What should I know before Buying a Condo In BC?

When buying a condo in BC, you’re not only buying the unit itself, but also a share of the larger building or development. You’ll be solely responsible for any internal repairs and maintenance needed on your unit.

However, the building and any land it is on will be owned by someone else. Most likely, this will be a legal entity (the homeowners association or ‘HOA’), which you and the other condo owners manage together.

You have a legal interest in your building and surroundings. And you’ll likely have “easements” that give access and fair usage rights to the property. But you may not own your specific unit outright.

That might not be seen as disadvantageous by some people. Indeed, it usually works well for all parties; however, there are both pros and cons worth taking into consideration when buying a condo in BC.

1. Buying a condo in BC is often more affordable — but not always

You generally get more for your money when buying a condo in BC rather than a single-family house, and there are often luxury extra amenities included such as pools, gyms, tennis courts, etc. However, those perks don’t necessarily come free of charge.

More for your money

Although the prices for buying a condo in BC are generally lower than standard home prices, potential buyers should factor in monthly homeownership costs as well. Still, condos offer extra amenities that first-time homebuyers may find appealing.

Condo fees might make a condo more expensive to live in month-to-month than a house that is similar.

You’ll be free from the hassle of mowing the lawn, cleaning up shared areas, or painting exterior walls. However, these tasks still need to be completed by somebody–for which you and all other unit owners will have to pay.

Another cost you’ll have to shoulder is insurance for your building. When you add up your monthly HOA or condo fees with your mortgage payment, you may find that a single-family home costs less than living in an apartment complex-even when taking into consideration the added cost of home and yard maintenance.

You pay for amenities

If your buying a condo in BC that has many luxurious amenities, be prepared to pay for them even if you never use them.

Before you get dazzled by the thought of impressing your visitors with a luxurious condo that comes equipped with a pool and gym, consider if those are features you’ll actually use. If not, there are more affordable ways to create an air of luxury, like getting a membership at a nearby gym.

2. Mortgage requirements are stricter for condos

Buying a condo in BC usually come with stricter mortgage requirements, which makes it more challenging to finance one. Lenders go through a rigorous process to make sure the condo meets special requirements. If it doesn’t meet these standards, then the loan is declined.

Don’t be discouraged by these challenges–many people have been able to finance their homes in this way.

Is your condo mortgage eligible?

If you want to get a mortgage for your condo, it depends on the specific building where your condo is and what type of home loan you’re using. For example, if you want an Federal Housing Administration (FHA) loan, then your condo development has to be approved by being on HUD’s lookup tool.

If you would prefer a conventional loan, your condominium complex will need to go through a “limited review” in order for the mortgage lender to deem it as a safe investment. Before making your purchase offer, you should evaluate the condo carefully and be mindful of certain components such as:

Are there any ongoing or one-time fees (such as for capital improvements to the condo property) that will affect your cost of ownership, or the building’s value, over time?
Before you purchase a condo, it’s essential to ask your lender about any large lawsuits pending against the condo association or developer that could make it hard for you to get financing.

Lenders have rules that homes must comply with in order to be eligible for a loan. You can ask your real estate agent or lender about the home you want to buy to see if it meets these requirements. If there are problems with either of these, then it might not be worth pursuing further.

3. Condo “assessments” can cost you thousands

A good HOA or condo company will have a reserve fund to pay for large repairs and maintenance. The monthly fee charged to each owner should be slightly more than what is needed so that the reserve fund can keep growing.

However, not every home association or condominium company is managed properly. So when the roof needs replacing or the central heating and cooling system breaks down or the windows have to be changed out, there’s insufficient money saved up to pay for these repairs.

When buying a condo in BC, large, mandatory repair bills may arrive unexpectedly. These can be for hundreds or even thousands of dollars. To avoid any future surprises, take the time to look over the HOA’s books before signing anything.

If you’re unsure about what the assessor is looking for, ask a friend or professional. These assessments are not to be taken lightly. However, if you find that there are large assessments in the pipeline, this will lower the property value significantly. So see if the current owner is willing to take on liability for these expenses or get a reduced price that reflects the threat. If neither of those options happens, it’s probably best to walk away from the deal entirely.

4. You’ll have to live by HOA rules

The HOA’s or condo company’s Covenants, Conditions, Restrictions and Easements (CC&Rs) are crucial for any owner of a condo. In short, they explain what belongs to you within your unit and what is the responsibility of the HOA.

For example, windows and external doors are often the property of the homeowner association. This means that you may be responsible for their maintenance or you may not, depending on your specific homeowner’s association bylaws. And central air is usually a common amenity among residents in a community, but individual air conditioning units are not always included. So it’s important to read your CC&Rs carefully to see what regulations apply to you. CC&Rs also spells out the rules that all homeowners must live by.

If you live in a condo complex, you might have to follow rules about things like pets, noise levels, parking, and hanging out laundry. These restrictions wouldn’t apply if you lived in a single-family home. So living in a condo complex can sometimes feel like renting an apartment.

While usually HOAs have rules that are just and make sense to protect the general welfare, sometimes members begin to feel oppressed by them. Before you buy a property governed by an HOA, be sure you’re content with following its guidelines; they aren’t meant to be bent. Also note that some associations will take legal action if these regulations are not honored.

5. You share liability with your HOA

If you co-own your HOA, you may be liable for its issues. So, if it approved a building with plenty of defects, you might have to pay for some of the repair work.

If your HOA is taking a developer to court to make them accept liability, you may have costly legal fees — and possible negative consequences if the HOA loses in court. In reality, you’re an unnamed party in any legal action the association participates in.

You might want to avoid an HOA that’s currently being sued or appears to frequently file lawsuits when buying a condo in BC.

Is buying a condo in BC worth it?

Don’t be discouraged from buying a condo in BC just because of some potential drawbacks. You now know exactly what to look for and avoid— giving you better odds than most people at finding the perfect place.

Weigh this three things-affordability, location, and maintenance – to see if a condo is right for you. Once you have your answer, you will know if buying a condo in BC is right for you. Call us to learn more!

Try buying a condo