Buying, selling and owning a condo in 2021 is a changing landscape as regulations are once more in the offing to create more protection for all parties.
For Strata Councils , typically volunteers, looking after the interests of owners, while maintaining a palateable budget, has become more complicated. Last year, coinciding with the pandemic recognition, renewing condo building insurance suddenly became the greatest complication. After forest fires, floods, typhoons, hurricanes and other disasters world wide, the insurance companies as a block became even more risk averse than usual, causing many of the companies to cease dealing with strata buildings. As a result, Strata Councils found themselves faced with massive increases ( often 4 times the premium cost from 2019) if they were lucky enough to have an insurance company take them on. It was a scramble causing hikes in maintenance fees, levies and some neglect of building maintenance items previously in the budget. So…if you are looking at condo maintenance fees and think they are high, this is one of the reasons. In the not too distant future there will be a new regulation requiring the management companies issuing the Form B (a current snapshot of the health of the building) at time of purchase to include an insurance summary, so that new buyers understand the insurance commitment they will have. Deductibles too have risen dramatically and buyers need to be aware that they are responsible for insuring against those deductibles. Furthermore, current owners and buyers should know that any renovations, even carried out by the previous owner, need to be itemised and insured by the current/new owner as well as their contents. Without this insurance, your condo would be returned to only the original condition as it was when built and you would not have the upgrades covered. This would be in case of fire or other damage.
Predictions are that there will be some slow easing in obtaining strata insurance at more reasonable rates, but they will not return to rates of 2017 & 2018. We were unaware at that time that there was huge inequality between insurance premiums for condos and detached homes. Sadly, we didn’t appreciate what a good deal stratas were getting!
On buying a condo, a buyer should receive the details of the building insurance premium – every owner should have either a copy or access to one on line.
Another future regulation will relate to depreciation reports and will mandate that the reports are to be updated every 3 years. This enables a strata council to make a plan and a budget for deficiencies, replacement of building components and best practices maintenance. A depreciation report is undertaken by an engineering company which inspects every aspect of the physical building/s – often enabling a strata to tackle a problem early at a much lower cost than waiting until the problem becomes urgent.
An amazing advocate and resource for condo owners is CHOA – Condominium Home Owners Association, founded by the tireless Tony Gioventu. He presents seminars and information sessions for property management companies and realtors. The above is not the whole condo story, but an update and reminder to keep all parties safe and protected when buying and owning an apartment in a strata building. We have yet more details up our sleeves!
Our role in partnering with clients to either buy or sell a condominium is to ensure that they are fully prepared with all those devilish details in place. We are there to advise, ensure that our client is fully informed and protected all the way, has considered the value at resale and is very happy with the final result. We remain your trusted resource and are happy to field your questions any time.
Happy holiday to those on Spring break.
Generations Real Estate Partners:- Michelle Hawthorne, Scott Johnson, Shane Goutsis, Ray Harris and Sheila Francis.