What is a Condominium? Condominium owners hold title to their units and share ownership and responsibility of and for the operating costs of the balance of the property (common elements such as lobbies, hallways, recreation areas, etc.) that makes up the condominium. The monthly maintenance fee paid by each unit owner conventionally includes the water, a portion for maintaining and up keeping the building and grounds, building insurance and may include the hydro and even cable television (rare). The condo owner is responsible for insurance on the contents and the interior of the condo. Condominium Apartment The maintenance fee usually includes common elements, water and exterior building insurance and often includes heat, hydro and maintenance for the parking space as well. When comparing maintenance fees for condos, be sure to check whether heat and hydro are included. Often the difference in maintenance fees is just due to the inclusion or exclusion of heat and hydro. It is important to note that when hydro is included in the monthly maintenance fee there may be a tendency for increased abuse (renters leaving windows open and heat pumped up all winter, etc.). Abuses can significantly impact the following year’s budget which results in increases to monthly maintenance fees. The maintenance fee is directly related to the size of the condo apartment. (i.e. maintenance fee for a 1500 sq. ft. condo will be 50% more than that of a 1000 sq. ft. condo). The number of units in the condo development will affect the monthly maintenance (high number of units equals more people to bear the financial burden thus lower individual fees). Townhouses Condominium Townhouses The inside of the condo townhouses are owned by each person. However the ownership of the exterior portion (common elements) is shared amongst all the owners. The condo fees pays for this shared portion. The shared ownership portion (common elements) include the outside of the building (including the roof), parking spaces, play areas for the kids, outside yard, outside of the building, exterior door, garage door. Freehold Townhouse is not a condominium since there are no common elements. The townhouses share their walls the way semi-detached homes do, but they don't set any funds aside to repair things such as the roof. Also, the homeowner is responsible for the insurance of the building as well as the contents. Freeholds require a monthly “Association Fee” (usually $50 - $100/month) for garbage pick up and snow shoveling.
Ontario's new Condominium Act,
1998 was proclaimed on May 5, 2001. The changes were summarized for
its members by the Toronto Real Estate Board on June 21, 2001 and is
reproduced below: Anyone can request the certificate and the responses contained in the certificate are binding against the Condominium Corporation. Information contained in the Status Certificate will include: Any proposed substantial additions, alterations or improvements to common element, changes in assets of the corporation (current requirement) or changes in a service of the corporation; Any agreement between the owner and the corporation regarding alterations made to the common elements by a unit owner; Any amounts, if any, that the Act requires be added to the common expenses payable for the unit; A list of all agreements for: (a) Management; (b) The provision of goods and services on a continuing basis (not including telecommunications agreements); (c) Services and/or facilities for which owners pay an extra fee; (d) Leases of all or part of the common elements for business purposes; (e) The mutual use, provision, maintenance or cost-sharing of facilities or services entered into by a declarant board; and (f) Insurance trust; A statement of all outstanding judgements against the corporation and the status of all legal actions to which the corporation is a party; A copy of the budget of the corporation for the current fiscal year, the last annual audited financial statements and the auditor's report on the statements; The most recent reserve fund study and updates to it, the amount in the reserve fund no earlier than at the end of a month within 90 days of the date of the Status Certificate and current plans, if any, to increase the reserve fund; Number of units, for which the corporation has notice of lease; Any appointment of an inspector or administrator; Any appointment of an inspector or administrator; Any additional requirements imposed by the regulations. In addition, if a Status Certificate
that a Corporation has provided omits material information that it is
required to contain, it will be deemed to include a statement that
there is no such information.
Whether you're a first-time buyer or have lived in your condo for years, Ontario's new Condominium Act has been designed to better protect your investment, and to improve the day-to-day operation of your condominium and to allow for new kinds of condominium developments. If you plan to buy a condominium It's often said that buying a condominium is buying a lifestyle. What does that mean? Condominium living is different from owning or renting a single dwelling, town house or apartment, because condos have a dual nature. Condominium owners hold title to their units and share responsibility for the operating costs of the balance of the property (common elements such as lobbies) that makes up the condominium. The condo development, in essence becomes a community in and of itself. Each purchaser accepts the responsibility of living by a published standard of Rules and Regulations unique to condo living. There are many advantages to condominium ownership. It may be less expensive than other types of home ownership especially in light of the amenities and facilities offered. It can provide an "instant" sense of community. While someone else is shoveling the snow, you can participate in community decision-making. But condominiums are not everyone's cup of tea. Condominium corporations may set restrictions on such things as owning pets, or having an outdoor barbeque. Conduct in the common areas can be strictly regulated through the condo board amending, changing and/or redrafting the Rules and Regulations. Ontario's new Condominium Act Ontario's new Condominium Act provides better protection for consumers. For example, it provides some stronger protections for purchasers by setting out information (e.g. whether the developer intends to lease some of the units) to be provided to potential buyers when they buy a unit. It makes sure owners have a say in the way the corporation is run. It also establishes new types of condominiums. It still has a way to go in the areas of inherent flexibility left with developers with respect to finishing off the units in a timely manner, hidden costs like municipal levies and surcharges (excellent way to mask the increase in costs), discretion left to developers within the body of the agreements, necessity for developers to put their company name on developments to insure consumer confidence and ability to research (the list goes on unfortunately). If you want to change your mind and cancel the contract when buying a new condo, the legislation gives you a 10-day "cooling off" period known as a “Rescission Period”. This time period commences upon signing an Acknowledgement of Receipt (usual a schedule affixed to the agreement) from the time you receive a copy of the signed purchase and sale agreement or the disclosure statement (whichever comes later). In some circumstances you may have additional time to cancel the contract if there has been a material change as defined in the Act and/or upon acceptance in writing by the developer of a request to extend.
During the Ten Day Rescission Period (above) you have the right to have your lawyer (or a lawyer of your choice as most people don’t have a lawyer). The condo sales industry is set up for buyers to walk into sales sites and either buy retail or not! You have the right to professional advice and council from a qualified Buyer’s Agent (Realtor) and to have the developer pay the Buyer’s Agency Fees for you PROVIDING you have your agent there with you on YOUR FIRST VISIT TO THE SITE (ONLY)! Have you noticed how intent the administrative staff at sales sites are to get you to “Register”? That is because once you do register you waive having them cover our fees for you. Let’s back track for a second . . . You can have the services of a skilled professional . . . . FREE as long as you DO NOT go in and Register on your own and if you do go in without your buyer’s agent you forfeit your right to FREE advice and expertise. I think you get my point but I see people still lining up at the sales sites without taking advantage of this FREE service. Once they Register the developer will NO LONGER COVER THE BUYER AGENCY FEES! These fees however are not bonuses for showing up. A skilled buyer’s agent will know the background and track record of the developer and under law is obligated to disclose this knowledge to you (his/her client under fiduciary). The peace of mind resulting from knowing the true background of the developer to whom you are committing large sums of money to (normally the largest investment in your life) is considerable! Unless you are adept at reading floor plans and site plans and juxtaposing these non-existent plans into the existing environment to insure no visual obstructions, light implications, neighboring buildings and infrastructure, you owe it to yourself to take advantage of this FREE service to you. The developer must provide a table of contents as part of the disclosure statement. The table of contents will help the purchaser find information quickly and easily in the declaration, bylaws, rules or disclosure statement about such things as whether a building on the property has been converted from a previous use and or any restrictions on pets. Purchasers will want to look closely at the types of facilities and services that are offered. The Ontario Human Rights Commission has ruled that adult-only buildings discriminate against families. However, some condos do aim to meet the specialized needs of families with small children, for example, by providing playgrounds. Others may be built with seniors in mind. Know in advance that the documents that you will sign are ridiculously one sided in the developer’s favour. Everything from delivery times to the allotment of the parking space that you purchase will be left to the discretion of the developer so you will want to know that this developer has exercised these one sided rights ethically in the past. When you lawyer reads through these documents on your behalf he/she will accept the loose and arbitrary content found therein. Each and every clause sculpted into these well crafted legal documents has been developed as a result of a problem they had with a previous buyer so most of the problems have been dealt with in the past and now don’t have to be as a slick legal clause has been developed to cover it for them. A decent lawyer and even a great lawyer can affect only minimal adjustments in the documents. For example, I purchased a condo in Toronto and moved in during the late spring of 2004 and learned that my car could not fit into the parking space that the developer has assigned to me at his “sole discretion”. When I asked him to exchange one of the thirty or so spaces that his agent has boasted that he was keeping I was shocked at his reply. This certainly is unique in this city and if you are buying you will want to Register with me to learn who they are to insure you don’t face similar abuses by this developer. The key point underlying this article is to reaffirm to you that you need a team approach to buying condos in Toronto (buyer’s agent, lawyer, etc.). It would be quite easy to shift the momentum back to buyers but not until they learn to NOT deal directly with the developer. simplycondos.com is assembling a “buyer’s pool” designed to shift some influence back to purchasers. Our clients consistently comment on how much benefit our participation in their purchase delivered to them. How is the condominium run? The condominium corporation is run by a board of directors elected by the owners. The board’s function is to manage the corporation. A new requirement will apply once the developer turns over control of the board to the owners. A new requirement will ensure that if at least 15 per cent of the units are owner-occupied, one position on the board will be is reserved for election by owner-occupants. In this way owner-occupants are assured representation on the board. Major decisions are voted on at owners’ meetings. Under the new Act, annual general meetings must be held within six months of the end of the condo corporation's fiscal year to ensure that unit-owners have an opportunity to review the financial statements in a timely manner. Participation in community decision-making is a benefit of condominium living. New kinds of condominiums The new legislation makes possible new kinds of condominium developments: "Phased" condo. Although you may have seen condos marketed advertised as "phased" in the past, today, they are really separate condominium corporations. Under the new Act units and common elements can now be added in stages, over a maximum 10-year period, as part of one condominium corporation. "Common elements". These are condominiums that consist only of common elements, but no units. For example, homes could be on separate pieces of land, with facilities such as a golf course or recreational centre as the common elements condominium. "Vacant land" condo. Under this type of condominium corporation the units can consist of vacant land, upon which, following registration, and owners can decide later what to build. This may be suitable for a mobile home development, for example. "Leasehold" condo. These are units built on land that is leased by the developer—purchasers will never own the land. They buy a leasehold interest in the unit and common elements for a fixed number of years. This interest can be sold. If you own a condominium Ontario's new Condominium Act helps to better protect your investment and to improve the day-to-day operation of your condominium A performance audit requires an inspection of the common elements of new condominiums, such as including the foundation, walls, doors, roof, parking garages and elevators. This is to ensure that any major problems are found before the 12-month deadline for submitting warranty claims under the Ontario New Home Warranty Program. The performance audit also includes a survey of owners, which asks them about any damage to their units that may have been that has been or may be caused by defects in the common elements. Reserve fund studies A condo corporation must maintain a reserve fund for the sole purpose of paying for major repairs and replacement of the corporation's common elements and assets. Corporations are required to conduct a reserve fund study to determine whether the fund can cover these costs. Once the study is done, the board proposes a plan to ensure the reserve fund is adequate. All owners must be given a notice containing summaries of the study and plan and a statement indicating any differences between the two. All existing condominiums must complete a reserve fund study by May 5, 2004. The fund must become fully funded within 10 years of the study. New condominiums must complete a study within one year of registration and the fund must be fully funded by the end of the following fiscal year. Amalgamation The corporations of standard condominiums (for example, existing condos) will now be able to amalgamate. This could help lower costs and make administration simpler by pooling resources. A meeting of owners must be called to consider amalgamation with another condo corporation. Changes in declarations A declaration is the "constitution" of the condominium corporation, and sets out what interest each owner has in the common elements and the percentage each must pay in common expenses. To change the declaration you’ll need the support of the owners of at least 80 or 90 per cent of the units, depending on what is being changed. For example, under the Act, to change contributions to common expenses for each unit, 90 per cent would be required. If pet ownership is covered in the declaration, 80 per cent would be required. Resolving disputes The new Condominium Act allows for dispute resolution through arbitration and mediation. If mediation and arbitration don't resolve the dispute the matter can still go to court. More information For more information contact the Ministry of Consumer and Business Services at 416-326-8555 in Toronto or toll free at 1-800-268-1142 from other parts of the province. Special electronic equipment for people who have hearing or speech difficulties is available at 416-326-8566. Or visit the ministry's Web site at www.ccr.gov.on.ca. If you have a specific problem, or are considering buying a condominium, you are advised to seek legal counsel. Please note: The effective date of the Condominium Act, 1998 is May 5, 2001, except for the subsection concerning the timing of annual general meetings. Its effective date is July 4, 2001. |