Condominium Insurance: Two Simple Things You Need to Know

As an owner of a condominium or perhaps a potential purchaser, there are 2 very simple things you need to understand about insurance. (Of course, there are many more than two things involved in this subject, but only two are critical if you’re worried that the subject will be a good cure for your insomnia… these are the important two, so pour the coffee and stay with me on this.)

Number One: The Condominium Corporation is required by provincial legislation to carry general liability, Directors & Officers, Errors & Omissions and machinery & equipment insurance and the Corporation’s bylaws can stipulate other coverage regarding the Corporation’s operations. These documents ensure that as an owner, your interest in the condominium as a whole, is protected. (This is also the insurance that your mortgage company will want to know about.)

If fire damages or destroys the building or a block of townhouse units, the Condominium’s insurance policy will cover the repair or replacement costs and owners will not be required to pay the rebuilding costs.

Your monthly fees include your share of this cost to the property as a whole.

Number Two: The Condominium’s insurance will not pay for your Uncle Bob’s lost wages when he trips on the ottoman in your den and breaks his leg. It will also not replace your puffy-white-cloud sofa when your red wine juggling routine goes awry.

These types of claims – personal liability and damage to personal property (alone) must be addressed through your own personal insurance policy. Specific coverage for condominium owners is available from most insurers and is generally more affordable than standard homeowner’s insurance, since your insurer is not liable for covering the cost of replacing the structure itself – rather, just the contents and (depending on your Corporation’s bylaws) any improvements you make to the interior of the structure. Your broker can help you to find the most appropriate coverage for your needs. (Hint: if you currently don’t have a broker or would like a competitive quote, you may want to check with your Condominium’s broker for a quote – some will offer discounts for owners in a property they cover.)

What you need to be aware of is that there are two types of insurance and that one is entirely your responsibility.

Recall the poor souls you’ve seen on the news whose condos were damaged or destroyed by fire – their unit will be repaired or rebuilt, but their personal belongings won’t be replaced if they didn’t have their own policy for contents. A final note in this regard – and this one should keep you from nodding off – is to be sure that your personal policy will pay any deductible that you may be responsible for. This situation can happen to anyone and certainly has in the past – you forget to close the bedroom window before you leave at Christmas – your pipes freeze, burst and flood your neighbour’s units. While the Corporation’s insurance will respond to the claim, you can be held responsible for the deductible amount. With this coverage on your personal policy, you won’t be out-of-pocket for this mishap (unless the Condominium’s insurance premiums are increased next year as a result of the claims history, in which case – all owner’s fees may be increased to cover the additional cost.)

Of course, this is a far more complex topic than what can be represented here before we have you looking for a pillow and blanket, so if you’re interested in more in-depth information, speak to your broker and/or your Condominium’s broker about further details.

The Perks of Living in a Condominium

One of the main goals in life of a person is to finally have a place to call his own. Having your own home is a clear indication that you have already done a lot of things in your life and that you are stable enough to be considered as a homeowner. However, planning to purchase your own home is difficult since you need to consider whether you would like to have a traditional house and lot, or to have a condominium unit. While most people would normally choose a house and lot, there are a lot of benefits in choosing to invest in a condominium. Here are some of the perks of living in a condominium.

Ensured safety. A lot of people find condominiums more appealing than a house on a lot. This is because they are easier to maintain. Condominium units are also easier to protect and therefore the safety of your family members is assured when you live in one. Although you may choose not to have CCTV cameras inside your unit, the halls of each floor are equipped with several cameras so that the building’s security personnel can easily monitor the people who are entering and leaving the condominium building. Some of the more high-end buildings have top-notched security systems which will make even the most meticulous and paranoid unit owner at ease. You can even instruct the security personnel in your building to only allow a limited list of people who can enter and visit you.

More affordable. Since a condominium unit does not entail land ownership, purchasing one is relatively more affordable than owning a house on a lot. If your condominium is within the city, you can do away with having to own a vehicle since you can easily walk or take the bus or subway to and from your unit to your workplace.

High Resale Value. If your condominium is at a great location, you can be assured that it will get a high resale value in case you want to sell it in the future. You can also get a high mortgage value for your unit in case you will need to have a loan.

Communal benefits. Another perk of having a condominium is that the shared or combined ownership of the building will let owners have access to the existing facilities and amenities such as the gym and pool for free. However, you must also be aware when you live in a condominium; you will have to pay for HOA fees or Home Owners’ Association fees. The fees collected through HOA will be used for improving and upgrading the shared facilities and security of the building.

Location and accessibility. Owning a condominium unit within the city will give you an enviable location and easier access to your place of work and other business establishments without having to have a long commute. If your condominium unit is within the city, you will no longer need to wake up too early just to avoid the rush hour traffic. Also, if you are the person who enjoys the nightlife, having a condominium unit will allow you to have easier access to the hottest clubs and entertainment venues at night.

Your Condominium Manager: Control-Freak or Nurturer?

Is your Board-Manager relationship dysfunctional? If you’re butting heads constantly or just can’t seem to get things done, you’ll need to examine the individual management styles of each and find some common ground.

This subject involves the management style of both the Board of Directors and the Manager and for each, there are two distinct styles. A newly-elected Board at the same property can be very different in its preferred style, from the previous Board, so this is a dynamic condition. The Board may be very involved, very hands-on and prefer to direct their Condominium Manager with specific and detailed instructions; or the Board may prefer that the Manager be very proactive and look after things with as little of their involvement as possible. With either management style, you as a Board should understand that no matter your preference, decision-making is still the Board’s responsibility – not the Manager’s. Allow me to reiterate this: decisions are not the Manager’s responsibility – even if you would prefer it that way.

For the Involved Board, your Manager will take direction and carry out the specific tasks you (reasonably) request of them (an example of this involves the Vice-Chair who regularly walks the property and sends a list of maintenance items and by-law infractions to the Manager to engage the contractors and send letters to the offending residents). For the Less-Involved Board, your Manager should advise you of maintenance items and by-law infractions and while they may act within the authority allowed to them by the Management Contract, they must still report to the Board and should have such actions ratified by the Board.

Whichever your style, be sure that both your Board and your Manager have a clear understanding of your preferences and of the specific procedures and expectations involved by both parties. The real caution in all this, is the style of the Manager. I have worked with many Managers over the years who, while yes, may have the knowledge and experience to tell you what the “right” decision is or how to handle things or who may even move forward and do them on your behalf. Many, in the interests of expediency or ego or both, forget that the Board must make the final decision. This should not be confused with the Manager’s job to provide solid information (or to complete certain tasks for which they have the authority or are responsible to perform according to your agreement) – this is intended in respect of actual decision-making.

Your Manager should provide guidance, professional advice, experience-based reasoning and all the research that the Board needs to make an informed decision, but he or she should never lead, point or otherwise influence the Board’s choices. We’re speaking here, of decisions such as: which of the three quotes to choose; whether or not to evict a tenant; or if a contractor’s job has been completed satisfactorily. Although some Boards prefer to have their Manager tell them which is the best choice, your Manager is a Facilitator, not a Dictator and should be proficient in assisting you to make the best choice – never to tell you what the choice should be. Because the final responsibility rests with the Board, your duty is to draw a line and be vigilant that this line is not crossed.

The Board carries some large responsibilities – if the Manager you’re paying is not fitting in with your style – find someone who will.

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Interior Decoration Tips for Your Newly Bought Condominium

Is it your new condominium that has been the reason for your excitement lately? Buying a new house is the dream of every human being. Whether, an apartment or a condo, it is a dream of every buyer to address the need for interior decoration. Decorating a new condo can be little tricky, but as far as the imagination is concerned, “sky is the limit.”

From the floors to the tiles, everything about the condos is stupefying, but there is always a particular thing that the owners want to renovate according to their personal taste and requirement. Besides, condos are perfect for an average family size that comes with every kind of modern amenities, but the urge to design it in a way that suits the style of the owner is always more convincing.

Besides new curtains and furniture, there are other steps that are critical to the selection of the splendid interior design are:

1. Most of us never inspect our new homes after getting its final possession. Though, the developer of condominiums offers well-designed house, but it is necessary to check if there are some loopholes associated with the flooring, wiring or tiles implemented in any part of the house. Check for issues like wall cracking, water leakage and tiles breakage. Address the need for repair to the contractor as soon as you explore the problem areas of the house.

2. Overall planning is essential before taking any action. Outlining the plan helps to stay within one’s budget and follow all the steps correctly.

3. Condos are quite spacious and must be decorated adequately for making optimum utilization of the available space. It is also essential for avoiding any cluttered impression in the living space. The space must be wisely used that creates an invigorating effect on the mood of the house.

4. A condominium can be refurbished by adding a new floor plan to the house. Considering timber or tile floor of good quality is an excellent way to offering a changed look to the personality of the house.

5. The curtains of the living area must complement the color of the walls. For example, If the walls are white in color, the owner can go for blue, green, maroon, pink or yellow colored curtains. For the walls having bright colors like purple or maroon, curtains of light hues work well.

6. Always aim for buying a furniture having multiple uses as it saves you money and initiates optimum utilization of the space. You can buy a bed with a box in it for accommodating several household items inside it. Buying a table having three or four cases can be used for placing decorative items and other objects like a music system or a Computer.

7. If you feel the need for extra cabinets, it can be installed in the walls of the room. Wooden cabinets installed in the walls looks neat and offer scope for proper space management.

8. Make use of Stylish lamps, LED bulbs and tube lights for enlightening the spirits of your home.

9. Every room should have a different paint scheme. While the kids room color scheme must be bright and lively, the living rooms of the other members of the house can be in the light, pastel colors. Even the implementation of the feature wall at either the main wall of the room or behind the Television wall will look excellent.

10. Using Feng-Shui items like wind chimes, laughing Buddha or mirrors for decoration is a magnificent idea for keeping the positivity of the home intact.

11. Implementation of the designer mirrors and glasses in the different areas of the home creates a wonderful optical illusion and look stylish.

12. The space of the balcony can be well-utilized by adding a decking or a hanging swing to it.

13. Last, but not the least, if home decoration is not your cup of tea, seek expert advice for the same as buying an expensive property like a condo is a one time investment and therefore, it must be well-decorated for creating that million-dollar effect.

The Great home design is the essence of a beautiful home. The design of your condo must be such that refreshes your mind as soon as you enter it after a hectic day in your business.

Condominium Formation and Conversion – Rhode Island

Q. What is a condominium and how is it formed?

In Rhode Island, a condominium is any real estate project which includes individually owned units (i.e. a residential unit) and common elements (i.e. general common elements and limited common elements) that are owned by the unit owners as tenants in common.

A condominium is created in Rhode Island by recording a declaration of condominium with the appropriate office in the city or town where the project is located. The declaration must be drafted in accordance with the Rhode Island Condominium Act (the “Act”) for all condominiums created after July 1, 1982.

Q. What are the bylaws?

The bylaws are the rules of the condominium. The bylaws are enforced by the association’s elected officials. The bylaws can be changed with a certain percent vote of the unit owners of the association. A buyer should always review the bylaws carefully prior to entering into a purchase and sales agreement. Buyers are sometimes surprised to find out that representatives of the association are allowed to enter the buyer’s unit; pets are not allowed; or a buyer is not allowed to alter the exterior of their unit without the permission of the association.

Q. What is a condominium unit? What is a general common element? What is a limited common element?

A condominium unit (i.e. residential living space) is the area that a unit owner has exclusive ownership interests in.

A general common element is owned by all of the unit owners as tenants in common with each other and all unit owners have the right to use and enjoy a general common element (i.e. a road).

A limited common element of a condominium is owned by all unit owners as tenants in common with each other. However, only one unit owner or a limited, specified group of unit owners have the right to use and enjoy a limited common element (i.e. a patio, driveway, or porch).

Q. What is a condominium purchase and sales agreement?

A condominium purchase and sales agreement is a contract to buy and sell a unit. Many residential sellers will use a standard purchase and sales agreement form. However, there are a many different purchase and sales contracts available. It is always advisable to have an attorney who is experienced with condominium law to review or draft a purchase and sales agreement prior to signing any such agreement.

Q. What is a public offering statement?

A public offering statement is a summary of the declaration and includes important information relating to the condominium. A public offering statement must be drafted in accordance with the Rhode Island Condominium Act for all condominiums created after July 1, 1982. A buyer has the right to cancel the purchase and sales agreement within 10 days after the receipt of the public offering statement. A seller who is required to deliver a public offering statement to the buyer will face penalties prescribed by the Act if the seller fails to provide a public offering statement.

Q. Is a public offering statement required prior to the closing of all condominiums?

A public offering statement is required by any declarant or person who is in the business of selling real estate when that declarant or person offers a unit for sale on his own account to a purchaser of a condominium unit.

A public offering statement is not required in the following instances: i. if the condominium contains 12 units or less, is not subject to further development rights, and the declarant has owned the units for more than 2 years from date of first sale; and ii. nonresidential projects where all of the units are nonresidential or in residential projects where waived by agreement; and in the following instances: disposition or transfer by gift; court order; by a government agency; foreclosure or in lieu of foreclosure; disposition or transfer to a person in the business of real estate who intends to resell the unit; and when the purchase and sales agreement may be cancelled without penalty by the buyer.

Q. What is a condominium resale certificate? When is a resale certificate required prior to the closing?

A resale certificate is prepared by the association upon the request of a unit owner who is selling his or her unit. The resale certificate contains important information and must be drafted in accordance with the Rhode Island Condominium Act.

A resale certificate is required for all sales when a public offering statement is not required. However a resale certificate is not required if a public offering statement is exempt as explained in the previous question.