Condo Living

Condominium living combines the principles of single-family ownership with ownership in common with all other unit owners in the building. With a condo in a high-rise building, for example, you own your own unit, but you and your neighbours collectively own the hallways, grounds and parking areas.

This common-ownership requires rules and regulations to establish everyone's rights and obligations. These limit the freedoms from those you have in a single-family home lifestyle.

Condominium Corporation's rules and regulations are contained in a series of documents called "Declaration", "By-Laws" and "Common Element Rules" and is run by a Board of Directors, made up of owners, like yourself, who are elected by the owners.

The Board has the power and duty to manage and maintain the assets of the Condominium Corporation. They incur and pay common expenses on your behalf, such as snow removal and maintenance for the building. Revenue for these expenses is collected from each owner monthly. The condo fee (or common fee) structure for every Corporation is also unique.

You can be elected to the Board and should get involved to protect your investment. At the very least, attend the meeting and read the minutes and notices you will receive. Getting involved will help guarantee you a more satisfactory life as a condominium owner.


Buying A Condo

Don't believe the sales pitch that condos offer a "carefree lifestyle". Condominium living has its own peculiar characteristics that do not appeal to everyone. You will be living very close to your neighbours and cannot build a fence if you do not like them. And you will own property in common with your neighbours, very similar to becoming business partners with them.

Every Condominium Corporation has it's own unique rules and regulations. Make sure you obtain copies of the specific "Declaration", "By-Laws" and "Common Element Rules" and read them before deciding whether to buy. If you do not understand them, ask questions. For example, do you like and want pets? These documents will say whether or not you are allowed to have a pet. Don't assume that you can change these documents once you move in because that will not happen.

In addition to your mortgage payment and property taxes, you will be responsible for the monthly condo fee, your unit's portion of the annual expenses necessary to manage and maintain the Condominium Corporation. Utilities, cable and parking may be included in the common fee, or it can be an additional charge to you in addition to the common fee. Find out the answers before you make your offer.

Insurance is still required; however, unlike a single family home there are two policies. The Condominium Corporation has a master policy that insures the building, common areas and your unit in the condition it was at the time the property was registered as a condominium. You must purchase a policy that insures any improvements to your unit as well as your own personal contents. Any reputable insurance company can help you purchase the insurance to meet your needs.

Conventional mortgages are available for condominiums, just as they are for single family homes. High ratio mortgages may not be available on all condos. Be sure to investigate your options and ideally make sure you are pre-qualified. This will directly affect the amount of the down payment you have to invest yourself.


Selling A Condo

Just like a single-family home, you can sell a condo privately or by listing the property with a real estate agent. Condos are more complicated than single-family homes and so there are added advantages to listing list the property with an agent.

The standard agreement for the Ontario Real Estate Association contains several clauses requiring specific information before it can be completed. You must have the following information available:

(a) Copies of the Declaration, By-Laws and Common Element Rules;
(b) Common fee payment amount;
(c) Information on planned special assessments or major expenses;
(d) Latest financial statements of the Corporation;
(e) The proper designation of your unit, i.e. HCCC #12, Level 4, Unit 3;
(f) Parking space number;
(g) Storage locker number.

In addition to the above, it helps to advise potential purchasers of the names of Board Members, the management company and the superintendents. This allows the purchasers to complete their investigation and make their decision quickly.

Once the agreement is presented and accepted, the sale proceeds in the same fashion as a single-family home sale. As well, the cost incurred by you with respect to legal fees and real estate commissions are similar.


Condo or Co-Op?

Condos and Co-Ops are often mistakenly regarded as essentially the same. In reality, there are certain fundamental differences that greatly impact your rights and responsibilities.

In the case of a condominium, the owner has a deed for unit, has a separate mortgage, pays property tax on the unit plus a percentage of the common areas and pays a monthly maintenance fee. A board of directors governs the complex with the owner having one vote. The condominium owner has absolute unrestricted ownership and is individually responsible for property taxes and maintenance fees.

Most co-ops are incorporated and a board of directors governs the complex with the owner of each individual unit having one vote. The owner has no deed, only stock and a proprietary lease, which has a term from 10-50 years. This lease is renewable automatically or at the discretion of the shareholders. The owner cannot refinance his unit as a condo owner can. Mortgage, property tax and maintenance fees are paid pro rata by the owner according to the percentage of the overall size of the unit. Property tax appeals involve the corporation and the stockholders.