10 red flags hiding in condo documents (and where to find them)

Condo documents are written to be accurate, not to be helpful. The facts that change a purchase decision are in there - but they're scattered across hundreds of pages of legal and accounting language. These are ten of the most consequential warning signs, and where each one hides.

Financial red flags

• 1. Contemplated special assessments - board minutes. Boards often discuss and price a major repair months before approving the assessment. 'Contemplated' costs you just as much as 'approved.'
• 2. Reserve contributions below the study's recommendation - compare the reserve fund study to the current budget. The gap is tomorrow's fee increase.
• 3. Rising arrears - financial statements. When many owners stop paying common expenses, everyone else covers the difference.
• 4. Operating deficits - audited statements. A corporation spending more than it collects is borrowing from its own future.
• 5. Sharp fee increases already scheduled - the budget and certificate. A 'low fee' listing can be weeks away from a 15% jump.

Legal and governance red flags

• 6. Active litigation - the status certificate and minutes. Lawsuits over construction defects can freeze financing and drain funds.
• 7. High board turnover or unfilled seats - minutes and AGM records. Governance chaos shows up later as deferred maintenance and surprise costs.
• 8. Insurance gaps or huge deductibles - the insurance certificate. A $250,000 water-damage deductible can land on the unit owner who had the leak.
• 9. Rules that break your plans - declaration, bylaws, and rules. Rental caps, short-term rental bans, pet limits, renovation restrictions. If your plan is to rent the unit out, check the cap and the current rental count.
• 10. Deferred maintenance language - engineering reports and minutes. Phrases like 'monitor and reassess' on a known issue often mean 'we haven't budgeted for this yet.'

The pattern

Notice that almost none of these appear on the certificate form itself - they live in minutes, studies, budgets, and certificates that most buyers never finish reading. The buildings that burn buyers aren't usually hiding anything; the information was disclosed, in paragraph four, on page 212.

Whether you read every page yourself, pay a professional, or have Tessira do it in 24 hours with every finding cited to its source - make sure someone actually reads everything. General information, not legal or financial advice.