Buying a condo is different from buying a house. A condominium for sale comes with financial advantages such as owning a unit and a portion of a private land as well as with disadvantages such as association fees and a set of rules and regulations.
All condominium buildings have associations that govern local policies and all owners of condominium buildings are members of an association. Members of condo associations and elected administrators who allocate expenses for maintenance and who pay monthly association fees for insurance and community maintenance.
Specific legal documents that need to be read, understood, signed and then filed away. Essential documents such as:
Mandatory documents called the social contract of the co-owners. Documents that govern the relationship between condominium co-owners and administrators and that describe the methods used to establish the share of the condo fees between condo owners.
Many condominium associations believe that, entrusting the management of co-ownership to a volunteer co-owner is the ideal solution. He or she is unpaid and lives in the building, which makes it easier for him or her to look after just about everything.
In reality, condominium associations who take the time to evaluate the pros and cons of a trained condo manager often realize that his or her knowledge and competence does bring a more adequate and a more cost effective administration.
For those who are interested, the Regroupement des gestionnaires et copropriétaires du Québec offers a contract management model with information about the offer, acceptance, consideration, mutuality of obligation, competency and capacity.
Does the condominium association manage the condo building properly? Consulting the most recent financial statements, including the estimated budget for the next year does give a first indication.
Are there any overdue condo fee accounts? Is the association in the red? Does the budget fail to provide enough money for maintenance? Or, are the financial statements simply nonexistent?
A revenue and income statement is result-oriented. It lists the total revenues and the total expenses that occurred over a specific period. A bank reconciliation on the other hand, prevents and detects errors and/or frauds by comparing the revenues and the expenses with the bank statement at the beginning and at the end of a specific period.