Buying a condo
Purchasing a resale unit involves buying a unit from its current owner rather than from the developer. It’s important to be armed with the right information when doing this. Research the unit, condo corporation and consult a legal professional before making any decisions.
Buyers should consider the following before committing to a purchase:
The status of the reserve fund and age of the building
A reserve fund is required to ensure the condo corporation has sufficient money to pay for major repairs and replacements of common elements. Consider whether the reserve fund can address any significant repair, maintenance or updating.
Also called condo fees – these are fees owners pay toward the operation of the condo corporation and include cost for security, cleaning and contributions to the reserve fund. Make sure to consider these fees when considering purchasing a condo. Common expense fees may change over time depending on the needs of the condo corporation. An extra one-time charge called a special assessment may be added to your condo fees if the corporation can’t cover its costs.
The units and common elements
The size, layout, and boundaries of the unit and the common elements generally will not change. You may wish to consider your responsibility to repair and maintain these.
Owners must pay for the common elements, regardless of whether you use them or not.
Be aware of any litigation against the condo corporation or that the corporation is a party to, as owners may become responsible for the costs. Special assessments could be levied to cover litigation costs.
New Home Warranty
Consider whether the unit is still covered by any remaining new home warranties and protections under the Ontario New Home Warranties Plan Act. There are three different warranty periods that cover different types of defects, the longest of which is seven years. The maximum statutory coverage available is $300,000.
Documents to review
Owners must abide by their condo corporation’s declaration, by-laws, and rules:
- The declaration is the foundational document of the condo corporation and includes, among other things, the proportion each unit owner contributes to common expenses and the repair and maintenance responsibilities of owners vs. the condo corporation. The declaration may also include information about how units and common elements can or cannot be used.
- The by-laws specify how the condo corporation governs and operates
- The rules may govern what the owners and occupants can and cannot do in their condo. Rules tend to cover things like use of amenities.
A status certificate contains important information about the unit and corporation including the corporation’s budget, a statement on the reserve fund, any legal issues and more. Anyone can request a status certificate for a unit from a condo corporation for a fee. A condo corporation can charge up to $100 (including all applicable taxes) for the status certificate. The corporation must provide the status certificate within 10 days of receipt of the request and payment for it.
You can also access other key information on any condo corporation through CAO’s Condo Registry or may consider speaking to a legal and real-estate professional before you sign any documents.