it is requested.
Speak to your realtor or lawyer about obtaining a copy of the condo documents for any unit you are interested in purchasing.
3. Poor Meeting Minutes
For those wondering what to look for when buying a condo, meeting minutes are important to remember.
If a condo association has a habit of keeping scant meeting minutes, it may be a sign that the board isn’t functioning as well as it should be.
Fortunately, condo buyers can request a copy of meeting minutes before making the decision to invest. Some condo communities charge a fee for this service while others don’t. Either way, it’s worth getting your hands on a copy, since reviewing meeting minutes is the best way to learn about any problems or disputes the community has had.
4. Reluctance to Provide Information
Of all the condo red flags, this may be the most ominous. The refusal to share documents, reports, and other pertinent information is a sure sign that something is amiss.
A thriving condo community would be more than happy to open their books and provide details to interested condo buyers.
If you detect even a hint of resistance, be sure to do some deeper digging until you get all the answers you need.
5. Unhappy Tenants
It is always a good idea to speak to other condo owners in a specific building or community before you move in. Ask them what their experience has been with the condo board, how long they’ve lived on the premises, and whether or not they have any complaints.
Sometimes, the experience of others is the best predictor of what your own experience will be.
On the other hand, it is also important to note that bad apples exist everywhere. If one neighbour has a long-list of complaints while three others have nothing but positive remarks, it is most likely that one neighbour has a tendency to be negative.
Ask around before forming a final opinion!
Ultimately, it is up to condo buyers to do their due diligence and protect themselves.
Buying a home is an exciting—but also consequential—decision.
If a condo board or management company is operating inappropriately, they may do their best to cover up red flags in condo documents or make it difficult to obtain the information you require.
Our advice? Assemble a team you can trust (realtor, lawyer, document reviewers, etc.), come prepared with a checklist, and take your time.
The excitement will be there no matter when you move in! But red flags can completely ruin your future living experience.
Looking for properties governed by a condo management company that truly cares? Contact us today. We’d be happy to tell you more about our communities!