- CMHC's condominium buyer's guide
- Chapter 1: condominium basics
- Chapter 2: condominium governance
- Chapter 3: the pros and cons of condominium ownership
- Chapter 4: buying a condominium
- Chapter 5: checklists, tip and FAQ's
- Tips for buying a new condominium
- Tips for Buying a Resale Condominium
- Checklist for buying a new condominium
- Checklist for buying a resale condominium
- Condominium purchase and recurring costs
- Physical evaluation checklist (for resale units)
- Questions to ask advisors and condominium experts
- Frequently asked questions
- Provincial and territorial fact sheets
BARE LAND CONDOMINIUM
The boundaries of a bare land condominium are defined in relation to the land, instead of to a structure or improvement on the land. A building that is constructed on a bare land unit is considered part of the unit.
BOARD OF DIRECTORS
Each condominium has a board of directors that is elected by, and generally made up of, the unit owners. The board is responsible for administration and management of the condominium corporation, including policy and finances, as well as decisions about the maintenance and repair of the common property. Some decisions will directly affect your use of common property elements. Unit owners are usually entitled to one vote for each unit they own for each position on the board of directors.
Bylaws govern how a condominium corporation is run. They frequently cover matters such as the election and duties of the board of directors, how meetings are conducted and the collection of condo fees. Provincial and territorial condominium legislation specifies what matters can be governed by bylaws. Legislation in some jurisdictions does not make a distinction between bylaws and rules.
In some jurisdictions, if an owner does not pay his or her condominium fees, the condominium corporation can file a caveat against the unit’s title. The caveat is a legal notice that another party is claiming interest in the property. Once the caveat is filed, the corporation has a charge against the unit equal to the unpaid contribution. The caveat can be enforced in the same manner as a mortgage.
A chattel is a piece of personal property that can be moved, such as a refrigerator. In contrast, real property, such as buildings and land, cannot be moved.
COMMON ELEMENTS OR COMMON PROPERTY
Common elements or common property are the portions of the condominium that are not owned by a unit purchaser as part of his or her individual unit. They are co-owned and generally shared by all the individual owners of the condominium corporation. They usually (but not always) include such things as corridors, elevators, recreational facilities, playgrounds, lobbies, the grounds, parking and central heating and air-conditioning systems. What is and is not included as part of the common property elements must be listed in the condominium’s governing documents. It is possible that some of the common elements may be reserved for the personal use of one or several owners. They are known as restricted or exclusive-use common elements.
In some jurisdictions, the developer of a new condominium must provide you with a disclosure statement before the agreement of purchase and sale is binding. The statement includes, among other things, a summary of features or amenities, proposed commencement and completion dates for construction, the condominium’s governing documents and budget for the first year after registration.
ESTOPPEL CERTIFICATE OR STATUS CERTIFICATE
Most jurisdictions require condominiums to issue information packages to prospective buyers. This package can contain the declaration, bylaws, rules and regulations, insurance information, reserve fund balance, other financial disclosures, legal description of the unit and management contract (if applicable). It may also include information about any legal filings or judgments against the condominium corporation, the possibility of common expense increases, special assessments or insurance claims, all of which could affect condominium fees.
“Fee simple” tenure is the most common type of ownership. Owners of single-family homes — who own both their home and the land it is on — hold the property in fee simple, for example. In contrast, condominium owners who own their unit but not the land on which the complex is built, do not.
Owners of freehold condominiums typically own their unit — such as a house or townhouse — as well as the land it’s on. They are usually responsible for the care and maintenance of their entire property, including the home’s roof and outside walls and the lawn, driveway and garage. Owners of freehold condominiums pay condo fees toward the upkeep of the corporation’s common property. There are exceptions to this definition in some jurisdictions, where a “traditional” condominium unit that has no plot of land is considered to be a freehold condominium (as opposed to a leasehold condominium).
These are the documents that describe how the condominium is organized and operated. They have different names in different provinces, but they can include declarations, bylaws and rules. They can contain provisions setting out the boundaries of the common elements and the individual units, the percentage of ownership each owner has in the common elements, the bylaws or budget and common expenses. Governing documents vary from one condominium to another and are filed with the land registry office when the condominium corporation is created.
A leasehold condominium differs from a freehold condominium because the land on which the condominium is situated is leased, instead of owned, by the developer. Buyers of leasehold units purchase an interest that has limited duration due to the length of the developer’s lease.
The property manager handles the day-today running of the condominium, such as hiring of staff, maintenance and repairs. The property manager is under contract to the condominium corporation. A representative from the property management company usually attends board meetings. Some condominiums may not have a property manager. These are sometimes referred to as self-managed condominiums. The board of directors, with the help of volunteers, will assume responsibility for the day-to-day management in these cases.
This is a fund set up by the condominium corporation in a special account to cover the costs of major repairs and replacement of the common property elements over time. Usually it is at least 10 per cent of the corporation’s total operating expenses, although the criteria vary among provinces and territories. In some jurisdictions, the reserve fund is called a contingency fund.
Reserve fund amounts and contributions are more accurately determined by a technical audit and reserve fund study undertaken by a qualified consultant.
Rules govern day-to-day life in a condominium and help ensure that the condominium is properly operated and maintained. Condominiums may have rules regarding the number of occupants per unit, pets, noise, parking, smoking and when various amenities may be used. Rules are usually easier to change than bylaws. Legislation in some jurisdictions does not make a distinction between bylaws and rules.
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.
Condominium corporations often own units that are for the use and benefit of all owners. These “services units” include amenities such as recreational facilities, laundry rooms, landscaping and roads.
Home sweet home. The unit is the area that you actually own and hold title to. Repair and upkeep of the unit are generally your responsibility.
Your unit factor is a percentage that represents how much of the condominium’s common elements you own or your “ownership interest.” It is typically based on your unit’s value (particularly its size and location) in relation to the total value of all of the units in the corporation. Your unit factor is used to calculate your monthly condominium fees.