As Brian Shedden explains it, a building science specialist is “like a hybrid engineering discipline – building science is the study of how we separate indoor environment from outdoor and how living in the building actually impacts it.”
He’s serviced the condo market for almost 20 years and he’s got a few tips for investors looking to purchase a unit.
“Really you have two scenarios: You’re either going to buy brand new condominium or you’re going to buy one that’s of some vintage other than new – it could be 10, 20, 30 years old,” Shedden told Canadian Real Estate Wealth. “In the case of an older condominium, some of the pluses are any of the original construction deficiencies have been addressed.
“Buildings are built by real people using real hands and oftentimes they’re not the best in craftsmanship. These problems usually show up in the first year or two,” he continued. “So with an older building you’re getting some measure of assurance that some of the major issues have already been dealt with.”
One thing you need to be wary of when purchasing an older unit, however, is the state of the building’s reserve fund.
These funds are put in place to ensure sufficient funds are available to cover major projects, such as damages to the roof, windows, doors, balconies, and other shared elements.
“So really what you’re looking at is a healthy balance on a per-unit basis,” Shedden said. “So if you’ve got 20 units in this condominium and they’ve got $1 million in the reserve fund, you’ve got $50,000 a unit.”
If the fund is low, and lacks the funds to support a maintenance project, a special assessment can be levied against unit owners.
“The thing to be wary about with a special assessment is that it’s the purview of the board of directors to levy that,” Shedden said. “And so in virtually all cases that I’m aware of, when a special assessment comes down the pipe it’s usually rather substantial; it’s usually quite a shock to the residents.”
Of course, some investors choose to purchase a new unit – which minimizes the chance of requiring a special assessment for the foreseeable future.
Still, there are things to consider before purchasing a shiny new condo.
“On the other hand, if you’re looking at a new building, some of the things to look at are builders’ deficiency lists. Sometimes it takes a very long time for the builder to correct all of the outstanding deficiencies,” Shedden said.
“And one of the safeguards that we have is the new home warranty program, which provides you with substantial warranties on the structure of the building, the finishes. So you want to make sure that these documents are all available and reviewed.”
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What’s a building science specialist? Someone who will make sure you don’t take a bath on your condo investment. We spoke with one who told us the key things to consider before investing.