New stainless steel appliances, gas fireplaces and marble countertops may dazzle prospective condominium buyers.
But experts are urging them to first make sure the building has enough cash to cover emergencies like a leaky roof or new boiler for the building.
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Many developers offer low condo fees to entice buyers. However, Sharon Bigelow, vice president and reserve fund consultant with the Canadian Condominium Institute, warns low fees may not build a proper reserve fund to cover repairs.
"Corporations want to keep it low,” she said. “They want to make it so it's a good selling feature.”
In spite of new home warranty legislation brought in by the province this year, buyers are still being urged to do their homework before making a down payment. First, they need to examine the reserve fund report.
These reports, which should come in a package provided to the buyer, lay out issues with the building and how much needs to be set aside to pay for repairs or replacements -- a shared responsibility of each person who buys a unit.
Based on the studies Bigelow has seen, about one in 15 condo corporations don’t put enough money in their reserve fund, which leaves owners vulnerable to unexpected costs.
Furthermore, the reserve fund report can’t always be trusted. Bigelow says they can sometimes be written by people with no construction or engineering experience.
“There’s no condo police,” she said. “So unfortunately there are some companies out there that don't do a full, complete and accurate job.”
Leaky condos a problem for some
Then there’s the issue of how well the building was constructed.
People who bought condos during the economic boom in the middle of the last decade found themselves stuck with costly bills about five or six years later to fix water leaks.
In one case, nearly 100 condo owners at the Gates of Twelfth in Oliver were told they could be paying as much as $40,000 each to fix leaks in the building.
Real estate lawyer Tim Perry encourages those looking to buy a condo to research the property, the developer and get an independent assessment of the building and the unit.
"It's very smart to hire a building inspector,” he said.
In February, the Alberta government brought in new home warranty legislation in response to these types of concerns.
The New Home Buyer Protection Act makes it mandatory for builders to provide minimum one-year protection for labour and materials — and two years for heating, plumbing and electrical.
Builders are also required to provide a five-year warranty for the exterior of the building and 10 years for the frame and foundation.