Knowledge and Preparation is Essential Before Buying a Second-hand Condominium

Condominium is an increasingly popular choice of living style and property investment due to many reasons. Most people choose to live in a condominium to avoid the headaches and hassle associated with owning a landed property. For a person who wishes to acquire a second-hand condominium, it is worth following some simple guidelines when checking out a unit: -

• Check with the developer of the selected condominium whether the Strata Title for the unit has been issued. If the Strata Title has yet to be issued, the transfer of the property must obtain prior consent from the developer if the unit owner intends to sell it.

• Get a copy of the Principle Agreement and Deed of Mutual Covenant signed by the developer and the first owner. The terms and conditions agreed to by both the developer and the first purchaser are spelled out in the agreement and covenant. These terms and conditions will continue to bind the new owner of the unit.

• Get a copy of the House Rules from the property manager in order to understand the “do’s” and “don’ts” regarding the condominium.

• Ensure that the car parking bay attached to the unit is an Accessory Parcel registered under the Strata Titles Act 1985.

• Get a copy of the building insurance policies. Be sure that you will be compensated if fire or some other catastrophe damages or destroys the condominium. After you have purchased the unit, make sure you get a copy of the insurance certificate that is issued under your name.

• Get a copy of the maintenance accounts (dating back to the previous three years) from the property manager. The accounts records will show you the extent to which charges have increased over the years and any trends or patterns in the sums levied. Find out about the maintenance collection record from the property manager. Poor collection records of the maintenance charges and sinking fund will affect the maintenance operation of the building and the new buyer might end up paying additional charges to maintain the property.

• Check out the rates of the service charges, sinking fund, assessment, quit rent, insurance policies, and water supply and electricity. If you are buying a Service Apartment, the rate that you are going to pay is much higher. This is because the Service Apartment in Malaysia is categorized under “commercial property” whereas the condominium is grouped under “residential property”.

• Watch out for any huge repair bills like replacement of the roof or structural repairs, building repainting, replacement of lifts, etc. which are likely to be incurred in the near future. The situation will be worsen if there is no sinking fund or reserve fund of the condominium.

• Check out whether there is any active resident association or management corporation committee. Take part in the meetings organized by the association or committee to find out more about what is happening.