Buying your first condo: the numbers nobody adds up

Condos are a good answer for a lot of people. They are also the property type where the important information is least visible from the showing.

The status certificate

Ordered during your conditional period and reviewed by your lawyer. It is the corporation's disclosure package, and it tells you what you are actually buying into.

What matters in it:

• The reserve fund. The savings account for major repairs. Roof, elevators, windows, garage membrane. A thin reserve on an older building is the clearest warning sign there is.
• Special assessments. Any that have been levied, and any that are being discussed. This is a bill that lands on owners when the reserve does not cover something.
• Fee history. Fees rise. The question is whether they have risen steadily and sensibly, or been held artificially low in a way that is storing up a problem.
• Rules and by-laws. Pets, rentals, what you can do on the balcony, whether you can renovate.
• Litigation. What the corporation is involved in.

Parking and locker

Owned, exclusive use, or rented. These are different things with different value and different transferability. It is on the listing, and it is worth confirming rather than assuming.

The number that actually matters

Buyers compare condo fees between buildings as though the fee is the cost. It is not. Two buildings with different fees can cost the same to live in, because what the fee covers is different.

Add it all up. Mortgage, condo fee, property taxes, and then whatever the fee does not include. Heat, hydro, water, internet, cable, parking, insurance for your own unit. That total is what you live with every month, and it is the only number worth comparing between two buildings.

A higher fee that includes heat, hydro and water is often cheaper than a lower fee that includes none of them.

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Written by Mike Elsey, Broker, Royal LePage Real Estate Associates, Brokerage. General information about the process in Ontario, not legal, financial, tax, insurance or inspection advice.