Homes Smarts - New Homes and Condo Article 2

Condo Ownership, Part I: Understanding the Basics

I’ve watched the evolution of the housing market over the past twenty-five years with great interest. It’s been quite a ride, to say the least. Over the past seven years alone, there’s been a staggering fivefold increase in the percentage of Canada’s new home market share for condo sales. Locally, the Ottawa region has seen condominium sales increase by 25 per cent over the last two years alone.

Why the massive shift? There are a number of explanations. Firstly, for many city-dwelling first-time buyers, it’s become the only realistic financial option. Next, even among those “Generation Y” purchasers with thicker wallets, the hipness factor of condo living goes a long way: to a childless thirty-year-old, an urban loft has more appeal than a four-bedroom home with a lawn to mow. Additionally, as the baby boomers become empty nesters, there’s a growing segment of the population looking to downsize from large family homes. And both younger and older purchasers appreciate the worry-free aspect of condo ownership: maintenance and security issues are kept to a minimum, allowing what we like to call the “lock-and-leave lifestyle”.

While the word “condominium” often conjures an image of a high-rise tower, it’s actually a legal definition that refers to the method of ownership, not the type of building. In purchasing a condominium, you own the interior space of your home outright. Other elements of the building, such as hallways, elevators, recreational facilities and outside grounds, are known as “common elements”. These are jointly owned by you and all the other homeowners in your condominium community. Your balcony or terrace, and sometimes your parking spot, are known as “exclusive use” common elements. This means that, while their upkeep is not your responsibility, they are intended for your use only.

While condo owners are mercifully free from such concerns as pruning shrubs and vacuuming the swimming pool, they do pay for such maintenance through a monthly charge known as a Maintenance Fees, or Condo Fee. This fee also cover the costs of management, administration and insurance for common element areas, and often covers the cost of utilities. In many cases, a condominium “reserve fund” will cover the replacement cost of items such as a broken furnace; as many of us know, those living in typical freehold homes aren’t so lucky.

Maintenance fees can vary substantially between condominiums, depending on both the square footage of the owner’s home and the level of the building’s amenities. For instance, a high-rise condo with a swimming pool and gym will have higher fees than a townhome condominium with minimal groundskeeping. Keep in mind that having such amenities at your doorstep may save you the cost of a fitness club membership. You may be able to entertain in a huge party room, or watch movies with friends in a multi-media lounge – pastimes that would likely be beyond your reach outside of the condominium paradigm.

While condo living isn’t for everybody, an increasing number of people are discovering its benefits. It comes down to weighing what’s important to you.

In my next column, I’ll discuss how to narrow your search for the perfect condo. Till then, enjoy the hunt.

Email your questions to news@bennettpros.com

Marnie Bennett formed her boutique real estate marketing firm after meeting with remarkable success as an award-winning realtor and as Executive Vice-President of a market-leading custom home builder. Bennett & Company provides a full range of services to real estate developers, builders, property managers and investors. Marnie is a broker with Keller Williams Ottawa Realty, and team leader of a top-producing five-star team, providing five-star treatment.