Global concerns about Ireland's fragile finances and the USA's sluggish economy have caused TD Canada Trust and the Royal Bank of Canada to both raise their fixed-term mortgage rates by one-quarter of a percentage point, effective this past Wednesday.
For both banks, five-year mortgages, popular among Canadian homeowners, will rise by 0.25% to 5.44% total. Not long ago they were slashing mortgage rates in an effort to be competitive. No longer.
With signs the housing market in Canada is about to rebound (and that the housing bubble isn't going to burst immediately) they also upped rates on three-year and four-year mortgages, again by 0.25%. One-year and two-year rates will go up by 0.15%.
Rates for mortgages that have six, seven, and 10 year terms will be unchanged.
Living in a condominium is like living in a small village, albeit you may not know the names of everyone. A condo has a board of directors made up of its residents much like a town council, and likewise it has rules, restrictions, bylaws and even fines for misbehavior such as loud, noisy parties at 4 AM on a Tuesday morning.
Heck, there might be a condo across the street that looks EXACTLY the same as your condo, but it may be a completely different community when it comes to the way it is governed and its rules.
It pays to keep these things in mind when finding the condo unit which is right for you.
1. Condo Parking, Pets and People
You might own your own parking spot or it might rented from the condominium, and this in turn will affect whether you can sell/rent out your parking space or if you can rent/buy another parking spot for a second car.
Many condos restrict or prohibit pets such as dogs and cats, and sometimes even restrict the quieter pets like spiders, goldfish, snakes, gerbils and (heaven forbid) beekeeping.
There may also be rules restricting how many people that can live in an unit or even just occupy it temporarily in the event of a party, barbecue on the balcony, have all your yoga friends over for a vegan lunch or whatever. There might even be rules restricting you from putting a satellite dish on the outside wall. Other restrictions include when you can play musical instruments, use the pool or the party room.
2. The Condo Reserve Fund
The condo board needs to keep track of how much money is in the reserve fund and how much is needed in order for them to pay for cleaning and maintenance of the lobby, hallways, elevators, furnace, roof and parking garage. They must always be maintained and repaired or else they are liable for lawsuits for failing to fulfill contracts with condo residents. Thus the condo needs a reserve fund for emergency repairs. Often the prices of utilities, security, landscaping and snow removal go up too, so expect inflation. If there is no reserve fund, be very wary of buying.
3. Condo Management and Professionalism
Most people on the condo board of directors lack any kind of business, legal or people skills needed to manage their building, let alone dog grooming business. They are on the board because they ran for the position and got voted in on popularity. Nothing to do with skill at all. However the are responsible for a budget that could be in the millions and must also deal with sometimes complex disputes between owners and the condo corporation. This requires a working understanding of the Provincial Condominium legislation that governs their condo. Even simple decisions such as when to turn on the air conditioning requires basic understanding of how it works and how the AC will affect unit owners in different ways, like whether they are on the south or north side of the building.
That’s why a condo needs a professional property manager. They know these things inside out and if they don't do them properly, then condo residents complain. If the condo you are buying doesn't have a property manager... then cross your fingers and hope you never run into an incompetent and belligerent elected-member of the condo board. It will be guaranteed to be headaches galore.
4. Insurance Deductible
Does your condo insurance policy have a $5,000 or $10,000 deductible? Make sure you speak to an insurance specialist about obtaining your own unit coverage to protect your belongings and any renovations made to your unit.
5. Were those renovations legal?
If any alterations to your condo were made you should check to make sure that they got the necessary approval via the condo board. Otherwise you might have to get it approved yourself, even though its after the fact, and this can be costly. You may end up paying for further inspections and certifications by plumbers, architects or engineers, things that should have been paid for by the previous owner.
6. Do the condo residents behave?
Call it schoolyard justice and bullying if you want to, but many condo residents don't play fair. They get into feuds about the stupidest little things and the next thing you know they're both running for condo president so they can try and kick the other person out of the building. Its ridiculous.
Before you buy its recommended you knock on some doors and ask your would-be neighbours about the building and how happy they are about other neighbours. Remember to look at the minutes of the last annual meeting. Were there many items disputed? Be suspicious if they haven't had a meeting in over a year.
7. Status Certificate
This handy little document issued by each condo shows an up to date copy of the budget, the last annual meeting, whether there are arrears / expenses, special assessments and a Reserve Fund Study. Your purchase agreement MUST be conditional on you being satisfied with the contents of this very important document. Review the document carefully with your real estate salesperson and your lawyer.
In it they predict that heating prices will continue to soar.
Well, its now November 1st 2010. Five years and almost a month later. So I think its time we asked, how much did the prices go up???
Well, lets start by looking at crude oil prices - which in turn effects the prices of heating oil. Below in the chart you will see inflation adjusted prices on crude oil rose between 2005 (roughly $45) and 2010 (roughly $70) climbed approx. $25 per barrel, or about 56%.
The next chart shows the prices of furnace oil / heating oil for 2000 to 2010. It looks very similar because the prices are largely effected by the prices of crude oil. The biggest price rise was during 2008 (the Great Recession), and it continues to rise. Compared to 1999 prices the cost of furnace oil has doubled in the last 11 years.
This next chart show the price increases for Natural Gas... The chart points out specific spikes in costs due to the California Electricity Crisis, Severe Winter Weather (thanks to climate change), Hurricanes Katrina and Rita (again, climate change), the high oil price spikes in 2008 effecting the cost of natural gas too, and the economic slowdown that followed the bailout of banks and the real estate market collapse in the USA.
All told the prices for natural gas actually have dropped since 2005. But compared to 2000, prices have doubled in the last 10 years.