Is a condominium always an apartment?
No. The word condominium describes a form of land ownership and not a type of building. The most common type of condominium in Toronto would be the apartment-style in either a high-rise or low-rise building but condominiums also take the form of townhouses and the new condominium act even permits for condominium land ownership in conjunction with related freehold houses.
What do you actually own when you buy a condo?
Condominium buyers acquire:
- The physical dwelling unit with a registeable title. The unit has its own taxes and it can be mortgaged.
- A percentage interest ownership in the non dwelling unit parts of the condominium property. These are called common elements and include lobby, hallways, elevators, driveway, garage, recreational facilities and the land on which the building is situated.The percentage ownership of common elements corresponds to the size of the dwelling unit. For example, the owner of a two bedroom unit would own a greater percentage share of the common elements than would the owner of a smaller one bedroom unit. This greater ownership portion of common elements is practially tangible however only in an increased share of monthly common expenses.
- A right to exclusively use certain common elements which are owned and maintained by the condominium corporation. These “exclusive-use common elements” can include some parking spaces and storage lockers, balconies, terraces, townhouse gardens and some driveways. Parking spaces and storage lockers might have their own deeds. If so, they are not exclusive-use common elements and they can be bought and sold independently. There may exist restricions however on the sale of some of these, for example it would would be a common restriction that a parking space could not be sold to someone who is not an owner in the building. The rights to enjoy exclusive-use common elements can only be bought and sold together with the dwelling unit to which they are attached.
What are the Common Expense Fees?
Since all of the common elements are jointly owned by the dwelling unit owners, each owner is responsible to pay their proportionate share of the maintenance costs. Each owner’s share of expenses equates to their percentage ownership of the common elements. The monthly maintenance fee (common expense fee) is levied by the condominium corporation against each owner to cover the total cost of maintaining the building. A portion of each month’s maintenance fee is required to be kept aside for future major repairs in a reserve fund.
Who is on the Condominium Corporation?
Each unit owner is a member of the condominium corporation and is given an opportunity to vote for the board of directors which handles the condominium’s business affairs. The corporation holds regular meetings so that each owner has a voice in how the project is run, its rules and regulations, bylaws, etc.
How do i know that the corporation’s business affairs are in good order?
The recently passed Condominium Act in Ontario calls for the availability of a “Status Report” (previously called an estoppel certificate) for each and every condominium in the province. This status report includes:
- A description of the property
- Interest share of common elements ownership
- Any rights to exclusive-use common elements
- Rules and regulations
- Status of maintenance fee payments by current owners
- Any anticipated special assessments for major renovations or repairs
- The corporation’s most recent financial statements and budget
Make any offer to purchase a re-sale condominium conditional upon the seller providing an up-to-date status report and your lawyer’s approval of same. Any condo corporation’s bad business affairs should not evade an experienced condominium lawyer’s review of the status certificate.
Are condos a good investment?
As with any residential real estate purchase you should do your homework before you buy. What are the three most important factors to consider when purchasing any real estate? How does the unit you are considering measure up? There are good and bad condos. Simple observation will often detect bad buildings. There are a few condo buildings in the Toronto area which CMHC will not place mortgages because of unresolved work orders or safety issues. Call CMHC’s underwriting department at 416-218-3469 to find out the current status of a questionable building. Provide CMHC with the Condominium Corporation Number of the building you want searched. Good condos have held their values despite economic downturns and in good times have proven to be excellent investments. Investigate before you buy and you should be making a classic good investment.
Do i have a building inspection done on a condo?
That depends. Having a building inspection performed on any house you buy is almost always a good idea but many condo apartment buyers of newer Toronto buildings don’t seem to bother. Building inspections are not uncommon in older buildings or in condominium townhouses. You may want to hire a building inspector to examine the condominium’s structure and major systems to ensure that needed repairs have been anticipated by the condominium corporation.
Is a condo right for me?
Condo living is a lifestyle preference more than anything else. Condos offer convenience, security, and amenities at a fraction the price of a comparable detached residence. First-time buyers find the amount of space available at a reasonable price very attractive. Empty-nesters are drawn to condos because of the turn-key convenience and the freedom of no longer having to maintain their home themselves. Busy professionals enjoy the good style, sound investment and facilities. Almost every kind of home buyer can find a condo that would fill their needs sometime in their life.