what to look for when buying a condo

| Buying

You find a condo in the heart of your fave neighbourhood with an attractive asking price. You skip the fact it’s been on the market for a while and instead are hyper-focused on the 879 square feet of heaven overlooking the lake with an endless list of high-end finishes. What could possibly go wrong? Plenty!

Let’s delve into the things you need to look for when buying a condo beyond the luxe amenities, killer views, and sweet location.

Beware of the Blacklist

A blacklisted building means big trouble for unsuspecting buyers, including mortgage denials, mortgage insurance refusal, and a higher down payment. There are several reasons banks and lenders “blacklist” a condo, including:

  • Financial woes such as an underfunded reserve fund, a high number of registered liens for unpaid common element fees, or more than one special assessment that forces owners to fork over the money to cover repairs or replacements
  • Structural defects or poorly managed maintenance plans leading to issues from chronic plumbing failure to dangerous electrical systems
  • A disproportionate number of investor-owned units with a higher risk of mortgage defaults but also a less reputable condo community with a risk of illegal short-term rentals and fly-by-night tenants
  • A record of past or ongoing lawsuits against the condo corporation or the developer
  • Condo corporation loans covering underfunded reserve funds or compensating for deficits from common expenses
  • An unusually high number of unit foreclosures
  • Liens against the property
  • Depreciating condo value

Oh, and one last thing: all the above issues also mean difficulty when it comes time to sell your condo.

How do you know a condo is blacklisted?

The hard way is finding out when you apply for a mortgage. The easy way is having a savvy real estate team like us suss out trouble units.

Looking for a comprehensive guide to buying a condo in Toronto? Read our two-part guide here: 

Embrace the Status Certificate

The status certificate is mandated by The Condominium Act in Ontario, enforcing condo corporations to maintain up-to-date information on the following:

  • Common expense info, including the current costs, defaults on your unit, and reasons for any increases
  • Increased contributions to reserve funds for your unit or special assessments that required additional payments above and beyond what the reserve fund covers
  • The current declaration, bylaws, and rules for the condo community
  • Outstanding and past judgments against the corporation
  • A copy of the budget and financial statements
  • The number of leased units
  • Current insurance policies

The legal and financial health of the condo corporation gives you a heads-up that you might face increases in common element fees, special assessments to cover the costs of repairs and replacements, or liens against your unit. The rules, bylaws, and regulations directly impact your lifestyle. For example, your dog might pose an issue once you move in if they tend to be a yappy little pup who loves the sound of its own voice. Barking is considered a noise infringement that can lead to complaints and bylaw enforcement by the condo board.

How to get a status certificate

Potential buyers can submit a written request to the condo corporation or property management company. There is usually a fee of about $100, and the corporation has 10 days to hand over the certificate. We take care of these matters for you. Status certificates tend to be a mind-boggling read, covering hundreds of pages. We can review the certificate and recommend a knowledgeable real estate lawyer to go over it with a fine-tooth comb.

Looking for more insights on status certificates and why they are so important? Read: What is a Status Certificate and Why Do I Need One

Reveal the Community Underbelly

We’ve heard terrifying stories about Toronto’s worst condo communities, including poor maintenance, pests, noise complaints, or the worst of the worst—crimes.

How to get the lowdown

You can actually Google a condo to read resident reviews. We always get the lowdown on true living conditions, building management failures, and the vibe of the community to help you find the perfect fit for your lifestyle.

Get more Toronto home-buying advice with these posts next: 

Rate the Elevators

Elevator shortages or ongoing maintenance issues that keep elevators out of service are a real problem for Toronto condos. You might be a short walk from the office but then have to wait 20 minutes for an elevator. Elevator lineups in the lobby are a sign of things to come.

How to avoid elevator issues

If you’re shopping for high-rise condos, we’ll time a visit during rush hour to see if the elevators manage daily traffic. Status certificates also list significant elevator issues, such as special assessments for repairs and elevator-related lawsuits.

Condos offer upfront affordability and low maintenance appeal. They also have a lot more proverbial wrenches that can be thrown into the works. We’ll protect your best interests to help you find a cozy place to hang your hat.

Looking for a great condo in Toronto? Thinking about buying a home in the near future? The Christine Cowern Team is here to help! Contact our top Toronto real estate agents by calling us directly at 416.291.7372 or emailing us at hello@christinecowern.com today.