May 2, 2018

5 Questions when purchasing a high rise condo in Edmonton

1)      Who is the builder?

This may seem like an obvious question, and for new high rise condo buildings it is always apparent who the builder is.  For older buildings however, it is often harder to discern.  With a strong grasp on the downtown condo market, even we struggled to figure out who some of the builders were when conducting the preliminary research for this site.  Many developers open shell companies for each project, some go out of business, some are from out of town and are one-off projects, the reasons vary, but the builders with good reputations and a commitment to the city make it easy to find out.  This post is not to say who the good and bad developers are, it is only to suggest that you should be asking the right questions and doing the right research.  We feature all of the developers on the Highrise Edmonton condo search page. It is a helpful resource and a good place to start to answer these questions. If you can’t seem to find a certain piece of information, send us an email and we would be happy to dig up the details for you.

2)      Will my views be obstructed with any proposed new development?

View are often one of the compelling reasons to purchase in one high rise condo building over another or in choosing one suite over another in the same high rise development. Therefore, it beckons the question; Will I always have the same view?  While in life few things are guaranteed, the same holds true for your view.  The Edmonton high rise market is becoming more and more popular with consumers, especially with the attractive new developments currently on offer and proposed in places like the ICE District in downtown Edmonton, Oliver and Strathcona.  There is a multitude of vacant land in downtown Edmonton, and parking lots ripe for development, so it is important to ask if there are any active development permits in place surrounding your viewlines.  Many high rise condo development sin Edmonton are offered in multiple phases or development with multiple towers.  It may seem like not a big deal at the time when there is nothing obstructing your view, but speaking from experience, your hard-earned investment dollars can take a hit should a new development rise and limit your views.  Again, nothing is guaranteed, but if view are of high importance to you, you can check with the city of Edmonton to see if there are any active development permits, or try to choose a condo with a view to a greenspace or existing development that you know can’t be developed, or likely won’t be redeveloped anytime soon. 

3)      Where is the parking stall?

Firstly, it would be good to confirm that there is in fact a parking stall!  While there are some developments having success in Alberta without parking, cars remain an important part of our every-day lives, and as such, for resale, I would always suggest finding a suite with a parking stall (if you don’t need it, you can always try to rent it to someone in the building – check your condo bylaws).  Most high rise condo projects offer (mandated by the city) at least one parking stall for typical condo units and two for some larger suites (or for those who wanted to purchase an extra if available).  However, some smaller bachelor style suites don’t always come with parking.  Once your parking is confirmed, check out where the stall is.  We always recommend to our clients that we take a walk down to the parkade to see the actual stall.  The legal description (what is shown on MLS sheets) and the actual painted numbers often differ, so make sure you ask the selling agent to confirm with the seller what the painted stall number is before your viewing.  Mostly it isn’t an issue but you want to make sure your car fits!  Secondly, if you are not great with navigating endless downward spiralling narrow corridors until you find your stall on P5, ask what your options are.  If purchasing new, get in early and you can sometimes negotiate a different stall if they are already assigned.  Just as an interesting aside, underground parking stalls in the core may also have a different title.  Along with this title there will be an associated cost from the city for property taxes.  These days underground parking in the core starts at about $20,000 and can exceed $30,000 depending on location.    

4)      What is the building constructed of?

I will say all (maybe there are some new exception that I don’t know of around town like Timber Frame – or steel) high rise construction is concrete and rebar.  The construction process has evolved over the years however and there was a time when post-tension cables were common practise.  While I have heard industry professionals argue for their benefit, the large majority of these systems unless they have undergone costly regular maintenance can pose serious challenges down the road.  It is not to say don’t buy in a building with post-tension cables, however it is just one of the questions to ask and know about your buildings construction.  High rise condo buildings, like a home, require ongoing maintenance and a good reserve fund study and strong reserve fund balance, will mitigate and future concerns.  This leads to the next question, How much money is in the reserve fund?

5)      What is in the reserve fund?

A high rise condo building if operating correctly and efficiently as it is supposed to should be operating like a business, as that’s what it is in fact; a corporation made up of all the different owners who each hold a fraction of the shares in the corporation (proportional representation based on the sq.ft. of your suite) and who all have a say in the affairs and direction of the said corporation/condo tower.  Because they are a corporation, they are governed by law, and in Alberta it is the Condominium act along with other provincial and federal regulations that outline how they must act and what they must report.  A reserve fund study must be completed within 2 years of a new condo project finishing construction, and then must be updated every 5 years by a licensed engineering firm.  The reserve fund study will cover what cost allocations are required each year, throughout the life of the building/materials, to maintain the building optimally.  This, combined with the latest audited financial statements of the corporation will give you a good indication of what condition the building is in to handle current and upcoming repairs (which are inevitable).  While it is important to have a clear understanding of these statements and their impact on your potential purchase, I would always recommend the analysis of these documents to a trained professional condo document review company – of which there are a few in Edmonton.  The MLS purchase contract outlines what documents must be provided to a purchaser from the seller, so it shouldn’t be an issue to obtain all this information.  Knowledge is power!

 

For information specific to your situation, please contact Robby Halabi of Rimrock Real Estate.  780.919.8180