Toronto Real Estate – Buying a re-sale condo
June 28, 2016
I’ve written about the risks of buying a pre-construction condo, but there are also risks when you’re buying a re-sale. However, the risks when buying re-sale are more manageable and certainly you want to be working with an experienced agent who knows the Toronto real estate market and which buildings have issues.
One thing you definitely want to know is whether the building’s plumbing is Kitec. It was used in new builds between 1995 and 2007 and has a high failure rate. It was installed in a number of condo buildings. Generally, the condo owners are responsible for replacing the plumbing which can require a massive special assessment. It should be disclosed in the status certificate, but it helps if you know which questions to ask. Chances are if the building was constructed between 1995 and 2007, the builder used Kitec.
There are many other hidden issues as well and lots of things can come up that don’t have to be disclosed in a status certificate. I always ask about exterior work and whether there are plan to redo balconies or railings. While this work is temporary, you may lose the use of your balcony during the summer.
Garages are often in need of repair, whether it’s due to poor construction or regular maintenance. When an underground garage needs to be resurfaced or if there is major concrete work to be done, often this means you need to find a new home for your car until the work is completed.
Some condos have the water heater, furnace or heat pump in a utility closet. It’s a good idea to know who is responsible for repairs or replacement. Often a heat pump is maintained and paid for through the corporation’s reserve fund, but that’s not always the case and if you don’t know about it and it is your responsibility to fix it and pay for it, then you want to be be aware.
If the building you’re looking at is in an underdeveloped area, it’s important to know what kind of development is going up around, especially when the view is one of the main reasons you’re buying. There are never any guarantees – zoning changes all the time.
Insurance can be a complicated issue. Generally, a condo corporation carries insurance (which you’re paying for in your maintenance fees) which will restore a unit after a fire, flood or other accident to the state of a ‘standard unit’, which is a definition of what a unit looks like in terms of finishes. Depending on the policy, they have a responsibility if anything goes wrong to bring it to the standard definition, but if you’ve got upgrades that don’t fall within that definition, you may be on the hook for those upgrades. It’s important to understand how much you’re covered by the insurance policy.
It’s also important to know what the deductible is for the corporation – sometimes it’s your responsibility to pay for that deductible.
Mozo at 333 Adelaide has a very stripped down insurance policy that only covers the concrete shell of the building, which benefits the residents because this means lower maintenance fees and it allows you to get the best insurance package for your needs and contents.
Other insurance policies may cover everything up to the drywall or the middle of the wall between the concrete. In any of these cases, everything within your unit is your responsibility.
None of the items above should scare you off – there are many advantages to buying a re-sale condo – an experienced real estate agent and knowledgeable lawyer can help you navigate the pitfalls. If you’re considering purchasing a condo, whether re-sale or from plans, please get in touch with me. I’m happy to answer any questions you may have – and let you know which questions you should be be asking!