Condo plan or proposed condo plan, bylaws, annual general meeting minutes, last 12 months of board minutes, monthly unaudited financial statements, reserve fund study, plan and amount in the fund, management agreement, insurance certificate, percentage of owner occupied units, lease agreements pertaining to parking stalls. These documents and perhaps more depending on the condominium building form the package that all potential condo owners should review and be satisfied with prior to finalizing a conditional offer on a condominium unit. If the list seems a bit daunting (and it should) there is good reason. In addition to purchasing the unit you are also purchasing part ownership in the condominium corporation, a corporation that can have a great impact on your quality of life (ie bylaw restrictions) and your pocket book (potential cash calls).
Any sound, professionally prepared offer to purchase should contain a buyer’s condition that the buyer is given all condominium corporation documentation and upon receipt of all documents have the opportunity to review and be satisfied with them. Where most offers fall short is that the time frame to review these documents is time specific and not tied to when the final document is provided to the buyer.
It’s more often the case than not that sellers do not have on hand all the required documentation to provide to a buyer when an offer is accepted. The scramble begins to locate or order from the management company the required information. If the condition date is a specific calendar date this puts the buyer at a disadvantage in terms of having enough time to review the documents. In the case of new condominiums this situation is resolved by the Alberta Condominium Property Act which states any prospective buyer has 10 days, upon receipt of all documents to review them and be satisfied with them.
As condominium ownership has become a greater segment of the real estate market the awareness of the importance of the condominium corporation documents has increased. This is evident in the number of companies a buyer can hire to review these documents on their behalf. Only seven years ago there were a handful of companies in the city that offered this service. If a buyer thought to have anything reviewed more often that not they consulted with their lawyer. Although lawyers play an integral role in the buying and selling of real estate, their expertise is not in deciphering condo documents. Today buyers have a choice of more than a dozen reputable companies capable of the task.
Given the scope of the financial commitment a buyer is making with condo purchase and that a buyer has to abide by the corporation’s bylaws (can you have a pet, are there age restrictions) the old adage “Assume Nothing” is most appropriate to adhere to. The cost of having documents professionally reviewed will pay dividends in the future!