In this episode of the Brokers for Life Podcast, host Len Lane sits down with condo expert Brian Fischer of KDM Management to demystify the world of condominium ownership. Brian explains that condos are not just about apartments—they represent a specific ownership structure dating back to Roman times. He dives into the importance of reviewing condo bylaws, financial statements, and insurance before purchasing, emphasizing the risks of overlooking key details. Common concerns such as pet policies, parking, and age restrictions are discussed, with Brian highlighting the upcoming regulatory changes that will limit age restrictions to only 18+ or 55+ by 2030.

Brian and Len also explore the complexities of multi-stage condo developments, where buyers may face unexpected financial and legal challenges. They stress the need for professional reviews of condo documents to avoid costly pitfalls. Whether you're a first-time condo buyer or an experienced investor, this episode provides crucial insights into navigating the condo market with confidence. Tune in to hear expert advice that can help you make informed decisions about condo ownership.

With over 20 years of experience in the real estate industry, Brian is a licensed broker with RECA and a seasoned professional in condominium management. While he initially built his career in real estate sales, his focus shifted in 2010 when he and his wife acquired KDM Management, a well-established firm operating since 1986. Since taking the helm, Brian has been deeply immersed in the condominium sector, growing the company and enhancing its services to better serve clients. His extensive industry knowledge and hands-on leadership make him a trusted expert in condominium management.

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Len  00:02

Welcome. My name is Len Lane, and I am the founder and president of Brokers for Life Inc., and we are Dominion Lending Centers in Western Canada. The topic of our podcast will be about what we consider to be Real Life Mortgage Solutions. So welcome back. Season three underway, and we have the good fortune this morning to have what I would consider to be a condo expert in much as far as all the paperwork goes anyway, join us this morning and that's Brian Fisher with KDM Management here in Edmonton, Alberta.

Brian 00:39

Morning, Len. 

Len 00:41

So Brian, maybe, maybe give us a little background on your experience in the industry. I know you've been licensed almost over 20 years as a realtor. Are you still licensed as a realtor as well? 

 

Brian  00:52

Yeah, I'm still licensed as a broker with RECA so been, yeah, a couple decades into that career. Not doing much on the sales side anymore, now that we're kind of moved over to the condominium side. In 2010 my wife and I purchased KDM Management. It had been operating since 1986 but we've taken the reins on since 2010 and grown it a bit and dived right in head first to the condo world.

 

Len  01:20

Yeah, yeah, I would say you've grown it a little bit. I think I counted something like 30 employees on your website.

 

Brian 01:25

We're close to, we're around 65.

 

Len  01:30

65, yeah, that's a lot of cats to herd. Trust me, I know even at 38 of us, it's still, there's still a lot to do so. So, like I said, let's, let's dive into condos. I guess the biggest thing is maybe breaking out the idea of what a condo actually is. I know they range in size from four units to 400 or bigger, I'm sure, but, but maybe, what defines a condo?

 

Brian  01:58

You know that's a great question. It's probably the most misunderstood question in our industry, I often hear people say, No, that's a townhouse and that's a condo over there. Condo really refers to ownership structure. This, this actually, oddly enough, dates back to Roman times. The word condominium even comes from Latin “con", meaning together with and “dominion,” meaning the right of ownership. So now more close to us here in North America, there's records of co-ops and cooperative ownership dating back into the 1800s in New York, but more close to home, actually, in Edmonton. Here, the first condominium registered was Brentwood Village in 1967 which actually happens to be also the first condominium registered in Canada. So, so, yeah, they had their 50 year anniversary here back in their 2017.

 

Len  02:51

Yeah. That would have been a brand new subdivision too, yeah.

 

Brian  02:54

So it's, it's important to know that, yeah, it just refers to a type of ownership you're buying into a corporation, therefore, there's common property. So, you know, there's conventional condos and there's bareland condos, but condominium strictly means a type of ownership. So it could be a grouping of single family homes, even, it could be, you know, they have a shared driveway, for example, or entry point or circular drive. Could be, you know, again, the standard townhouses, or it could be your apartment style buildings. But yes, it can technically, it's just the style of ownership you're buying into a corporation and there's common property that all the owners participate in.

 

Len  03:29

Right. Bareland is probably something I understand that may have been unique to Alberta to begin with, as well.

 

Brian  03:35

I don't know the genesis of that. I think you know the principle of bareland condo means that… Okay, so let's talk about conventional condo. Conventional condo, for argument's sake, is generally referred to as, you know, paint to paint. I mean, depending on what the divisions are, you know, when the act by laws, etc. But you know, let's just say, for ease, paint to paint, and then the stuff outside of that, unless it directly services only that unit is generally common property. Now in bareland, the unit division is not walls, it's land. So this is where I say you can have a sub a subdivision be a condominium with a bunch of single family homes on it. Now the catch here is in a true bareland, and there's not a whole lot of barelands that operate as true barelands, because in a bareland, then the owner is responsible for any improvements inside of those, those markings, so those, those landmarking. So therefore any structure built the house, meaning your windows, your doors, your roof, cladding, your driveway, whatever, that would all be on the unit owner and not a responsibility of the Condominium Corporation. So that being said, developers go along, they start off as a bareland, and then the buyers buy in and say, Well, what do you mean? I you know, I bought this as a lifestyle choice, and I expected that my grass was going to be cut and the driveway shoveled or whatever, or you were going to do the windows and doors or whatever. Should that ever have to happen. And then. Goes, Well, okay, well, that's okay. We'll just deal with this in the bylaws, and we'll refer to all these certain common elements as Managed Property. So you may see that in the bylaws that state certain aspects being managed property. But that's why it's important to know and understand what it is that you're buying into. 

 

Len  05:17

Right. I probably sold about 200 of them when I worked for Landmark in Lincolnburg, and that was always the biggest thing. Once you put up that fence in the backyard, you're cutting the grass, it's as simple as that, right? So it's, it's one of those things that it's still the lifestyle, but the lifestyle comes with some minor yard work as opposed to maybe major, right? So condo documents for review, professionally done, obviously, on your side. Not to say that it's not professionally done, but sometimes lawyers will do that for the client. Why is it important to have that professional review?

 

Brian  05:53

Well, I mean, as I'm sure, you've been through, I'm sure, 10s of 1000s of real estate transactions. I mean, you don't hire a divorce lawyer to process a real estate transaction. And you know, and lawyers are certainly educated. However, that doesn't that education may or may not transcend into the condo world. And you know, they may or may not have the skills to properly evaluate the physical needs, construction needs of the building, interpret their lifespans and or interpret the reserve fund studies or even perhaps the financial information. You know, these are things that you want somebody that does this day in and day out to evaluate, because there's different stories for every single condo out there as to what they're experiencing at that time and what their needs are today and in the future, so.

 

Len  06:39

Yeah, it's true that we had an injury lawyer do a real estate transaction a little while ago, and then it became a mess in the end, because that's not what they do, right? So no doubt that’s prudent to have somebody who does it and looks at it every day to do that kind of research for you, right? So what are the five biggest issues you think that your office sees on a regular basis with condo, documents or associations?

 

Brian  07:08

So I mean, the moniker in our industry is people, pets, and parking. Those are your three big thing. That being said. I think honestly, Len the education piece is really the biggest failing in the entire industry, and that's direct from buyers through the sales process, you know, and sometimes even transcending up through lawyers, you know, you got buyers or somebody buying who's not completely educated on what it is that they're buying. So let's use some examples of what I mean by that. We see these common areas bylaws. So you know, the whole industry is first top-governed by the condominium Property Act. Then there's condominium regulations. And then each Corporation, all condos are governed by that. Nothing can supersede those. But below that, every condo corporation will have a set of bylaws. And heaven forbid they don't, then there are a set of bylaws that are the higher level that will govern if, in absence of bylaws done by the corporation. But your bylaws are the most important document to your Condominium Corporation that you either live in or buying into, because it'll refer to how things are run there, what is and isn't allowed, etc, how things are handled, if financial sanctions are allowed. Let's see some other thing pets. You know, are pets allowed? Are there age restrictions? Pets is a big one. I mean, I we come across this all the time. New owner comes in, we find out they've got a pet, dog, cat, whatever. We have to bare the news that, Hey, you can't have a cat or dog or whatever your pet is. They said, well, what do you mean? When I was looking at the unit with my realtor, there was a person down the hall that had a pet under their arm. Well, that's unfortunate that you'd witness that. However, that's not how the bylaws reads. So you know, and that's not dealing with service animals, of course, but you know, it's understanding your bylaws and knowing what you're getting into these and the financial statements are another thing. So there's a lot of owners who either don't get a proper, let's just say they don't get a proper review or analysis done of the financial statements prior to buying regardless of who they choose or if they do it themselves. But you have to understand that you're buying into a corporation. It's a multi million dollar corporation, generally, because, you know if it's, especially if it's more than, say, five units. So it can generally be a multi million dollar corporation, and there's common property that you own a percentage of. So every Condominium Corporation in Alberta has what they call 10,000 unit factors. So, then your portion is, generally, it's, it's decreed by the developer on construction, you know, completion, but generally it relates back to the square footage, interior square footage, of your unit. But you have a common responsibility with the rest of the owners for the common property. So, you know, where we see problems are, they're not understanding the financials. They go, you know, they buy into a building. They don't realize that they're deficient in that. Either they're operating or their reserve accounts for whatever the reasons are, and a year down the road, they get nailed with a, they call it a levy now, it used to be referred to as a special assessment. There's a cash call essentially to all the owners, saying, hey, we need to do the roof, or we need to do whatever, X, Y and Z. We don't have the money, so we need to look to the ownership to pony up. And you know, they didn't do a proper review. So they're, they're kind of caught blindsided by this, and then they're frustrated. Also understanding just how your fees are calculated and what they go to. I mean, I can't tell you how many times in my business I get, you know, unit owners say, well, I pay you $300 a month. I said, Well, no, I wish you did, but you don't. I'm a contractor like anybody else providing services to your Condominium Corporation, but that money goes to your bank account, the condo corps bank account, and it's used to pay all your common expenses, your, you know, whatever common utilities, snow clearing, snow removal, lawn care, whatever repair replacement, common property and reserve contributions, etc. So understanding that. And one thing I will caution too, is on, you know, people get enticed by, you know, the low condo fee. You know, it's important that you, when you're doing the reviews, check how they're doing operationally, and are they putting money to reserve, because buying into, I can tell you right now, if you're buying into apartment style building that has elevators, gyms, pools and underground parking, you won't see a condo fee under whatever $300 let's just say, for an easy number. You know, those things are very expensive. You know, elevators, arcades and pools are the among the most expensive to operate, maintain. So you want to have a good look at that. Ownership would be the third area where, you know, we get problems. So what I mean by that? Well, again, I bought this unit, townhouse, whatever. And they go and they paint their front door eggplant purple, you know, and we come along and say, you know, unfortunately, you're going to have to return it to the original color. What do you mean? I bought this unit. I own it. I can do what I want. It's my property? Well, yes, you did buy, but you bought into condominium lifestyle and corporation, and there are rules. And currently the rules state that, you know, you can't change the exterior of the property without, you know, Board approval, or whatever the case is, or maybe not at all. So that's understanding what you bought into and and knowing that, and, you know, and we come across this too, Len with people that say, well, the corps decided to replace the windows. Their lifespan has exceeded, you know, say it's 30 years, and it's exceeded. They've come around, and we get unit owners say, well, my windows are fine. I don't want my windows replaced. Well, it doesn't work that way. You've bought into a corp. all the windows get done. They don't just decide one or two units. So you don't have the ability to opt out of this Levy, your cash call, or the financial obligations, or, in fact, the replacement of those windows because it's determined that they need to be replaced for the building's needs and lifespan. Insurance is a huge one. I cannot tell you. We've been through four major building loss fires since I've owned KDM, all incidentally, cigarette related. But anyhow, owners that don't have their own policy, so it's misunderstood that I've bought into a condo. There's insurance in place. The Corp has insurance. I'm covered. I don't need to do anything. Well, that's not true. So let's take a case of a major fire loss. You know, you're displaced. You don't have a place to live until it's rebuilt. Yes, the condo corps policy will respond and they will reconstruct it back to its original, you know, level of construction as it was built or as defined in the standard insurable unit definition. But the contents, you know, yes, they'll put in if you had carpet and laminate, whatever, hardwood, whatever you had in there, if that's all part of it, that's what they'll replace. Now, if you upgraded your countertop to granite or some other you know, material, or upgraded your kitchen cabinets, and that's not part of the defined standard and triple unit definition, guess what? You're on the hook for that. So you need your own policy to respond to make those things up. Additionally, you know, you so you're displaced as a unit owner, you got to live somewhere, so now you got to go pay rent somewhere. Well, if you haven't your own policy, you can respond and help cover those costs for you. If you don't, not only are you paying rent somewhere else while you're displaced, you're paying condo fees back at the building that's burnt down because, and a lot of people don't understand that, because, let's say it's a you know scenario, especially where there's two big buildings, 280 unit buildings, is your condo core. Building One burns down. Building Two still operating. Well, they still have common costs and etc, etc, to run, janitorial, landscape, Storm removal, all that stuff. So yes, you're still paying condo fees. So you want to make sure that you have insurance in place to cover yourself for your displacement, for your betterments and improvements, or as a landlord, for loss of income, rental income, right? And one other thing on insurance, I'll give you another example. So let's say that you're in an apartment style building again, and your unit is the genesis of a flood, so you, your bathtub overflows, or toilet or sink, whatever, and it, of course, cascades down through three floors below you. The Condo Corp may be able to subrogate against you for the corporations deductible. So what does that mean? That means, yes, the corps’ policy will respond. However, if it's deemed to come from your unit, they can come back to you for their deductible up to $50,000 so you want to have that deductible coverage in your policy. And the last area is just general knowledge, honestly. I mean, I can't tell you how many times I have. It's a very misunderstood industry. We'll have say, for example, tenants who are residents of condos, obviously, but they may call us and say, hey, can you replace our fridge or fix our fridge? Well, I don't have the authority or the, you know, the responsibility for that. You have to talk to your unit owner, landlord. Parking is another one. Parking may be titled. It may be assigned. You want to know what you're doing. I mean, easy way is, if you're getting a title, you're paying taxes on property, taxes on your stall. But, you know, and do I have one stall or two stalls, and some buildings may have underground and surface. So it's really important to get a good handle on what it is that you're buying into, you know. One last example I'll give you on parking is that we had a building downtown. All the parking was common property and assigned. Well, this building had a number of floors underground parkade. So as you could appreciate, there are some quote, unquote, premium location stalls close to elevators, right as an example. So this seller had been selling their unit had been residing in this building for, let's say, a couple decades. They had the premium stall right by the elevator. Joe and Mary home buyer, come in with their realtor. Yeah, this is the stall these people have. This is what you're getting da-da-da. They come in and they find out they have a stall three floors down on the opposite side, and they are upset. Well, they come to realize that the parking is assigned, and they're doing it on a tenured first come, first serve, and you go to the back of the line, and the longer you reside there, the first people food chains. So yeah, again, just important to know what it is that you're buying into.

 

Len  17:05

We may have that issue in our building. I'm not sure. Actually, that's funny, because we just moved, we were in Wedgewood for many years, and then we sold our big house and moved into a townhouse in Rosenthal. When you talk about pets, they did allow pets. They allowed dogs up to a certain height, but people who would buy a puppy to, well within the height restrictions. But unfortunately, you know, the Swissy is now nine feet tall when he stands on his back leg, right? So it was interesting to, I sat on the board there for a while, and it was like one of our biggest problems was dogs. Dogs, garbage. You know, it was bareland condos, sort of always interesting. But now I’m in an apartment beside Lewis Estates, so in the lodge, 156 units, and the number one problem is parking. We don't allow pets. No dogs, at least there are cats in the building. But you know, always the complaint is, people on the first floor, noise from the parking lot. I'm going like, you bought on the first floor over the parking lot. But again, so when we bought our unit, we were told it was this parking stall. And it turned out it's a good thing. We checked further, because it was actually the one beside it wasn't. So we almost had the the MLS said one thing, and the actual parking stall wasn't, you know, wasn't across on the third floor, three levels down, or anything like that. But it was interesting that that can be confusing very quickly, and it's interesting that a tenured one, there'd be a lot of tenured ones in our building, because, like, We're the new kids. So yeah, you know the other thing too, there is, and that's a change that you're probably seeing as well. The Building, at one time was plus 50, it's now down to 30, and I hear rumblings that it may be down to 18. What? What changes are happening in the laws there as far as discrimination? 

 

Brian  19:05

Yeah, so, great, great thing. Great question. Interesting case law in our industry. Anyhow, this all happened as an unintended consequence of a tenant scenario. And basically this went to, I believe it was through the Human Rights channels, but on an age issue. So what happened? I believe it was a senior and, anyhow, long story short, what they've done is they amended the real estate act, and what they've done now is they gave a 15 year time window. So I believe, sorry I didn't make a note on this. I believe it's somewhere around 2030, give or take anyhow, the only age restrictions going forward so on new builds or any buildings after that point in time, whatever the trigger date is, is going to be either 18 plus. Or 55 plus, there's not going to, you can't have, you won't be allowed to have a 30 or a 40 or a 60 or whatever. So those are going to be the only two age limits everybody's got this 15 year. Well, we're midway through it now, but 15 year time period to comply, make decisions, move if you need to. But yeah, going forward, that's going to be the only two age restrictions allowed.

 

Len  20:22

And 55 plus is going to limit so many new buyers that don't know that it's a good way to be going, right? So in my opinion, anyway, because by then I'll be done with it anyway. Probably this is one that I have dealt with to some degree. So when you have a multi stage condo develop, been involved with it when I worked for Brookfield as well. So how does that play out for the consumer?

 

Brian  20:48

I mean, the simple answer is, it can be just fine. Obviously, reputable developers can be fine, as you can appreciate, they may not, whether it be a financial restriction or a market restriction they may choose to phase the development over time. So let's what, in case somebody doesn't understand what that means. That might mean that could be a townhouse site. It could be a building site. We've got one example. Again, I won't name names, but where the builder comes in and they built three separate buildings, apartment style building. So let's say they're each approximately 60 units. They came through, they built building one, they sold them off as condominiums. Market changes, and this is where an issue comes in. Builder says, Hey, wait a minute, rents have gone up. I'm going to keep buildings two and three as rental you know. So that's a scenario that creates a lot of hoops to jump through, and depending on how things are structured, etc. I mean, it's not necessarily, you know, all heck is breaking loose, but depending on how the developer handles it on a go-forward basis, it may or may not cause problems. Can get into legal issues, you know, I've just been made familiarized with one that's onboarding to us that, you know, half the unit factors, or half the condominium ownership is into a building, and some duplexes, and the other half there was the developer decided to build extended care facility on there, and it's been a lawsuit for a number of years, and I apparently, is hopefully coming to a closure here, and there's some financial compensation, because the in this instance, the senior care facility didn't feel that they had to pay condo fees to the whole ownership, least, and most likely, that's how it was described by The developer in the beginning. Although I won't claim to know the ins and outs of that particular case yet, but you know anyhow, so yeah, the big lawsuit comes. So, you know, there are instances like that, or where developer builder goes, you know, belly up through the process. So hopefully in that instance, somebody comes in and finishes the project. Sometimes we've seen where the, you know, a landlord type buyer comes in and then ends up working a deal to buy out the existing owners and turn it into a rental. So there's any plethora of those things. I mean, certainly, you know, whether phase development or not, there is always that little bit of risk, as far as Home Warranty stuff, and, you know, was it built correctly, etc, and, you know, and to the standards of the day. So there's always that. But I mean, you get that in housing or commercial, any kind of construction, you know, those are inherent problems.

 

Len  23:28

There's always interesting. Brookfield was always just town houses and build 6 x 20, unit buildings, or along that line. So they always had bigger stuff. But of course, like you said, the developer has a certain amount of trust when, when it's something that big, right? So, so I think I may know the project you're talking about, but I'll stay away from that one as well. There's another section of condominiums that people need to be aware of and, and that's obviously a) the financials and b) the actual reserve fund studies. Reserve fund studies that I've seen are huge documents. They're multi page, probably in the hundreds of pages, I would think, and something that needs to be done on a regular basis. Maybe you can enlighten us on what goes on with all of that paperwork. Sure.

 

Brian  24:24

Thanks, Len. So for those that don't know what an observed fund study is, life in condo ownership is a little different than your single family home. You know that being said, you know no different than your shingles or your roof or you know whatever construction materials deteriorate over time. Your carpeting, whatever. It's the same application in the condo world. So what the Act says is that, you know, every Condominium Corporation must have what's called a reserve fund study done. So the reserve fund study a) must be in place and b) it must be updated every five years and c) the Board of directors is responsible to develop a plan from the reserve fund study. Now I will be the first to tell you that probably 85% of the condo corps say our plan is to follow the reserve fund study, and that's their plan, and that's fine. So the reserve fund study is not only so what it does is it takes a look at everything, all the common components. So again, let's use an apartment building style the inside paint to paint the unit owners are responsible for their own kitchen cabinets and countertops and all that, but the hallways, the carpeting, the you know, potentially you know, painting, repair, replacement of that, lobbies, parkades, exterior cladding, roofing, all that stuff so or even sewer lines, etc, or building mechanical all of this stuff, the reserve fund study takes a look at it and says, okay, what's the lifespan, expected lifespan of these constructed materials? So, you know, windows, let's use Windows as an example. Their expected lifespan might be 25 or 30 years, but they're not brand new today. They're 10 years old. So we figure there's 20 year left in these windows. So what is it going to cost us to replace those windows in 20 years? So they go, okay, and this is where the financial component comes in, or plan comes in. So they say, okay, for the windows. You know, in, you know, we're in what, 2025 so in 2045 we're gonna have to replace these windows. It's gonna cost us a million dollars. So let's extrapolate that back, and that has to factor in increase inflation and increase construction costs, etc. But so let's say it's a million dollars in 20 years, and then they back that over the last. You know, over 20 years, how much money do we have to put away every single month to contribute to the reserve fund to make sure that we have the cash on hand to do that. And they do that for every single common component. So like, again, all those things I mentioned, shingles, exterior cladding, etc, etc. So, and then from there, then they develop, so they'll develop a cash plan saying, Okay, well, we need, you know, it might be in five years we need, we need negligible amounts of money. We might need $100,000 let's just say, but in, you know, year eight, we might need 1.5 million, depending on, you know, the size and scope of this project. So you know, how are we going to handle this? And you know, are we going to have to do cash call at that time? Are we going to start contributing more to reserve fund and increase the quote, unquote condo fees to start building that or as what's becoming quite prevalent in our industry, they may choose to borrow, you know, depending on how the bylaws are written, the condo court may decide to borrow money. So anyhow, that's, yeah, that's essentially what a reserve fund study is taking a look at the construction components common property and saying, This is what it's going to cost to cost to replace it in what period of time, and then developing a financial plan around that. So every condo Corp has to have an operating account for their day to day expenses, and they have to have a reserve account. And so, you know, it's important, when you're evaluating and buying a condo that you're looking at what point in the life cycle are we and you know, how is it funded? Like, you know, are we on pace with what the reserve fund study says and or plan, or are we deficient? Or are we ahead of the game? It could be, could be any one of those. So, yeah, you really want to do a proper analysis of that.

 

Len  28:11

So, so maybe, what are some of the major signs that a condo association is heading for cash call? 

 

Brian  28:19

Yeah, great question. So again, cash call could come from operating issues. It could come from, generally, it comes from reserve, you know, reserve contribution issues. Now, again, this is looking at the financials and going well, okay, you know, let's say 100 unit building. Let's say they have $400,000 in reserve. Well, I could tell you right now, that's not enough money, you know, without even looking at their you know what's going on. Now, that being said, I will quantify that by saying Len. It does depend. So what if this building had recently burnt down and was brand new built, so we have $400,000 we're actually ahead of the game, but that's why it's important to analyze everything, right? So, but you know, a continuing operating site that's at they probably going to need a little bit more money than that again, and you start looking at what the costs are to replace all these items. You're talking getting into millions of dollars over a 25 year period. So you're going to want to evaluate that as to where you are in the process, to understand whether you are over or underfunded, or what the plan is there sometimes even a general walk around, will tell you with have they been, you know, deferring maintenance or replacement. And, you know, you can kind of get a sense of your own. But again, get that study done and reviewed. You know, certainly looking at the operating, you know, how, what's their cash position? I mean, condominium corporations are not for profits, so they're not budgeting for any profits or that. It's all everybody's money and has to go to all the costs. But if every month there they have a, you know, a slew of liabilities that they can't seem to clear off their sheet, then you know that can be a sign of a sick, a financially sick corporation, or not being run properly, right? So, yeah, you want to watch for all sorts of those kind of indicators. 

 

Len  29:59

Yeah, we were fortunate where the building is 20 years old, but they had a cash call at about 18, so they fixed all the decks and stuff like that. And it's interesting, when you start to think about apartments, had that same issue in several places where you had a place on 23rd, and 111th, street, there under 19th Street, somewhere in there, and the decks the old two story ranchers and stuff like that, where the decks were had to be all replaced at one point, and they weren't worth a lot, so a lot of people just walked away from them, right? And the Condo Association had to do something about it, but that was probably one of the first associations, and this is back in late 80s, where they actually were able to get a loan based on the condominium fees, right? So condominium fees went up, but that portion that went up was what was actually paying the loan. So that was new at that time. I'm sure it's more common than not, in these days, we saw a few of those in Fort McMurray, of course, over the years as well, but they didn't have a lot of money. So, yeah, they had to work out a lot of money. So obviously, different styles, multi stage, condo, bareland, conventional. What are your biggest issues? I think we've covered most of this already, so we'll put this all together. Maybe any other thoughts that people should think about Brian when they're when they're looking at condominiums!

 

Brian  31:22

Again, just to educate yourself, especially if things are important to you, like parking, most people are buying into condominium for one of two reasons. They're either buying it because it's more financially feasible for them, or because of lifestyle. So you know, both those have different triggers for people, I would argue that both are can should be very concerned about the financial side, because I don't care who you are, you, you know, we've seen special levies, you know, in the 10s of 1000s of dollars in buildings for different reasons. You know, so, and that's hard to come up with if they don't do a loan or etc. So you want to be, want to be up to speed on that. And if it's a lifestyle thing, like you said, parking or swimming pools or whatever it is, just be sure you understand what it is that you're buying into. Understand that it is community living. You know, if you’re averse to noise from the neighboring unit, yeah, okay, maybe look at a concrete style built building, but it's just part of life. You're going to have to deal with that. If you don't want to deal with that, then you're probably not look at condo living, and probably look at a house just getting familiar, knowing your bylaws again, knowing what it is that you're buying into, knowing what you're financially responsible for. You know, another common question I get a lot, or a frustration, maybe is a better way to phrase it, from unit owners dealing with one right now, a major building envelope issue was done on this particular site. The current owners, yes, they were assessed or levied, and they paid that since then, unit owner’s, son, in this case, is phoning me, trying to go up one side and down the other how he heard that? They heard that the condo Corp got some money back for some part of the construction phase due to some mechanism in there. And he they wanted their portion back. And it's like, well, you're no longer an owner. They had sold. So you've, you've bought shares into a corporation, and you sold your, you know, it's a snapshot in time. You don't get to say, well, you know, hey, I'm privy to they got some money, so I get that back now that I'm not an owner anymore, no different than if they had a lawsuit to slip and fall, let's say, and for whatever reason they were found liable, they don't come back to you now that you're no longer an owner and say, Oh, by the way, you got a pony up, because this person slipped in February 2022, right? So yeah, just knowing that you're buying into a corporation, and what that means.

 

Len  33:42

That's good way to put it in perspective, I guess. Yeah, you're buying shares. If ATCO loses money next month and the shares go down, they're not coming to you looking for money, right? It's always interesting. We have been fortunate over the years, and just thinking back, we actually lived in one that was self managed from day one. And the good news was there was an accountant and a lawyer and several other people that own one, so they were, pretty much, were able to do their own but in most cases, anything else we go in that has been a condo has sometimes had issues even when they're newer, which is interesting sometimes to see that it wasn't planned out quite as well, and that was the one we had in Rosenthal that they took a long time for them to get me off of their email list. But now there's sewer drainage problems, right? And it's well over five years old, so builders long gone. It's their problem to deal with so things like that. And you look at the condo that we sold that and because it went up in price and talked the apartment before it started to go up. But, you know, their call was 16,000 but the apartments across the street, bigger project by a long shot, had a $60,000 call. So that that's if I understand. Correctly if the call is and hasn't been paid on the way out, if you're selling it, you're still responsible for the call that sound correct.

 

Brian  35:08

Well, I mean, ultimately, that'll come to whatever buyer and seller agree to, unless there's provisions. Let's say, in a scenario where there's a loan in place, there may be opportunity to take over the payment of the, you know, the payment structure. But generally, yes, it's it falls on who the owner is at the time when the levy is placed, and their generally responsible to pay that out whether they get compensation from a buyer on a sale or not. That's between buyer and seller. But generally, yeah, it's got to be paid out by the by the existing.

 

Len  35:39

By somebody, somewhere along the line, somebody pays for eventually.

 

Brian  35:43

Unless there's an agreement in place to take over payment, or whatever. 

 

Len  35:48

Yeah, and you know, up and down markets that we've been through over the last 20 years. If there's equity, it's great. You can do something maybe with that. But on the other side, we see a lot. My daughter owns one on title background that she may never get back to what she paid for it in 2007-2008 but you know, so if there was a call there, it would be definitely cash out of pocket. So anyways, Brian, I appreciate your time. I know you are a busy person and herding 65 people around the office all day long. I'm sure that's delegated to several managers, but I do appreciate your time and your knowledge on the condos and things that we can do with them. 

Brian 36:28

Okay, well, thanks very much. 

Len 36:30

You bet Have a great day. 

Brian 36:31

All right.

Len 36:32

Thanks for listening today. I hope you found the information that we provided to be useful in your mortgage journey, and remember, you can always find our associates www.brokersforlife.ca/associates. Have a great day.