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The price of a single detached home in the Okanagan increased significantly over the past year which may have left many first time home buyers feeling that their goal of home ownership is now beyond their reach.  However, purchasing a townhouse or condominium can be an affordable alternative that provides potential buyers with the opportunity to enter the housing market and build equity that can be applied towards future purchases.   A $300,00.000 mortgage  would require a payment of approx $1,225.00 monthly making this an option to consider if you are currently renting.  However, before you go shopping it is important that you understand what condominium ownership is and the monthly fees that are associated with this type of property.

A ‘Condominium’ refers to a form of legal ownership, as opposed to a style of construction and includes units in high or low rise buildings, townhouses, duplexes, triplexes and mixed use condominiums that are partially residential and partially commercial.  When you purchase a condominium you own a private dwelling that is referred to as a unit.  The unit will be registered in your name and you will share ownership of the common elements and assets of the building and community.  Some common areas include lobbies, hallways, elevators, walkways, gardens, recreational facilities and may also include mechanical and electrical services.

As a condo owner you will be responsible for a monthly fee that is your share of the operation and maintenance costs of the common property elements.  The monthly fee is usually determined by the size and location of your unit, which is referred to as the ‘unit factor’ or the ‘percentage of ownership’. You will also want to know if any utilities such as natural gas, electricity, and water are included in your monthly fees.  Typically, a portion of your monthly fee will go toward the building’s reserve fund or contingency fund, which is a fund that is used to cover the cost of major repairs and replacement of the common property elements over time.  You will want to review the strata’s financial documents taking special notation of the size of the contingency fund.  If a strata lacks a healthy contingency fund it increases the possibility that the owners may have to pay a special assessment or levy when costly maintenance issues arise.

A depreciation report would also be helpful in assessing the conditions and stability of the building.  If a report is not available that may not be a deal breaker but be sure to give yourself enough time to review strata documents such as minutes from the previous year’s strata council meetings.  Your real estate agent can request these documents for you.

Condo owners are also responsible for paying property taxes and for purchasing insurance for their personal property, any improvements made to the unit and personal liability. Lastly, as the property is governed by the strata’s rules and bylaws make sure you carefully review these to ensure that this property fits with your lifestyle.