The home buying process can be exciting and fun or it can be a time of stress and anxiety. This is greatly affected by what process or plan you have implemented. It will also depend on the type of Home Ownership you have decided to pursue.
There will be common factors like:
- Establishing your budget and Level of Risk Tolerance
- Getting Pre Approved
- Contact Your Real Estate Professional
- Determining Wants and Needs
- Review of properties currently available
- Physical introduction to suitable properties.
- Educating yourself on neighbourhood and surrounding area.
- Shortlist Properties
- Make Conditional Offer on preferred Property
- Review of Documentation
- Arrange Inspection
- Remove Conditions
- Complete Purchase
- Move in.
Step 10 is pretty straight forward when buying a house because you will only be reviewing about 5 to 7 documents depending on the property. Purchasing a strata titled property (Condominium) is much more complicated. You will need to ensure your plan includes a review of all Strata Documentation. Your Real Estate Professional will be able to guide you through this part of the home buying process.
Home Buying Process – Documents To Review
- Title: What is registered against the title and how might it affect your property. Restrictive Covenants or Easements, and Rights of way will remain on the title so know what they are for.
- Occupancy Permits: Has all work been completed and an occupancy permit provided.
- New Home Warranty: If the property is newer (less than 10 years old) it should have some New Home Warranty coverage.
- Developer Disclosure: If it is a new building or owned by someone who owns more than 5 units a Disclosure Statement may be available.
- Strata Property Disclosure Statement: The Owner will have completed this disclosure letting you know more details.
- Strata Plan: This one is key to understanding what it is you are actually buying.
- Bylaws: Even in the simplest of Strata’s there is a set of Bylaws. Strata’s can have restrictions as to Children, age, Pets, business etc. Know what they are before you buy.
- Strata Plan General Index: Bylaws, designations of Limited common property can change. These need to be registered in order to be valid.
- Form B (Information Certificate): The Strata Council will issue the form b and provide information on Parking, storage, contingency reserve, etc. It is important to compare this info to other info you receive. We once received documentation saying the parking was Common Property when the Strata Plan correctly identified the parking as Limited Common Property. There is a difference.
- Form F: Usually obtained to ensure payment of strata fees is up to date.
- Depreciation Reports: Became mandatory in BC on December 14 2013. Not all strata’s will have one since they are still able to waive the requirement by a 2/3 vote at a strata meeting. If one is available, this can be a very valuable document in your decision making process. These documents are typically long (40 pages) and include a broad range of information.
- Engineers Reports: If there are any, you want to have the opportunity to view them. They will cover structural and geological issues of a strata.
- Inspections: The Depreciation Report is a big inspection of the entire strata. An inspection will reveal any short comings of the Unit itself. These could be leaks under the sink, tub enclosures, electrical deficiencies etc.
- Minutes of Strata Meetings: Whether AGM’s, council or special meetings these documents are important. They will contain correspondence as well which can give an indication if anything odd is taking place.
- Legal Opinions: The form b will tell you if the Strata is involved in any lawsuits.
- Budget and Financial statements: Very important to know the financial strength of the strata.
- List of owners is sometimes available for review as well.
Making major decisions involves going through a process. The home buying process must have a strong plan to be successful. A strong process leads to wise decisions.
Strata Titled Properties and the Home buying Process is our specialty. A complicated transaction can benefit from an experienced guide. Knowing what red flags to look for could save you from grief later on. Please contact us if you are needing help in locating the right property or if you are needing help with your review of your documents.
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We often hear the word condominium shortened to condo. And for many it has become synonymous with Apartment style housing. In this post we will unpack what Condominium really means.
Terminology in Real Estate can sometimes be a bit confusing so when selling or purchasing a property you need to understand what it is you are buying or selling. Condominium is defined as per the Oxford dictionaries as:
a building or complex of buildings containing a number of individually owned apartments or houses.
In British Columbia it also means any property that is part of a strata titled group of properties. This can include; Apartment style, Townhome’s, Duplex’s, Bare Land Strata’s, Commercial Properties and Mixed use Properties. You may not even know what category you are buying!
In British Columbia, these types of properties used to be governed by the Condominium Act. This was replaced with the Strata Property Act and it is the governing authority. You will recall in my previous post
we discussed different types of ownership. It was mentioned that strata ownership represents approximately 50% of all ownership types. This will vary depending on community but it is significant to note that a strata (condominium) transaction is typically the most complicated type of transaction you might ever enter into.
Every Condominium is subject to the strata title act which outlines the responsibilities of the owner as well as the strata corporation. Now the term strata corporation itself needs some defining.
By default, the owners of the condominium are also joint owners of any common property (Assets) of the development. This joint ownership is what is called the strata corporation. The strata corporation is managed by a strata council which acts for the benefit of the owners as whole. It is a common practise for the strata corporation to hire a Property Management company to assist them in ensuring the corporation is run correctly.
Key Areas of Condominium Ownership:
- ByLaws – Every Strata is governed by a set of bylaws. These bylaws are either established by the strata corporation or they are by default the bylaws specified within the Strata Property Act
A common error when buying bare land strata is not recognizing these still apply.
- Strata Plan – The strata plan shows you what type of strata you are involved in and what you actually own.
the ad said your unit came with 2 parking stalls. Do you really own them?
- Engineers Reports & Depreciation Reports – These reports, if available, can be key to making a good decision on whether or not you should buy a particular unit. They are also valuable tools for the Owners in making good decisions on managing their assets.
Knowing when a major asset like a roof or heating system needs replacing is key in budgeting for a strata. Also important as a buyer to know if something major is upcoming and how it will be paid for.
- Financial Statements – Gives you a clear picture of the Financial health of the development and where they are spending money.
A key thing to look for is whether or not the expenditures match the budget. If the maintenance budget is not being spent, are there going to be deferred maintenance issues?
- Minutes of Strata Meetings – These minutes are the records of any Strata Council, Annual General Meetings and Special Meetings. As a buyer you will want to see a minimum of the previous 2 years on record.
Reviewing these documents will help give you a sense of the management of the strata corporation. Does the council overstep their level of authority? Do they deal with things in a timely manner? Are their changes to the bylaws moving forward? Special assessments?
This brief explanation of a condominium and what it means is only meant to alert you to some of the key areas to look at. As mentioned earlier, it is a complicated transaction and you are best advised to seek expert advice.
As a real estate professional I am qualified through education and experience to help you in one of two ways.
- Buying or Selling a Condominium: Able to help you navigate the entire process as your agent.
- Strata Property Review service; A comprehensive evaluation of the key areas identified above. As a Buyer this is important before you make your deal firm. (If we are acting on your behalf as in option 1, this service is included).
Please feel free to contact me at any time should you need any help. And please feel free to comment or share this post.