Resale Condominium Buying – What You Need To Know
About Resale Condominiums in Ontario
Condominiums are a fast growing segment of Toronto’s booming real estate market. In fact, they have been the fastest growing (in pure numbers of units built) section of the market for several years. Condominiums are a fast growing segment of Toronto’s booming real estate market. In fact, they have been the fastest growing (in pure numbers of units built) section of the market for several years.
So what is a condominium exactly? Simply put, it’s a form of legal ownership rather than a type of property. Many think of condominiums as high rise buildings. However, there are also low-rise condos, such as condo townhouses. In some parts of Toronto, there are also condominium single family homes. A condo consists of the unit, which the purchaser owns free and clear, and the common elements, which the purchaser has a shared ownership in, along with the other unit owners in the condominium complex. It is because of this shared ownership component that condominiums have maintenance fees.
The above distinction is important, because normally owners are allowed to make modifications within their unit, but are not able to make changes to common elements, since they are collectively owned in a shared manner with others. An example of a shared common element would be a lobby of a high rise building, or a swimming pool in the complex.
Condominium Rule and Regulations
Condominiums must have a Board of Directors. The Board is made up of owners, and is elected by owners. The Board is responsible for managing the activities of the condominium in accordance with the Condominium Act (which governs condos in Ontario), & the particular condominium’s Declaration (which is the particular building’s governing legislation). The Board may hire a property manager to take care of the day to day operation of the condo, or it may decide to self-manage. Self management is rare, and so most condos are managed by a property management company. Condominiums are subject to rules and regulations, due to the shared ownership element, which govern the rights and obligations of the owners, & which are designed to ensure that the building is properly maintained. An example of a rule can relate to how loud you can play the music, what size of pet you can keep in the property, or when you can use the swimming pool, etc.
Normally, the condominium is insured at a collective level. This covers the common areas, & liability insurance. Individual unit owners normally have insurance to cover personal property within the unit as well as any improvements & betterments made to the unit.
Condo Status Certificate
This is a very important document which any condo buyer must ideally review prior to finalizing a condo purchase, preferably through their lawyer. The document also is accompanied by important information documents including the condo’s rules, its budget, whether there are any lawsuits, where the money will be spent in the future, and importantly, the condo’s savings account, or reserve fund. Most offers to purchase a resale condo are made conditional on the lawyer’s review of these aforementioned documents.
Condominium Maintenance Fees
Maintenance fees normally are paid to cover operating costs for common elements as well as for contributions to the aforementioned condo reserve fund, or savings account, which is used for major capital equipment investment & repairs. It may also go to cover utilities, if the condo is structured that way. However, one must keep in mind that utilities, are not always covered.
Resale condominiums have become a major part of our real estate ecosystem in Ontario. As baby boomers retire, many will move into condos for the first time. Many first time buyers are also calling condos their first home, since it’s normally the only type of real estate they can afford. Investors are also buying condos in droves. All these parties must educate themselves fully on what it means to be a condominium owner, what rights they have, & what obligations they have under condo ownership. In this way, disappointments and misunderstandings may be avoided. Your Century 21 realtor will be able to assist you further with respect to the numerous benefits of condominium ownership in Ontario.
Ram Rajendram is a Toronto Real Estate Broker with Century 21 Harvest Realty Ltd., Brokerage. He sells condos & houses throughout the GTA & assists home & condo buyers with their purchasing needs. He is also a Canadian Chartered Accountant (CA) & holds a Bachelors Degree in Economics from the London School of Economics (LSE)