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Condo By-Laws: Balance between reasonable restrictions and negative resale value
This blog-post is actually addressed to anyone serving on a condo-board, or in a position to influence by-laws and rules of their condo, but condo buyers and sellers might find this interesting as well. I would like to talk about the by-laws, and the importance of striking a ‘balance’ between functionality and adversely affecting resale value.
One of the truisms in selling ANY product is this :“Make it EASY for the buyer to buy”…. in other words, “Don’t throw up a bunch of road-blocks”. This is very true for condo-by-laws. The more restrictive they are, the smaller the pool of interested buyers, and the tougher it can be to sell the condo (ie: the lower the selling price).
Let’s take a look at an example of “Age Restriction”. Condos that are for 55+ residents might be very desirable to the buyers in that age group, but since it leaves out anyone under 55 yrs of age, over half of the potential buyers will not be able to buy it. Smaller pool of buyers, means smaller selling price to the condo-owner.
By-Laws Can Hurt Resale Value
More extreme examples include “Pet Restrictions”. Having a by-law which states “Absolutely No Pets” turns off a large part of potential buyers. For example, many older residents, especially widows or widowers, enjoy the company of a pet. An alternative might be to restrict the number and size of pets. Some boards have written a by-law which states :”If an owner takes their pet onto common elements (such as the hallway for example), the pet must be carried by the owner”. This naturally precludes someone from housing their malamute or newfoundlander in their high-rise condo.
Another example of a restrictive by-law, which initially might seem appealing, is the bylaw that states :” No For Sale Signs to be posted on condo property”. Owners might initially think that this is a good thing, but in the end, it will negatively affect nearly EVERY owner at some point….when they’re trying to sell their condo.
Another condo in the south end of the city is so restrictive as to not allow owners to showcase individual flower pots outside of their units.
As someone who has written by-laws for condo corporations, I may suggest this: Striking a balance between functionality and adverse effect on resale value is in everyone’s interest.
If you’re looking to buy or sell a condo, or simply have questions about condo by-laws and rules, please feel free to contact me anytime
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