It has come to my attention that some private sellers are selling condos WITHOUT providing the proper condo documents to their respective buyers. If buyers are looking on their own and don't know the requirements, they can get stuck buying a condo without these documents. The problem arises that, if at the time of possession, the buyer discovers that the facts surrounding the condo were not properly presented, the buyer CAN back out of the deal, citing 'lack of condo document presentation' as their reason for backing out.
So here are the 6 items that a Condo Seller MUST (by law) provide to the Condo Buyer AT THE TIME OF THE ACCEPTANCE OF THE OFFER. The Buyer, upon receiving these documents, then has 48 hours to look them over (NOT counting weekends or holidays) and during those 48 hours the buyer can withdraw their offer for ANY REASON. So here are the documents, in order of increasing importance (in my opinion)
This is the agreement between the condo corp. and the current management company. These usually run for between 1 and 5 years. I consider this the least important, because as a single owner, you would have very little influence over the management company. Plus, if they really do a BAD job, the corporation simply does not renew the contract.
5) Condo Declaration
Fairly standard legal-eze that was drafted at the time when the condo came into 'being'. It tells how the condo board meetings are to be held, and other legal issues. Fairly standard.
4) By-laws (and Rules)
Funny thing: It seems that someone, wayyyy back, drafted a standard set of by-laws and then EVERY condo uses these. The original set where obviously drafted for a high-rise condo building, and so you will see things like "No Laundry to be hung from the balcony". Whats funny is when you look at buying a stand alone bungalow condo and see this as part of the by-laws. For the most part, fairly standard, but as the condo grows and matures, owners can (and often will) update and add new rules. So looking at this a little closer is a good idea. Difference between "By-laws" and "Rules"? By-laws govern the entire building and property, whereas rules apply to the 'common areas', such as hallways and parking lots. By-laws require a majority approval of all owners (usually around 75%), but rules can be passed by the current board at any time.
3) Financial Statements
This is usually a couple of pages long and shows where all the money has gone in the past year (or two) So it will show a total amount of money received thru the condo fees (and other sources, such as parking fees, laundry fees in buildings with coin-op laundry), and then shows all the items that had been purchased and repaired and maintained over the past year or more.
This is the projected budget for the next year. Estimated costs of any repairs or improvements.
THIS is the most important item. I've attached a sample condo document below. It will show whether there are any increases in condo fees being planned, any major repairs or renovations being considered, and special assessments coming along the way, any law suits or insurance claims pending against the condo. Keeping in mind that as the buyer, you are buying a small percentage of the entire building (or buildings), this is most certainly information you should have.
A final point: The Disclosure Certificate has to be dated WITHIN 90 days of the offer. So for example, if you are making an offer on a condo on April 15th, 2010, the date on the Disclosure can not be more than 90 days in the past... so that Jan 5th, for example, would not be acceptable.
I read a great reminder on a Jewelers business card a little while back : "If you don't know jewelry, KNOW your Jeweler". And so I would like to say : "If you don't know Real Estate (especially Condos),.. KNOW your REALTOR®"
If you're thinking of buying (or selling) a condo (or a house), please call me anytime for a free consultation. Any REALTOR® can send you listings via e-mail, but my buyers are among the best prepared in the market. Let's go condo-shopping.
Conversely if you're thinking of SELLING your condo, please call me. As a condo owner, I DO understand them a fair deal better than the average agent, and this can come in handy when your prospective buyers have questions.