When reviewing strata documents, one of the most common questions buyers ask is, "Should I buy this condo?" While it’s a valid concern, the answer is rarely a simple yes or no. Every condo comes with its own unique considerations, and the right choice depends on your individual priorities, risk tolerance, and financial situation.
Key Considerations When Evaluating a Condo
1. High Strata Fees – Cause for Concern or a Sign of Stability?
Many buyers shy away from condos with higher strata fees, assuming they indicate financial mismanagement. However, in many cases, higher fees contribute to a well-funded Contingency Reserve Fund (CRF), reducing the likelihood of unexpected special levies. They can also reflect a proactive approach to maintenance and repairs, ensuring long-term stability.
On the other hand, low strata fees might suggest that necessary maintenance is being deferred, potentially leading to costly repairs down the road. The key is to look beyond the numbers and understand how the funds are being allocated.
2. Future Special Levies – A Dealbreaker or a Manageable Expense?
Special levies—additional payments required from owners to cover major expenses—can be a major factor in your decision. Before purchasing, consider:
- The current CRF balance
- Annual contributions to the fund
- Expected upcoming expenses, as outlined in the depreciation report
- At Condo Clear, we provide a custom projection of special levies buyers may face over the next ten years. While some buyers might be deterred by large levies, others may find them manageable if they plan accordingly and factor these costs into their budget.
3. Ongoing Legal Disputes – Red Flag or Routine Business?
Legal disputes within a strata corporation can be concerning, but they aren’t always a dealbreaker. A well-managed strata will:
- Address disputes transparently
- Seek professional guidance when needed
- Budget appropriately for legal costs
- While some buyers prefer to avoid condos involved in legal matters, others may be comfortable proceeding if the strata is handling the situation responsibly. Consulting a lawyer to assess potential risks is always a wise step.
Making an Informed Decision
There’s no universal answer to whether a condo is “good” or “bad.” Instead, buyers should focus on gathering information and assessing their personal comfort level with the property’s financial health, maintenance history, and potential risks.
The key takeaway? Do your research, understand the risks, and determine whether the condo aligns with your financial and lifestyle goals. With the right approach, you’ll be well-equipped to make the best choice for your future home or investment.
