What are the two words every Kitchener Waterloo condominium owner never wants to hear? If you guessed Special Assessment, you are correct.
First, what is a special assessment? A special assessment is a demand for unit owners to pay extra costs in addition to what has already been budgeted for. It can occur whenever unforeseen expenses arise. When this happens, the board of directors asks each unit owner to pay their proportionate share.
Regular readers of this real estate blog know I like anecdotes. Here's a recent example from a condominium I helped a buyer purchase in 1995. The client contacted me about a special assessment for their townhouse condominium in Kitchener. They were asked to pay over $16,000 to cover new decks and siding. One client had already retired and the other was planning to retire. Their plans were put on hold until the special assessment was paid.
So what happens if you can't come up with the money? The unit owners can arrange to make monthly payments until the debt is satisfied. Sometimes, the unit owner will decide to sell the unit. In most cases, the seller will pay out the special assessment from the proceeds of the sale.
What can Kitchener Waterloo condominium buyers do to avoid a special assessment. I would advise two things. First, always make the purchase agreement conditional upon the review of a status certificate by your lawyer. A status certificate will contain the budget for the corporation and outline any current or pending special assessments as of the date it was completed.
Second, always, always, always have a home inspection completed. Yes, the condominium corporation is likely responsible for most of the repairs from the walls out. However, remember once you purchase a unit, you are responsible for your share of the expenses. A home inspector can visually inspect swimming pools, decks, balconies, parking garages, retaining walls, roofs, insulation etc. to determine the likelihood of necessary repairs going forward. A condominium in an apartment building I sold recently had $800,000 in balcony repairs alone.
If all this seems complicated, it is. When buying a condominium, it is imperative that you work with a Realtor, a home inspector and a lawyer. Together, they'll look out for your best interests and do their best to make sure you don't end up on the wrong end of a special assessment.
If you have questions about selling or buying a condominium, feel free to call, text or email 519-505-4488 firstname.lastname@example.org.