By Alex Veiga – Asso­ci­ated Press

For many aspir­ing home­own­ers, buy­ing a Toronto con­do­minium can be an afford­able way to move from rent­ing to own­ing a home that doesn’t have a lot of the added costs involved in main­tain­ing a house on a piece of property.

Con­dos also may come with added perks many first-time buy­ers might not be able to afford in their starter home, such as a swim­ming pool or hot tub, or resort-like ameni­ties such as ten­nis courts and secu­rity guards.

But the condo life also requires own­ers to give up some of the free­dom they would enjoy if they owned their own detached home, all while being exposed to oner­ous main­te­nance fees on top of their mort­gage payments.

And too often, experts say, condo buy­ers don’t stop to con­sider exactly what they’re get­ting into.

“The biggest sin­gle mis­take that peo­ple tend to make is to think that buy­ing a condo is just a less expen­sive way of buy­ing a house and not really under­stand­ing that it’s shared own­er­ship, which is a lot dif­fer­ent,” says Robert Irwin, author of Tips and Traps When Buy­ing a Condo, Co-op or Town­house.

“They aren’t going to be able to do a lot of the things they can freely do when they own their single-family detached house,” Mr. Irwin says.

Still, there are steps buy­ers con­sid­er­ing a condo pur­chase can take to ensure they know what to expect before tak­ing the plunge.

The first thing to do is try to find out how much you will have to pay in main­te­nance costs, or monthly home­own­ers asso­ci­a­tion fees. You also want to know if there are any big spe­cial assess­ments on the horizon.

Spe­cial assess­ments are fees that condo asso­ci­a­tions some­times decide to charge own­ers in order to pay for an unex­pected cost, such as an emer­gency repair, lit­i­ga­tion or even to help cover a short­fall in monthly dues.

Assum­ing that the main­te­nance is rea­son­able and there aren’t any spe­cial assess­ments on the radar, you can delve deeper.

You may be happy with a building’s looks, the size of the unit and loca­tion. But a condo is real estate, just like a detached home. And just like a detached home, the value of a condo will rise or fall largely based on how com­pa­ra­ble units sell.

Build­ings with high pro­por­tions of unsold, empty units can send the wrong sig­nal to buy­ers and can hurt com­pa­ra­ble resale prices.

Also, a condo com­plex that has too many investor-owned units being rented rather than occu­pied by own­ers can make it tougher to obtain financ­ing, experts say.

“The first thing I want to know is what the occu­pancy rate is,” says Ken Roth, author of Every­thing You Need to Know Before Buy­ing a Co-op, Condo or Town­house.

In a mar­ket with declin­ing sales and home prices, condo own­ers who bought dur­ing the peak or spec­u­la­tors who bought with the inten­tion of unload­ing their prop­er­ties quickly could be in finan­cial trou­ble, par­tic­u­larly if they took on risky adjustable-rate mort­gages, Mr. Roth says.

Buy­ers look­ing to snap up a unit in such a com­plex might find it dif­fi­cult to get a mort­gage because banks typ­i­cally won’t finance or will charge a pre­mium to finance a unit in a build­ing where 40% or more of the units are rentals, he explains.

There­fore, condo buy­ers should find out what the occu­pancy rate of the build­ing is and what per­cent­age of its units are being rented out by their own­ers. Ask the home­own­ers’ asso­ci­a­tion, or in the case of a new build­ing, the developer.

Experts advise buy­ers to exam­ine the finan­cial state of a devel­oper and to ask to have some guar­an­tee that any money you put in toward a unit in a build­ing under con­struc­tion be kept in escrow.

One gim­mick to watch out for is when devel­op­ers adver­tise a build­ing as 80 or 90% sold.

That sounds good, but some­times what devel­op­ers are really say­ing is they’ve sold most of the units they’ve put on the mar­ket, rather than most of the units in the building.

The next key step when con­sid­er­ing a condo pur­chase is to go over the building’s condo rules, con­di­tions and restric­tions doc­u­ments, which are typ­i­cally handed over to buy­ers when the con­tract is signed.

The doc­u­ments are cru­cial because they spell out the rules on every­thing from how park­ing spaces are assigned to what types of restric­tions own­ers must heed for remod­el­ling and decor.

Too often, buy­ers don’t look through these doc­u­ments thor­oughly and end up in a bind after it’s too late.

That’s what hap­pened to Tara Wash­lack and her hus­band, first-time home buy­ers who pur­chased a condo in Los Ange­les in July, 2007.

The cou­ple skimmed through the condo doc­u­ments and later ran into trou­ble when they wanted to install a satellite-TV dish. The condo rules, how­ever, pro­hib­ited the instal­la­tion of such hard­ware on the build­ing, says Ms. Wash­lack, a phar­ma­ceu­ti­cal researcher.

The condo rules also did not allow the Wash­lacks to run a TV cable through a dif­fer­ent loca­tion in their unit because it would have been nec­es­sary to drill a hole in the exte­rior of the build­ing. They also couldn’t add an over­head light in their liv­ing room because they’d have to run cables through the building’s roof, Ms. Wash­lack says.

Then, they dis­cov­ered they couldn’t install a canopy on their balcony.

“That’s one of the things that was dis­closed to us, but again, it was over­looked since we had thou­sands and thou­sands and thou­sands of pages [to read],” says Ms. Wash­lack, 29, refer­ring to the condo doc­u­ments. “I think for the aver­age home­owner it’s kind of an overload.”

One other big rea­son to plow through the doc­u­ments closely is to find out what the condo association’s finan­cial pic­ture looks like and whether it is involved in litigation.

Although the home­own­ers’ asso­ci­a­tion will typ­i­cally have some insur­ance cov­er­age for lit­i­ga­tion, it may not com­pletely shield own­ers from lia­bil­ity, Mr. Irwin warns.

“If you get into a sit­u­a­tion and you find where there’s a whole bunch of law­suits going on – regard­less of how well you like the phys­i­cal lay­out and the build­ing itself,” he says, “it may be the sort of thing you might want to pass on.”

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