Condo Boards: 6 Things You Need to Know Before Moving In

Shopping for and buying a condo is an exciting process – choosing a new home that fits your lifestyle, your design style, and your functional needs. But finding that perfect home is also about ensuring a financially successful investment, and how the property’s condo board operates is an important factor to whether your money - and your new home - will be properly managed.

Read The Building’s Declaration

A condo’s declaration is a charter or constitution outlining the boundaries and common expenses of each unit, as well as declaring proper use of on-site facilities and restrictions on pets. This document is written by the property’s legal team, so it is an official document that can be used in legal proceedings.

It’s also a good idea to review the condo’s bylaws and rules instituted by the board to familiarize yourself with the way the property is managed.

Condo Boards: 6 Things You Need to Know Before Moving In Meeting Minutes ImageAsk To See The Board Meeting Minutes

The contents of these documents will show the items being discussed and if they’re being resolved in an efficient manner. If discussions of finances and spending are included in those minutes, you’ll also see how the board decides how money is spent and what items are prioritized over others.

If you are able, also request to see the monthly financial statements. All condo owners are entitled to that information, so the board should be willing to share the information if you are buying into the property. Remember, if the board is unwilling to share these two items, it could be a red flag that there are discrepancies or questionable actions.

Find Out Who’s On The Board

The property’s board of directors should consist of professionals with business experience and financial literacy. The job of the board is to oversee the general operations of the building on behalf of the owners and to make important decisions about bylaws, rules, maintenance, and finances. While the board oversees these items, the actual day-to-day operations—such as repairs, fee collection, owner management—should be handled by a professional management company.

The board members should at least own a unit in the building; preferably they also live in that unit. If any member doesn’t fit these criteria, it could be another red flag.

Condo Boards: 6 Things You Need to Know Before Moving In Gavel ImageThe Board Makes The Rules

One important job of the condo board is to write and enforce the bylaws and rules of the property. They decide whether things like pets or smoking are allowed, as well as children, and if so what ages - that type of thing.

Many condo boards require written approval prior to renovation work taking place in any condo unit. In a condo property, owners live in very close proximity to one another, often sharing several spaces, so these bylaws are in place to create a safe and comfortable place to live for everyone in the building.

Condo bylaws can and usually do change over time. As condo owners can all vote on these bylaws, if 75% of the ownership votes in one direction, the bylaw can be changed. These changes are effective once they are registered at the Land Titles Office.

The Condo Board Should Have Professionals Involved

Operating a condo property involves issues of finance, law, and sometimes engineering. The board should have professionals skilled in these areas enlisted to help with problems, management of the reserve funds, and ensuring the building itself is safe.

Condo Boards: 6 Things You Need to Know Before Moving In Fees ImageThe Board Can Take Actions For Fee Collections

If any owner in the building fails to pay their obligatory condo fees, there are several actions the board can take to recover those fees.

Some of these actions include:

  • Requesting the funds be repaid by the condo owner’s mortgage provider. These funds would then be added to the mortgage amount owed
  • File a caveat against the unit owner’s title
  • Charge interest of up to 18% per year on the amount owed
  • File a lawsuit against the owner for the amount owed plus interest and legal fees
  • Foreclose on the owner’s title

It’s in your best interest to ensure the condo fees applicable to your new home are within your budget so that your investment in the property is sound.

There are many things to consider when looking at a condo purchase and doing a deep dive into the property’s condo board is a great start. Not only are you buying a new home, but you are making a financial investment where more than one factor affects the value and stability of that investment. Doing your due diligence now will ensure that your new home purchase is the right one.

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Photo credits: depositphotos.com
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