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BUYERS GUIDE
CMHC HOME TO CANADIANS
Canada Mortgage and Housing Corporation (CMHC) has
been Canadas national housing agency for more than 65 years.
This guide is provided for general information purposes only. Any reliance or action taken based on the information
provided is the responsibility of the user. Readers are advised to consult appropriate professional resources to determine
what is suitable in their particular case. CMHC assumes no responsibility for any consequences arising from use of the
information provided in this guide.
This research project was funded by Canada Mortgage and Housing Corporation (CMHC). The contents, views and
editorial quality of this report are the responsibility of the author(s) and CMHC accepts no responsibility for them or
any consequences arising from the readers use of the information, materials and techniques described herein.
ISBN 0-662-33517-1
Cat. no. NH15-407/2003E
1. CondominiumsPurchasingCanada.
2. House buyingCanada.
I. Canada Mortgage and Housing Corporation.
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Produced by CMHC
TABLE OF CONTENTS
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
So youre thinking about buying a condominium?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
1 Condominium basics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What is a condominium? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A unique form of ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Your role in a condominium community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condominiums across Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2 Condominium governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Who makes up the board of directors?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
How are voting rights determined?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Must I attend meetings and/or serve on committees?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Am I bound by decisions if I didnt attend meetings or vote?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Whats the difference between condominium bylaws and rules?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Property management firms versus self-managed condominiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4 Buying a condominium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Buying a new condominium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Buying a resale condominium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The pros and cons of new versus resale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Affordability How much will it cost?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
i
INTRODUCTION
iii
1 CONDOMINIUM BASICS
Condominium living can be an appealing There are even mixed-use condominiums that
housing option. Its often affordable and are partly residential and partly commercial
someone else handles much of the maintenance buildings. Condominiums come in various sizes
and repairs, such as shovelling snow and with diverse features and can be found
replacing the roof. Many condominiums in almost every price range.
have enhanced security features over those
found in single-family houses and offer a Condominium buyers have three choices.
wide range of social, entertainment and They can buy a new condo, a resale condo
recreational activities. or a conversion condo.
However, purchasers should be aware New condominiums refer to units that have
before they buy of the many issues and not been previously occupied. They can be
considerations surrounding the purchase in the planning stage, under construction or
of, and the lifestyle in, a condominium. recently completed and are usually purchased
Condominium ownership is very different from a developer. For many buyers, theyre
from owning a home under traditional fee an attractive option because of their fresh
simple tenure. This section of the Guide will appearance and modern fittings, surfaces and
help you better understand this unique form appliances. They also often give purchasers the
of ownership and prepare you for successful chance to customize their units.
condominium living. Resale condominiums are units that have
already been occupied, typically in older
What is a condominium? buildings, and are for sale by the current
owner. One of the advantages of purchasing an
A condominium refers to a form of existing condominium is that you get to see the
legal ownership, as opposed to a style of unit, building and grounds before you make
construction. Condominiums are most often your purchase. You also have the opportunity
thought of as units in high-rise residential to meet other unit owners, speak with a
buildings, but they can instead be: representative of the board of directors of the
low-rise residential buildings (fewer than condominium corporation and ask questions
four storeys); of the property manager.
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Owning a condominium differs from In addition to paying for your unit and a
owning a conventional home in several proportionate share of the common property,
ways. Key differences include: you also pay monthly condominium fees,
along with all of the other unit owners.
What do you own? This covers the upkeep and replacement of
common elements whether you use them or
When you purchase a condominium, you own not. The fees may also cover the corporations
a private dwelling called a unit. Your unit insurance policies, utilities and services such as
is registered in your name. You also share snow removal.
ownership of the common elements and assets
of the building and community. Part of those monthly fees may be put into
a reserve fund to cover the estimated cost of
Its important to be clear where your units future maintenance and repairs.
boundaries are located before you purchase.
Youll want to know, for instance, whether Required by law in some provinces and
youll be paying for window washing or repairs territories, a reserve fund study is often used
to your townhouses bricks or whether the to tell condo owners how much money should
condominium corporation will be responsible be paid into the reserve fund. Conducted by
for this. You can find information about your an engineer or other professional, it involves
units boundaries in your condominiums a detailed examination of all components, an
governing documents. analysis of when repair and replacement are
expected, and an estimate of these costs.
Some condominium units (called freehold
condominiums) include ownership of the land Condominium fees may have to be adjusted
your home is on. If this is the case, your unit from time to time to reflect the changing
may be the entire house including the exterior costs of goods and services and the state of
walls, the roof and the lawn. You may want to the buildings reserve fund. Look for these
carefully review the condominium corporations adjustments in the next years budget.
site plan, prepared by a professional surveyor,
Dont expect a refund if the board overestimates
so you know exactly where your units
the common expenses. Refunds are not
boundaries lie.
commonly given to unit owners. Instead,
Common elements may include lobbies, surpluses are typically either applied to
hallways, elevators, recreational facilities, future common expenses or paid into the
walkways, gardens and other amenities. reserve fund.
They may also include structural elements
If a unit owner sells a unit before the end of
and mechanical and electrical services.
the condominium corporations fiscal year,
Some common elements may be outside the the owner cannot obtain a refund for any
unit boundaries, but are for the sole use of the prepaid common expenses but should provide
owner of a particular unit. Balconies, parking for adjustments for prepaid expenses in the
spaces, storage lockers, driveways and lawns are purchase or sale agreement.
common examples.
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4
2 CONDOMINIUM GOVERNANCE
Condominiums are communities and some run Your voting rights will be determined by:
more smoothly than others. Before buying a
unit, ensure you understand how condominium
the condominium legislation in your
corporations make decisions about finances, province or territory; and/or
common property, rules and regulations. your condominiums governing documents
This section outlines the role of the board of (such as its declaration and/or bylaws); and
directors, your voting rights and responsibilities, your financial standing with the
common rules and restrictions as well as condominium corporation. If youre in
the differences between self-managed arrears with your contributions, you risk
condominiums and those that hire property losing your voting rights.
management firms to handle their daily
operations. Some condominiums assign one vote per unit.
Others weight the vote based on ownership of
Who makes up the board the common elements. This ownership interest
is often called a unit factor, proportionate
of directors? share or percentage of ownership.
The board of directors (or council in B.C.) The unit factor for any particular unit will
is generally elected by, and made up of, generally be calculated in proportion to the
individual condominium owners. Their units value in relation to the total value of all
number, qualifications, election, term in of the units in the condominium corporation.
office, pay (if any), removal from the board For example, a tenth-floor, three-bedroom
and other related matters are outlined in corner suite with a rooftop garden will typically
provincial or territorial legislation and/or the have a greater unit factor than a two-bedroom
condominium bylaws. basement unit.
The board of directors meets regularly to Your unit factor is also used in calculating the
handle the business affairs of the condominium monthly fees you must pay toward the upkeep
corporation, including policy and finances, and renewal of the common elements.
and makes decisions about the upkeep and
repair of the common property.
Must I attend meetings and/
How are voting rights or serve on committees?
determined? You may have to, depending on what your
condominiums rules or other governing
The board of directors makes many decisions documents require. Whether its compulsory or
for the condominium but certain decisions not, you have a responsibility to yourself and
must be made by unit owners. Each unit to other owners to become involved in your
owner has voting rights at meetings. condominium community.
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3 THE PROS AND CONS OF
CONDOMINIUM OWNERSHIP
Wondering whether or not condominium living really is the right choice for you? You may love the
idea of ditching your snow shovel and lawn mower when you move into a condo, but you might
not be so happy about leaving your satellite dish behind to comply with a bylaw.
Like most types of accommodation, condominiums have their advantages and disadvantages.
Carefully consider all of these pros and cons when deciding whether or not a condo fits with your
lifestyle, personality and financial situation.
Fewer maintenance and repair responsibilities. You may not be able to decide when
maintenance and repairs get done.
Access to on-site amenities, such as a sauna or You may have to pay for amenities that you
swimming pool, which you otherwise might might never or rarely use.
not be able to afford.
Enhanced security features in some Less privacy in some condominium units and
condominium units. Youll also have peace of possibly more noise.
mind while youre on vacation knowing that
your neighbours are close by.
Monthly maintenance or condo fees are Possibility of special assessment charges for
usually predictable. unexpected repairs.
You have a say in the running of the Like most communities, a condominium
condominium corporation. As an owner, attracts individuals with a variety of
you have voting rights and can be elected personalities. It can sometimes be a challenge
to the board of directors. to reach a consensus.
A community that may have a wide range Less space in some condominium units.
of social, entertainment and recreational
activities sometimes geared to a specific
lifestyle (seniors, for example).
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4 BUYING A CONDOMINIUM
Looking at potential homes to buy can be an For more information on what to look for
exciting experience. First, you need to figure when buying a new unit, see Tips for buying
out what you can afford and how much of a a new condominium (Chapter 5).
mortgage youll need. Then, once you find a
condominium that matches your financial and
personal criteria, youll want to ensure that its Buyer beware!
well managed and in good physical, financial
When you buy a new condominium, be prepared
and legal condition. to pay occupancy fees sometimes called
There are significant distinctions between phantom rent to the developer. Occupancy
fees cover the period between the time you take
buying a new condominium and a previously
occupancy of your unit and the time you take
owned, or resale, unit. This section highlights
ownership of it (once the unit is registered).
what you need to look for, whichever route
you choose. It will also tell you how buying a
condominium differs from purchasing a fee Buying a resale condominium
simple home and help you determine what
you can afford and which experts to consult. When you purchase a resale unit you have
the advantage of seeing what youre buying.
Buying a new condominium Its clear how much space youll have, what the
layout is like and where the common elements
Developers often put new condominiums
are. But youll also want to find out about less
up for sale before their construction has
obvious aspects, such as what steps have been
been completed or even begun. You may
taken to limit noise between units and how
be selecting your unit from a floor plan.
odours are controlled.
This has advantages you may be able to
ask for changes and risks the as-built On the financial and legal side, you should
result may differ from the plan or what you review the corporations annual operating
had envisioned and the completion date could budget, financial statements and estoppel
be later than promised. or status certificate. The estoppel or status
When considering a new condominium, certificate is a package of legal documents that
you should have a close look at your units may include the declaration, bylaws, rules and
specifications and the buildings plan and other information about the corporations insurance,
governing documents to ensure that your unit reserve fund, property management contract
is acceptable and that youre fully aware of and any outstanding judgments. You may have
regulations and the corporations budget. to pay a fee to cover the corporations costs
of providing these documents, but it will be
Youll want to find out from the developer what well worth it so much so that you should
work must still be done on the project and make any offer to purchase conditional on a
check that your purchase agreement specifies satisfactory review of these documents.
a completion date and under what conditions
the developer may change it. The developer For more information on what to look for
should also be able to give you details about when buying a resale unit, see Tips for buying
the property manager who will hold the key a resale condominium (Chapter 5).
responsibility for the day-to-day running of
the condominium.
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Condominium Buyers Guide
The pros and cons of new Some pros of buying a resale condominium:
versus resale You get what you see.
When deciding whether to purchase a new or There are no lengthy waiting periods before
resale condominium, youll want to consider you can move in unless provided for in the
the advantages and disadvantages of both. condition of sale.
Deposits are often much lower for
Some pros of buying a new condominium:
resale purchases and typically there is
A lower purchase price (depending upon no GST/HST. In some exceptional
market conditions). situations the GST or federal portion
A greater choice of locations within the of the HST applies.
building (if applicable). You can check out the condominium
A broader range of options and/or upgrades. community in advance to see if the
corporation is well run and the people
Less risk of having to undergo costly, who live in it are compatible with your
noisy and intrusive repairs and renovations. needs and lifestyle.
New home warranty protection. Older condominiums sometimes have
larger units.
Some cons of buying a new condominium:
If construction has not been completed, Some cons of buying a resale condominium:
you cannot see what you are buying Fewer options with regard to choice of unit
and must rely on artist sketches and floor (within the building), decorating or upgrades.
plans (which may change). Be sure to have
the units boundaries, location, finishes,
Older resale condominiums may require
materials, chattels, etc. clearly specified in more maintenance and repair than new ones.
the purchase agreement. The amenities that you may find desirable
Your initial deposit will be tied up for the (for example, a workout room, whirlpool,
duration of construction. security features) may not be available.
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5 CHECKLISTS, TIPS, AND FAQS
The following checklists, tips and answers unit will be accessible to someone with
to frequently asked questions are useful limited mobility. What universal design
tools to help you find a condominium that features will the unit include?
is right for you.
Find out if there are plans to reduce the
Tips for buying a new condominium ceiling height anywhere in the unit to allow
Tips for buying a resale condominium for ductwork and other mechanical and
electrical services. This can have an impact
Checklist for buying a new condominium on the esthetics of the unit and the eventual
Checklist for buying a resale condominium location of lighting fixtures and furniture as
well as wall decorations and fittings.
Condominium purchase and recurring costs
Check the future location of heating and
Physical evaluation checklist
air-conditioning equipment, ventilators and
Questions to ask advisors and hot water heaters. Again, this can affect how
condominium experts much space youll have and the attractiveness
Questions to ask a real estate agent of your unit.
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Condominium Buyers Guide
Check with the developer and municipality Check if the unit comes with a new home
about construction plans in the neighbouring warranty, which ensures that the building
area. Is the building part of a larger complex? is properly constructed and meets legal
What are the plans to build other structures, regulations. You should know what the
such as a high-rise, nearby? Could new warranty covers and for how long. Coverage
buildings change the view from your on major components can run for as long
unit significantly? as five to seven years after a building is
completed. For more information on new
Be clear about what is and isnt included home warranties, see CMHCs online guide
in the purchase price so you can compare Homebuying Step by Step.
overall costs with other condominiums.
For example: Evaluate the current state of the
construction project. Is it likely that the
Are there amenities, such as pools and project will be completed by the date set
parking, and how are they paid for? out in the purchase agreement from the
developer? Its important to assess this
Are finishes in the units included in before making your moving and financing
the purchase price? arrangements. There can be an unexpectedly
Are there other charges over and lengthy wait before a new condominium
above the purchase price you should project is completed and you can move in.
be aware of? Request a disclosure statement from
the developer in those jurisdictions where
Are utilities (gas, electricity and
legislation stipulates a developer must
water charges) covered in the monthly
provide you with one before the sale
condominium fees or are they separately
agreement is binding. A disclosure statement
metered? (You dont want to end
will give you some indication of the rules,
up paying part of your neighbours
regulations and financial situation of the
utility bills.) condominium corporation before you buy
Verify, as best you can, that your monthly and includes, among other things:
condo fees are realistic. Condo fees often a summary of the condominiums features
increase after the condominiums first year and amenities;
of operation because the developer may
have agreed to pay for certain expenses in the condominiums governing
the first year, such as a concierges salary, documents; and
but not in the second year. Fees can also the condominiums budget for the
increase after the first reserve fund study
first year after registration.
has been completed.
Find out if your purchase agreement
Investigate whether there are any hidden lets the developer extend the occupancy
costs. For example, some developers take out date. This is especially important if you
long-term leases on building fixtures, such as are making arrangements to vacate your
furnaces, to save on capital costs. These costs existing home by a specific date based on the
are inevitably passed along to owners. original closing date. You should also check
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Condominium Buyers Guide
your provincial or territorial homeowner Are utilities (gas, electricity and water
protection legislation to learn your rights if charges) covered in the monthly
your agreed-upon occupancy date is missed. condominium fees?
Consult with your lawyer before signing Ask your experts to verify that theres enough
any documents. money in the reserve fund to cover the cost
of major repairs and renewal projects.
Tips for buying a resale Find out whether any special assessments are
condominium anticipated. For instance, an underground
parking garage may need renovation or
Find out exactly where your units your building may be retrofitted for
boundaries lie and if your unit factor is wheelchair access.
reasonable.
Investigate whether there are any hidden
Hire a home inspector to evaluate the costs. For example, some developers take out
condition of the individual unit you are long-term leases on building fixtures, such as
thinking of buying, as well as the building furnaces, to save on capital costs. These costs
as a whole. are inevitably passed along to owners.
Consult the condominiums technical audit Ask what municipal services, such as garbage
(a building-wide inspection) and/or reserve pickup and snow removal, the condominium
fund study, if possible, to determine the receives. Even though you pay for these
condition of the building and common services through your property taxes,
property. (Also complete the Physical condominiums sometimes have to assign this
evaluation checklist.) work to contractors and you may pay for
Review the financial documents the them twice.
corporation is obliged to keep. These include: Check what, if any, new home warranty
the annual operating budget; coverage remains on the unit.
end-of-year financial statements; and Confirm that there are no legal actions
against the condominium corporation.
the estoppel or status certificate.
Consult with your lawyer before signing
Be clear about what is and isnt included any documents.
in the purchase price so you can compare
overall costs with other condominiums. Checklist for buying a
For example:
new condominium
Are there amenities, such as pools and
parking, and how are they paid for? Verify the units floor area and boundaries
and that your unit factor is reasonable.
Are there other charges over and
above the purchase price you should Find out if you can have changes made
be aware of? to the placement of walls, windows and
doors and what the costs would be.
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Condominium Buyers Guide
Inquire whether the building and/or your Find out if your purchase agreement
unit will be accessible to someone with allows the developer to extend the
limited mobility. occupancy date and check your provincial
or territorial homeowner protection
Find out if there are plans to reduce the
legislation to learn your rights if your
ceiling height anywhere in the unit.
agreed-upon occupancy date is missed.
Check how the units will be heated,
Consult with your lawyer before signing
cooled and ventilated and the location of
any documents.
heating and air-conditioning equipment,
ventilators and hot water heaters.
Checklist for buying a
Ask the developer about noise-and
odour-reduction measures, environmental resale condominium
features and options for suite finishes, Find out exactly where your units
cabinets and fixtures. boundaries lie and if your unit factor
Check with the developer and is reasonable.
municipality about planned construction Hire a home inspector to evaluate the
in the area. condition of the unit you are thinking
Be clear about what is and isnt included of buying, as well as the building as
in the purchase price so you can compare a whole.
overall costs with other condominiums. Consider having an indoor air quality
Find out if your monthly condo fees are inspection done to identify potential
realistic, what they include, and when mold, airborne particulates, volatile
theyre likely to increase. organic compounds, poor ventilation
and odours from other units.
Investigate whether there are any
hidden costs, such as long-term leases Consult the condominiums technical
on building fixtures, which will be passed audit and/or reserve fund study,
along to owners. if possible, to determine the condition
of the building and common property.
Check if the unit comes with a new
home warranty and the extent of Review the corporations annual operating
the warranty. budget, end-of-year financial statements
and the estoppel or status certificate.
Assess, as best you can, whether the
project will be completed by the date in Be clear about what is and isnt included
the purchase agreement before making in the purchase price so you can compare
moving and financing arrangements. overall costs with other condominiums.
Request a disclosure statement from Find out what your monthly condo
the developer in jurisdictions where a fees include and when they are likely
developer must provide one before the to increase.
sale agreement is binding.
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Utilities (if not included in the Common basement or locker facilities are
common expenses) well lit, clean and dry.
Telephone, cable and Internet access No signs of water leaks or mold.
(if not included in the common expenses)
Parking structure does not show any
A contingency for emergency repairs evidence of leaks or concrete deterioration.
Maintenance costs associated with the All areas meet your needs for ease
upkeep of your unit of accessibility.
Exterior doors, locks and security system Roadways, sidewalks and parking areas are
are functional. in good shape with no standing water.
Recreational amenities (if any) are in good Block heaters (if any) are functional.
working order and clean.
Lighting in pathway and parking lot
Elevators are clean and functional. is good.
Corridors are clean, well lit and odour-free; Walls have no water stains, corrosion,
carpets are in good repair and paint loose siding or white marks on brick.
is unmarked.
Lawn and fences are in good condition.
Stairwells are well lit; doors and door
handles are functional. Unit
Stairs have handrails and the stair edgings Favourable initial reaction to odours upon
are marked for increased safety. entering the unit.
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Condominium Buyers Guide
Exterior door to unit is in good repair, Basement is dry and odour-free with no
with unmarked paint and functioning evidence of water damage (which would
latch and locks. indicate previous flooding).
Drywall is not dented or broken. Basement sump pump is functional
(if applicable).
Paint is unmarked.
Unit heating and air-conditioning systems
Flooring (including tile, hardwood and are working, in good repair and not of an
carpeting) is clean and in good repair, age to be replaced.
with no stains, holes or burn marks.
Exhaust fans in kitchen and bathroom
Smoke detectors are on each floor. are operational.
Interior doors are in good repair and
open and close easily; latches or knobs Neighbourhood
are functional. The neighbourhood is sustainable.
Windows open, shut and lock easily; glass The area is safe.
is unscratched; no noticeable drafts or
mold; seals are in place. The area has features and services you
or your family requires (for example,
No visible water-stain marks or damaged public transit, convenient shopping,
drywall around windows, near floors parks, good schools).
or ceilings.
All light fixtures are operational. Questions to ask advisors
Appliances (if included) are functional, and condominium experts
clean and in good repair. Before you purchase a new or resale
condominium, you should consult with a
Plumbing does not drip.
number of advisors and condominium experts.
Toilets flush and refill properly. The following questions will help you assess
their qualifications. Of course, condominium
Bathtub and shower walls are clean markets vary and the intensity of a particular
and solid. market can influence how much time a buyer
Bathtub has solidly installed grab bars for may choose to take to question experts and
safe entry and exit. review documents.
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Condominium Buyers Guide
Questions to ask a real estate agent In jurisdictions offering this service, you may
want a provincial condominium review
How much experience do you have in helping specialist to examine the documents.
clients buy condominiums?
Buying a condominium is very different from Are there any fees or charges I need to
buying a traditional house so its important know about?
that your agent specializes in condominiums. If you deal with the vendors agent, there
Ask the agent how many condominium buyers should be no charge to you, as the agent will
she or he has represented in the last 12 months be paid a commission by the vendor. An agent
and be sure to get three buyer references (who acting exclusively for you should not charge
are unrelated to the agent). If youre buying a a fee because he or she normally shares in the
new condominium, an experienced agent may vendors agents commission.
be able to help you to secure upgrades and
better terms from the developer. Questions to ask a lawyer
Will you represent my interests only? How much experience do you have with
You can opt to deal with the vendors real estate residential condominium transactions?
agent, but you should really enlist one who will Ensure that the lawyer specializes in residential
act only on your behalf. (not commercial) real estate law and has plenty
of experience in reviewing condominium offers
How familiar are you with the to purchase, and purchase and sale agreements.
neighbourhood(s) in which I want to buy?
Have you dealt with this developer before?
A neighbourhood specialist will know the
desirable areas and can readily advise you on Its advantageous if your lawyer has some
pricing as well as the benefits and drawbacks knowledge of the developer of the project.
to the neighbourhood.
Do you deal with both developers and
How much time will you give me to review condominium buyers and sellers?
important documents? Law firms often represent either developers
Theres a lot of paperwork when you buy a or condo buyers and sellers, but not both.
condominium. Ensure that you and your lawyer
have plenty of time to go over it before signing. At what point do you get involved in a
residential condominium purchase?
When drafting a purchase offer for a Find out the key stages in the purchase process
condominium, what clauses do you when your lawyer will be needed.
normally include to protect the purchaser?
A realtor skilled in condominium purchases What parts of a purchase agreement tend to
should know to include protective clauses be problematic?
unique to condominium buying, such as An attorney skilled in condominium law should
making the offer conditional upon a satisfactory be able to identify areas in a contract that
review of the condominiums documents. warrant special attention.
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Condominium Buyers Guide
What costs will be incurred at the time of How do you communicate with owners on a
closing or before? timely basis? E-mail? An interactive website?
If you need a mortgage, you may have to have Can you give an example of where you have
an appraisal done. Land transfer tax must be learned from a mistake on the job?
paid at closing, if applicable. A lawyer should What business skills and experience do you
be able to provide a complete list so that you
bring to the position?
can be prepared.
How has your attention to detail
Questions to ask a property manager made a difference in the buildings
day-to-day operations?
A good property manager can have a significant
impact on the quality of life in a condominium Have you, or are you working toward,
community. He or she ultimately serves the the Registered Condominium
owners so its in your best interest to find out Manager designation?
as much as possible about this individual and/ How do you stay current with changes
or company before purchasing in a particular
in the industry?
building.
Property managers also tend to be very Questions to ask a condominiums
busy people so you may want to set up an board of directors
appointment with one by phone or e-mail. Owners who sit on the board of directors
Here are some questions to ask a property have a close-up view of the condominium
manager to get a better idea of his or her corporation. While their knowledge of legal,
experience, personality, professionalism and financial and property management issues
communication skills. will vary, its worth asking them the following
How long have you been the property questions if you have the opportunity.
manager for this condominium? How long
have you been working in the property How much money is in the reserve fund
management field? How are vacations and (and how is it invested)?
other time away from the job covered? Youll want to ensure that the condo has
sufficient funds to cover major repairs and
renewal projects.
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Condominium Buyers Guide
Have there been special assessments in the Has the condominium corporation made any
last five years and, if so, what were they for claims on its insurance coverage in the last
and how much did they cost? Are any other five years? If so, what for?
special assessments expected in the next Insurance claims can tell you more about the
10 to 15 years? condition of the property and may account for
Special assessments are sometimes necessary steeper condo fees.
but frequent, costly ones may indicate a
deteriorating building or poor financial Frequently asked questions
management.
Where are my units boundaries?
What is the turnover rate in the complex?
This will depend on your condominium.
This will give you an idea of how happy people
Sometimes, a unit boundary can be at the
are living there.
backside of the interior drywall of the units
dividing walls. Or, it might be the centre line
What is the turnover rate among the board
of the units walls.
of directors?
Repeated resignations among members may Its important to be clear where your units
point to friction within the board. boundaries are located before you purchase.
Youll want to know, for instance, whether
How familiar are board members with youll be paying for window washing or repairs
condominium legislation? to your townhouses bricks or whether the
Provincial and territorial condominium condominium corporation will be. You can find
legislation covers many important aspects about information about your units boundaries in
how condominiums operate, including the your condominiums governing documents.
powers of the board of directors. If you buy a freehold condominium and own
the land your home is on, your unit may
Have there been any situations in which the be the entire house including the exterior
board has drawn upon professional help? walls, the roof and the lawn. You may want
Board members knowledge of legal, financial to hire a professional surveyor to review the
and property management issues may be limited condominium corporations site plan so you
so it may be necessary to consult professionals know exactly where your units boundaries lie.
occasionally.
What is the difference between a
Is the condominium corporation involved in freehold condominium and a regular
any lawsuits? condominium?
If it is and it loses the lawsuit, a portion of all of The biggest difference is what is included as
the owners maintenance fees could go toward part of the unit. With a freehold condominium,
paying a settlement. This is one of the reasons you own the plot of land and any structure
why you should review the corporations on that land, such as a house or a townhouse.
liability insurance coverage. You are normally responsible for the care and
upkeep of the entire house, including the
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Condominium Buyers Guide
exterior walls and roof, as well as the lawn, heating and cooling systems maintenance;
garden, driveway and garage. Your monthly
condo fees go toward the upkeep of common
amenities (such as a swimming pool or
property elements such as recreational facilities party room);
or visitor parking. utilities;
With a regular townhouse or house cable and Internet;
condominium, your unit typically consists
of the interior of the house itself, while the insurance policies for the condominiums
exterior of the house and the plot of land on common areas;
which the unit sits are considered part of the
common elements. This means that repair security systems maintenance
and maintenance of items like exterior walls, and monitoring;
windows, lawns, gardens and driveways may salaries of employees (if there is a
be the responsibility of the condo corporation.
superintendent or security guards,
Due to the fact that condominiums are for instance); and
governed by provincial and territorial property management fees.
legislation, terminology that is commonly
used can vary from jurisdiction to jurisdiction. A portion of your condo fees will also likely
The term freehold condominium has go toward the buildings reserve fund. (Your
different meanings in different provinces. province or territory may have another name
In most jurisdictions, the term refers to a for this, such as contingency fund or capital
condominium where the unit holder owns the replacement reserve fund.) A reserve fund
house as well as the plot of land on which the ensures that the condominium has enough
unit sits. However, in others, the term includes money to pay for the major repair and
all condominiums where the land is owned replacement of the common elements over
by either the unit holder or the condominium
the life of the building. These may include
corporation. This is to distinguish freehold
the roof, roads, sewers, sidewalks, elevators,
condominiums from leasehold condominiums.
plumbing and other building systems. For more
With leasehold condominiums, the developer
information on reserve funds, see Is there enough
leases the land and the condominium
money in the reserve fund?
corporation is essentially a tenant.
To find out exactly what is and is not
What do my condo fees cover? included in your monthly condo fees, check:
Your monthly condo fees pay your portion of your disclosure statement (for new
the cost to maintain and repair the common condominiums);
property. These costs may cover:
your estoppel or status certificate (for resale
removal of snow, garbage and recyclables; condominiums); and
landscaping; the condominiums operating budget.
cleaning (carpets in common areas and
outside windows, for example);
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Condominium Buyers Guide
You can also find out more about your fees by Is there enough money in the
speaking with the vendor, property manager, reserve fund?
board of directors or the developer prior
The condominiums reserve fund provides
to purchasing a unit. Ask for confirmation
financing for major repairs and renewal projects
in writing.
over the life of the condominium building.
What can happen if I dont pay my The fund essentially ensures that the
condo fees? condominiums common elements will be
maintained in good shape.
Dont even think about withholding your
condo fees! They are neither optional nor The amount of money that should be in the
negotiable. For example, if you dont plan to reserve fund depends on:
use your buildings swimming pool, you must the condition and life expectancy of all of
still pay a share toward its care and upkeep. the common elements in the building; and
Likewise, being frustrated with the board
of directors, property manager or another the estimated cost to repair or replace them
unit owner doesnt allow you to stop paying over the life of the project.
your fees.
Condominiums often rely on a reserve fund
In some provinces, the condominium study to help them determine how much
corporation can register a lien on your unit money should be in their reserve fund.
if you do not pay your share of the common Reserve fund studies are carried out by
expenses. This means the corporation may have engineers or other professionals who assess
the right to sell the unit to recover the money the condition of the common elements of the
it is owed. It may also be entitled to charge building, estimating their remaining lifespan
interest and collect any reasonable legal costs and their related repair and/or replacement
and expenses it has incurred while trying to costs. They then estimate what monthly
collect the debt. or annual contributions will be necessary
for long-term renewal.
Suspension of voting rights can be another
unfortunate consequence of withholding Some jurisdictions have condominium
condominium fees. In some jurisdictions, legislation that requires that reserve
you are not entitled to vote if you are more fund studies be done on a regular basis.
than 30 days behind in your payments. Others leave it up to the owners to estimate
how much should be in the fund.
Many banks include provisions in their
mortgages that owners who are in default of Regardless of where you live, its essential
their condo fees are automatically in default that you find out the current state of the
of their mortgage. Depending on the amount condominiums reserve fund. Check the
owed, they may be at risk of foreclosure. disclosure statement or the estoppel or
status certificate for this information.
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Condominium Buyers Guide
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Condominium Buyers Guide
loss of use;
loss assessment property damage or
liability (when the corporations insurance is
invalid or insufficient); and
unit contingency (coverage if the
condominium corporations insurance on
your units structure is insufficient).
Condominium insurance requirements
vary across Canada. You should consult
your provincial or territorial condominium
legislation, your condominiums governing
documents as well as a condominium insurance
specialist to ensure sufficient coverage.
30
GLOSSARY
Bare land condominium a charge against the unit equal to the unpaid
contribution. The caveat can be enforced in
The boundaries of a bare land condominium
the same manner as a mortgage.
are defined in relation to the land, instead of
to a structure or improvement on the land. Chattel
A building that is constructed on a bare land
unit is considered part of the unit. A chattel is a piece of personal property
that can be moved, such as a refrigerator.
Board of directors In contrast, real property, such as buildings
and land, cannot be moved.
Each condominium has a board of directors
that is elected by, and generally made up of, Common elements or
the unit owners. The board is responsible common property
for administration and management of the
condominium corporation, including policy Common elements or common property are
and finances, as well as decisions about the the portions of the condominium that are not
maintenance and repair of the common owned by a unit purchaser as part of his or
property. Some decisions will directly affect her individual unit. They are co-owned and
your use of common property elements. generally shared by all the individual owners
Unit owners are usually entitled to one vote of the condominium corporation. They usually
for each unit they own for each position on (but not always) include such things as corridors,
the board of directors. elevators, recreational facilities, playgrounds,
lobbies, the grounds, parking and central
Bylaw heating and air-conditioning systems. What is
and is not included as part of the common
Bylaws govern how a condominium corporation
property elements must be listed in the
is run. They frequently cover matters such as
condominiums governing documents. It is
the election and duties of the board of directors,
possible that some of the common elements
how meetings are conducted and the collection
may be reserved for the personal use of one or
of condo fees. Provincial and territorial
several owners. They are known as restricted
condominium legislation specifies what matters
or exclusive-use common elements.
can be governed by bylaws. Legislation in
some jurisdictions does not make a distinction Disclosure statement
between bylaws and rules.
In some jurisdictions, the developer of a
Caveat new condominium must provide you with a
disclosure statement before the agreement of
In some jurisdictions, if an owner does not pay
purchase and sale is binding. The statement
his or her condominium fees, the condominium
includes, among other things, a summary of
corporation can file a caveat against the units
features or amenities, proposed commencement
title. The caveat is a legal notice that another
and completion dates for construction, the
party is claiming interest in the property.
condominiums governing documents and
Once the caveat is filed, the corporation has
budget for the first year after registration.
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Condominium Buyers Guide
32
Condominium Buyers Guide
Security
A security offers protection that an obligation
will be met. A developer may be required to
post a security, such as a bond or a letter of
credit, as a means of recourse should he or she
fail to complete construction as promised.
33
CONDOMINIUM
BUYERS GUIDE
Homebuying Step-By-Step
G
EBUYIN
HOM Y STEP
STEP B
k
or kboo
A Consu
de d W
an
mer Gui Planning to buy a home? Be sure to read this handy guide and workbook first.
Covers ten essential steps including determining your requirements, calculating
costs, arranging a mortgage and preparing an offer. Youll also learn what to
expect from real estate agents, builders and others in the home buying process.
Filled with handy worksheets and checklists to help you make the right decisions.
The complete Homebuying Step-By-Step guide is available in an instantly accessible,
interactive version you can start using right away at www.cmhc.ca
18-03-14
Visit us at www.cmhc.ca to find these and other
related housing information.