Abstract: Davis Bay Home Inspection notes on what are the financial implications for strata owners. Financial obligations extend well beyond the walls of the unit.
Photo: Common roof for complex. The contingency fund should have adequate savings to replace it at the end of its service life. Otherwise all strata owners will have to deal with a special assessment to cover the costs.
Davis Bay Condo
Common Property Inspection
A recent condo inspection highlighted the importance of and the need to do a whole building inspection. This means doing both the private areas (condo interior) as well as the common areas (areas outside of the condo).
Obvious Responsibility
Most buyers appreciate that they are 100% responsible for the care and maintenance of their interior space. Modifications, renovations or repairs to mechanical and electrical systems at at the buyers’ expense.
Normally exterior components of the condo such as windows and decks are considered part of the common property and cannot be modified without strata approval.
Less Understood
Condo buyers are familiar with monthly strata fees. The money collected from all owners is used to pay for the strata property manager, some of the taxes, some of the utilities, as well as expenses and necessary renovations related to all the common areas.
What is less clear is that the monthly strata fee can be changed (increase) annually. This cost adjustment is usually set by the strata council, which is made up of condo owners, who volunteer their time to look after the property.
There may unanticipated costs that could require a major lump sum contribution. For example, the leaking condo syndrome left many owners in a financially difficult position.
Condo Buyers 'On the Hook'
As a condo owner, buyers are 100% responsible for everything that happens in the common areas. Granted, the costs are shared or split with all the other owners.
This is why it’s essential to read and understand the all the strata documents a buyer’s agent will present prior to closing. The minutes of meetings from the strata council, the council’s annual general meeting, the depreciation report, the rules and regulations of the strata are most important.
Your Condo Inspection Outside the Condo
The point of this post is to stress the importance of not overlooking issues raised by the inspection of the common areas. Repair or renovation costs for the common areas may overshadow any condo interior renovation costs.
Some of the most expensive repairs to older strata properties are related to the building envelope, that is, exterior surfaces, windows and roofing. The deterioration of parking surfaces and parkade ceilings is also costly should they need attention.
It would be prudent for buyers to review any common area major issues, identified in the inspection report , with a strata council member.
No surprises is best when deliberating a condo purchase.