Buying a condominium: Getting increasingly popular in cities across the world

6 November 2013 04:38 am Views - 2906

By Kirthi Hewamanne
If this home ownership style is properly followed and developed, affordable homes at different levels will continue to create vibrant and healthy communities and cities across the country.

Condominium living is a popular option for many people who live in cities as it can be a relatively carefree housing option. Currently, in major cities in some parts of the world, out of most new homes built are condominiums. It is interesting to note that condominiums tend to grow with the urban core renewal in most major cities in the world.

These condominiums will provide comfortable living and also they are close to all amenities, just within walking distance. This will cut the travelling time to go to work, shopping, theatres and restaurants.

To get the maximum out of condominium living you have to be an informed condominium buyer, which will help you to make the best choice out of different types of condominiums available.

Condominium living can offer the prospective homeowner many desirable attributes, such as affordable housing and low maintenance requirements. Many condominiums have enhanced security features over those found in single-family houses.

Condominiums can be complete communities within one complex offering a wide range of social, entertainment and recreational activities. However, buyers should be aware—before they buy—of many issues surrounding the purchase of and the lifestyle in a condominium.




What is a condominium?
A ‘condominium’ refers to a form of legal ownership, as opposed to a style of construction. Condominiums are most often thought of as high-rise residential buildings but this form of ownership can also apply to townhouse complexes, individual houses and low-rise residential buildings.

Condominiums consist of two parts. The first part is a collection of private dwellings called ‘units’. Each unit is owned by and registered in the name of the purchaser of the unit. The second part consists of the common elements of the building that may include lobbies, hallways, elevators, recreational facilities, walkways, gardens, etc. Common elements may also include structural elements and mechanical and electrical services.

The ownership of these common elements is shared amongst the individual unit owners, as is the cost for their operation, maintenance and ongoing replacement. Each unit owner has an undivided interest in the common elements of the building.

This ownership interest is often referred to as a ‘unit factor’. The unit factor for any particular unit will generally be calculated in proportion to the value that the unit has in relation to the total value of all of the units in the condominium corporation. The unit factor will tell you what your ownership percentage is in the common elements and will be used in calculating the monthly fees that you must pay towards their upkeep and renewal.

The information regarding creation of a condominium will be provided in a subsequent article.

Condominium corporation will play a major role in running the condominium complex.

Once a condominium corporation has been established, a board of directors, elected by and generally made up of the individual condominium owners, takes responsibility for the management of the corporation’s business affairs.

Each unit owner has voting rights at meetings. Your voting rights will generally be in proportion to your unit factor.




Different types of condominiums
Residential condominiums can be high-rise or low-rise (under four storeys), town or row houses, duplexes (one unit over another), triplexes (stack of three units), single-detached houses, stacked townhouses or freehold plots.

There are even mixed-use condominiums that are partly residential and partly commercial buildings. They come in various sizes with diverse features and they can be found in almost every price range.




What do I own when I buy a condominium?
When you buy a condominium, you own your unit, as well as a percentage of the common property elements allocated to the unit. The boundaries of each individual unit and the percentage of common elements you own may vary from condominium to condominium, depending on how they are specified in the condominium’s governing documents.

Sometimes, the unit boundary can be at the backside of the interior drywall of the unit’s dividing walls. Alternatively, the unit boundary can be the centre line of the unit’s walls. The boundaries of your condominium unit are an important consideration at the time of purchase—particularly if alterations and renovations are a potential part of your purchase plan.

The unit typically includes any equipment, systems, finishes, etc. that are contained only in the individual unit. The right to use one or more parking spots and storage areas may be included. While you may have exclusive access to parking spot or storage area, you seldom actually own the space itself. For a freehold condominium (or a bare/vacant land condominium), the unit may be the entire house including the exterior walls, the roof and in some cases, the land surrounding the structure.

Prior to making a purchase, you may wish to hire a professional surveyor to review the site plan for the condominium corporation so you know exactly where your unit’s boundaries lay.

Components of building systems that serve more than one unit, such as structural elements and mechanical and electrical services are often considered part of the common property elements, particularly when they are located outside of the unit boundaries specified in the condominium’s governing documents.

There may be some parts of the condominium complex that are called ‘exclusive use common property elements’. They are outside the unit boundaries but are for the exclusive use of the owner of a particular unit.

Balconies, parking spaces, storage lockers, driveways and front or rear lawn areas are common examples of exclusive use common property elements. It is important to be aware of any exclusive use common property elements before you make an offer to purchase a condominium. While these spaces are exclusive to your use, there may be restrictions on how and when you use them. For instance, you may not be able to park a boat, recreational vehicle or commercial vehicle in your assigned parking spot. There may also be restrictions on what you can place on your balcony.




What does freehold mean?
The biggest difference between a freehold condominium and a regular condominium is what is included as part of the unit. With a freehold condominium, you own the plot of land and any structure on that land such as a house or townhouse. You are normally responsible for the care and upkeep of the entire house, including the exterior walls and roof, as well as the lawn, garden, driveway and garage.

With a freehold condominium, the common property elements might include access roads to the units, recreational facilities, visitor parking area or a park with a playground. These items may be the responsibility of the condominium corporation. All unit owners pay a monthly condominium fee toward their upkeep.

With a regular townhouse or house condominium, the unit typically consists of the interior of the house itself, while the exterior of the house and the plot of land on which the unit sits are considered part of the common elements. This means that repair and maintenance of items like exterior walls, windows, lawns, gardens and driveways may be the responsibility of the condominium corporation.

In a freehold condominium, you usually have more freedom to make improvements, such as landscaping features to the unit. However, there are usually provisions that give the condominium corporation some control over owners modifying the unit, such as determining when the roof will be repaired, and what colour roof tiles must be. So, if you want to change the colour of your door or build a deck in your backyard, you may have to ask for permission from the board of directors.

(To be continued)
 (Kirthi Hewamanne, a graduate of the University of Ceylon, Peradeniya, an award-winning realtor with wide experience in all aspects of real estate, a condominium specialist with specialized knowledge of the condominium management concept, held membership in the Canadian Real Estate Association. He has written several articles on condominiums and real estate in general and also worked in New Zealand Housing Corporation. He can be contacted at kirtionebiz@gmail.com)