Purchasing/Living in a Condominium
July, 8 2022 Published by Huronia Chapter - By Ashley Lamb
Special Assessments When Buying & Selling Condos
From the CCI Huronia Summer 2022 Condo Buzz Newsletter
When selling a condominium that has a special assessment in the status certificate, it can be stressful. But if you hiring an agent that understands special assessments, then it can make your listing and transaction go much smoother.
For starters, what is the special assessment for? Is it something that a buyer may put value on or something that they would consider “normal” for the age of the complex? If so, you won’t scare them off, especially if they have already been educated on what a special assessment is. This is why it is important that you hire an agent that can educate and explain what special assessments are to potential buyers and other real estate agents showing your home.
Is the special assessment for a single item like a beautification project to modernize the landscaping or lobby? Through the eyes of a buyer, this could be a positive special assessment as it will help the value of the property go up. OR is the special assessment is in place because the complex is worried about increasing the maintenance fees to keep the complex looking “desirable”? A buyer could look at this as a negative as it could be a sign that the complex has been improperly budgeted.
I understand many condo owners think that their complex will look more desirable to buyers if their fees are low but if the lower fees come with the expense of an ongoing special assessment, it wouldn’t make sense.
Buyers know that condominiums have monthly fees; it’s part of the lifestyle, and when they are searching for the right condo, they simply budget their purchase price according to what they can afford monthly. It wouldn’t be ideal if a buyer were to purchase a condo based on the mortgage payment, property taxes, maintenance fees and utilities, but then moves in and finds out that there is going to be a special assessment starting in a couple months to simply build the reserve fund rather than for something tangible. Why not simply raise the fees? It is best to be upfront and honest about your corporation.
In my opinion, there are good and not so good special assessments. And if a special assessment can be avoided by increasing the maintenance fees, I would suggest doing so.
Lastly, special assessments can be negotiated when selling. If you are worried about getting less money and buyer interest in your condo because there is a special assessment in place, you can pay it off in advance or reimburse the buyer on closing for the remaining payment(s). Everything can be negotiated!
Be upfront and honest about any special assessments and don’t fear increasing the monthly maintenance fees. And get advice from condo professionals that are in the industry every day.
Barrie Condo Corner
Condominium Focused Realtor
DISCLAIMER, USE INFORMATION AT YOUR OWN RISK
This is solely a curation of materials. Not all of this information is created, provided or vetted by CCI. Some of the information is only applicable to certain provinces. CCI does not make any warranties about the reliability or accuracy of any information found in the materials on this website. The information is not updated to reflect changes in legislation or case law and therefore may not always be current and up-to-date. We suggest you seek professional advice with respect to your specific issues or regarding any questions that arise out of the material. We will not be liable for any losses or damages in connection with the use of any of the material found on the website.