Buying a condo is exciting, but be mindful when doing your due diligence as not all condo buildings are created equal. Some may have issues like leaks, financial difficulties, pet restrictions or age limitations. It’s important to do you research and inspections when buying into a condo building (and strata) to make sure you don’t buy a bad one. Below are some tips for purchasing a condo in Vancouver.
Here are 8 tips for buying a condo in Vancouver
Unraveling the Enigma; Obtain the strata council minutes for two years and any engineering reports available. Dive into these documents like a detective searching for clues regarding leaks, repairs, problematic tenants/owners, furry companions, upcoming financial contributions and more. This is your chance to uncover the truth!
Tips on Reading Strata Documents
Ask for the last 2 years of Strata Corporation’s Documents including AGMs, SGMs all Strata Council meetings, strata plans and PDS and Form B. Your Realtor should order all of these for you, but if you are representing yourself in the purchase (not recommended) or have hired a real estate lawyer to complete the transaction for you, then you’ll need to read through all these documents and give your lawyer a copy. This will help immensely when you’re deciding whether or not to purchase the condo.
Building Inspection – Yes, You Need to Get One!
Before hiring a building inspector, take a look at the unit and the building yourself even if you’re not an expert in construction. Look out for signs of leaks like stains on surfaces, efflorescence in the parking garage, cracks in walls or indications of repairs. Thoroughly explore every nook and cranny of the building.
What’s a Property Disclosure Statement?
Take the time to review the Property Disclosure Report, also known as the Property Disclosure Statement (PDS) which has been completed by the owner. It’s their responsibility to disclose any known issues or problems with the unit. This could prove to be the most important of the 8 Tips to buying a condo if there’s an expensive fix coming up stemming from an issue contained on this disclosure.
Financial Statements
Obtain the statements for the Strata corporation from the last 2 fiscal years. These statements reveal information such as how much money’s available in the contingency reserve fund (CRF) for unexpected repairs. Look out for signs of management and ensure that expenses align with the estimated budget. Remember, ideally the CRF should hold 25% of the operating budget and there should be a requirement to contribute 10% annually until that target is met.
Strata Rules
Get your hands on a copy of the Registered Bylaws and Rules of the Strata corporation. Read through these documents to discover any restrictions, age limitations, rental constraints or other factors that may impact your future plans. Knowledge is power!
Terms to Include in your Offer
Make sure to include terms, in your purchase and sale contract that allow for an inspection, review of bylaws, access to two years worth of strata council minutes (as required by law) engineer reports, financial statements and the Form B. By incorporating these terms you’ll have the flexibility to walk away if the condition of the building its financial prospects or any restrictions in the bylaws and rules don’t align with your goals. Remember, you’re in control!
Property Transfer Tax
When purchasing property in British Columbia it’s important to be aware of the Property Transfer Tax unless you qualify for exemptions like the First Time Home Buyers Program. The tax rates are as follows; 1.0% on the $200,000 of the price; 2.0% on amounts between $200,000 and $2,000,000; 3.0% on amounts between $2,000,000 and $3,000,000; and 5.0% on amounts over $3,000,000.
There you have it! Armed with these 8 Tips to buying a condo, you’re now ready to embrace the excitement and start on your condominium hunt here in Greater Vancouver!
