Condominium Ownership ~ WHAT you need to know!

Are ALL real estate agents like this?

Real Estate Industry

Consumer education is not a hallmark of Canada’s real estate industry. Purchasers are commonly warned that insisting on a home inspection may jeopardize their offer, and there is little, if any, formal training in building technology required to become a real estate agent. Explaining the potential pitfalls of a glass condo tower building may be in the best interest of the buyer, but not the agent. How much should real estate agents know about buildings, and how much of this should they divulge to prospective buyers? One way to approach an answer to this question is to compare what real estate agents charge for their services compared to the architects who design the buildings. Typically, real estate agents receive a 5% commission on their sales, whereas architects receive on average approximately 8% of the value of the building as their total fee, which is shared with their engineering consultants. Architects are obliged to know everything about the buildings they design and are professionally liable for errors and omissions. They must also provide expert opinions to their clients for all aspects of the buildings they design.

Why should real estate agents not be required to possess a competent knowledge about the buildings they are selling?

Buyer beware would not be considered an ethical position for architects and engineers serving the public. Compared to all of the work involved in designing and specifying the various components, assemblies and systems that make for a modern building, it is not unreasonable to expect real estate agents to be forthcoming with vital information about the durability and operating costs of the buildings they are selling. Explaining the potential problems associated with glass condo towers that have been identified by technical experts to their prospective buyers, would be no different than a general practitioner explaining the risks associated with certain medications and procedures to their patients. The real estate industry has not taken a proactive approach to such issues yet it is usually the first point of contact for consumers of real estate.

http://www.cbc.ca/toronto/features/condos/pdf/condo_conundrum.pdf

Would you like to talk about Tarion? Reserve Fund Studies or Performance Audits?

I have condo Board experience as well.

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Condominium Ownership WHAT you need to know!

http://www.millerthomson.com/assets/files/article_attachments3/MT_A-Residents-Guide-Living-and-Buying-a-Condominium_A-Loeb.pdf

How are Maintenance Fees Set?

How are Maintenance Fees Calculated?

Total operating Expenses PLUS a commitment of an additional contribution to Reserve ( that’s what we call  the forced savings account)  

Special assessments are extraordinary items that need to be paid for Once announced. Usually these expenses are Amortized over 3 or 4 years and offer owners a PAY it now price. Once a special Assessment has been declared even selling your unit provides no escape.

Money can be borrowed to make capital repairs and is paid for from the special assessments. The Board of Directors need to pass special By Laws to permit borrowing.

Sample budgets include;    * For discussion purposes only

			% of CEF
	Common Element Fee			1,500,000
	Interest & Other			11,400
				1,511,400
Note	Expenses:
3	Gas		4.8%	29,000
3	Electricity		17.2%	322,600
3	Sewer & Water		5.3%	59,700
3	Intercom		0.1%	2,300
4a	Cleaning Contract		6.7%	125,500
4b	Building - Exterior		1.3%	23,700
4b	Building - Public Area		0.6%	11,900
4b	Building - Flooring/carpet		0.4%	7,900
4c	Plumbing		0.4%	7,400
4c	Venting		0.8%	15,000
4c	Air Conditioning		0.7%	12,300
4c	Boiler/Furnace		0.7%	12,300
4c	Elevator		2.5%	46,000
4c	Fire & Safety		0.8%	15,000
4c	Electrical Repairs		0.1%	2,000
4c	Heat Pump		1.4%	25,700
4c	Recycling System		0.1%	2,000
4d	Grounds - Equipment		0.4%	7,300
4d	Grounds - Landscaping		0.8%	15,000
4d	Grounds - Parking Lot		0.6%	11,000
4d	Grounds - Public Lighting		0.1%	1,500
4d	Grounds - Storm Sewer		0.3%	5,000
4e	Paint - Exterior		0.0%	500
4e	Paint - Public Area		0.2%	3,000
4f	Snow Removal		0.5%	9,500
4g	Garbage Removal		0.7%	13,000
4h	Recreation		0.2%	3,000
4i	Janitorial Supplies		0.1%	2,000
4i	Pest Control		0.1%	1,000
5	Staff Salaries/Benefits		0.0%	0
5	Office Expense		0.3%	5,000
5	Communications		0.3%	5,000
5	Interest and Bank Charges		0.1%	1,500
6	Security		16.6%	311,000
7	Management Fee		5.4%	101,800
	Insurance		1.5%	28,300
8	Professional Fees		0.8%	15,000
9	Reverve Fund - Assessements Repair and Replacement		28.0%	500,000
			100.71%	1,511,400
	Surplus (deficit)			$            69.00
	working subtotals			1,500,000

Contribution to Reserve Fund is calculated by an inspection of the Building by Professional Engineers. This report is called a Performance Audit. The receipt of this report calculates the Remaining Economic Life of each building component. The result of this, is the Cash Flow Reserve Fund Study which explains when things will need to be replaced as they wear out and what monies should be on hand.

Reserve Fund Studies will be conducted every 5 years in accordance with the Condominium Act.   Condo Act 1998    This is now being updated with the New and Improved condo act that is pending approval.  Details here  

If you are considering a condo; ask questions.  Understand its a lifestyle and community that you are purchasing.

Humber Bay  and Toronto West Condo's?   Love to hear from you.