What exactly is a condominium?
A condominium is quite frequently confused with a building type when actually it is a type of ownership. Parts of the property (the units) are owned by individuals, and other parts (the common areas) are owned by all the unit owners. All of the owners are members of the condominium corporation which is the entity created by the registration of the condominium plan. Ownership of a condominium means you own your specific unit, plus you have individual interest in the common property. You have ownership over all the space and improvements within the walls of your unit.
Understanding the building's characteristics as well as it's financial position is important because you are buying the ownership in the building as well as ownership of the unit.
What are condo fees? A condo fee is a sum collected from the unit owners to pay for the management of the common property. Examples of things condo fees would include are: spaces and facilities outside the units such as elevators, heating and electrical systems, recreation rooms, landscaped areas, insurance and so on. Depending on the building type and condominium corporation, the condo fees will differ in what they cover. Each owner will also pay a different amount of condo fee based on their "unit factor". Unit factor represents each owner's share of the common property and are found on the condominium plan; this unit factor can be based on the unit's square footage or the initial market price of the unit in comparison to the rest of the complex. Each year the condominium corporation agrees on a budget for the complex and the fees are set according to the unit factor of each condominium unit.
Do condominium owners have to pay property taxes too?
There are also property taxes for condominiums; they are also calculated by using the unit factor.
What is a reserve fund?
It is a fund where money is set aside to use for repairs, maintenance, or improvements of the common areas. Usually the contributions made to this fund are taken from a unit owner's portion of their condo fees. In preparing the budget, it is important to assess the state of repair of the complex. It is also very important to make sure there is a reasonable reserve fund in place before buying into a condominium corporation, because if there is a unexpected major repair or shortfall, all the units would be assessed and expected to pay a share based on the repair cost. Condominium corporations usually plan for their future expenditures accordingly for their reserve fund.
Who manages condominium complexes?
The owners of the condominium either hire a management company, or the owners set up their own management group and manage the complex themselves.
What special documents are required for a condominium owner to provide when selling their condo?
- The registered condominium plan
- The current bylaws of the corporation
- Most recent financial statements and budget
- Statement showing amount of monthly condo fees and basis of determination
- Any minutes of proceedings of a general meeting of the corporation or of the board for the past 12 months
- Any special resolutions
- The insurance certificate
- Any lease agreement or exclusive use agreement with respect to the possession of a portion of the common property, including a parking stall or storage unit
- Any subsisting management agreement
- Any subsisting recreational agreement
- Statement of structural deficiencies that the corporation has knowledge of at the time of the request in any of the buildings that are included in the condo plan
- The most recent reserve fund report and plan
- Statement setting out the amount of any contributions dues and payable in respect of a unit
- The particulars of any action commenced against the corporation and served on the corporation
- The particulars of any unsatisfied judgment or order for which the corporation is liable
- The particulars of any written demand made on the corporation for an amount in excess of $500 that, if not met, may result in an action being brought against the corporation
Does a condominium owner need insurance, or is it covered in the condo fees?
It is the responsibility of the board of directors of the condominium corporation to make sure that there is sufficient insurance coverage, this is required by the Condominium Property Act. More complete coverage is generally specified in the bylaws of the corporation but usually property insurance provided by the corporation includes coverage of the entire physical structure of the building, including the units and common property. The corporation's insurance excludes the contents of each separate unit and any improvements owners make to the units. Since the condominium's insurance does not usually cover these areas, the owner of each unit should carry their own insurance. Like home ownership, the unit owner repairs the damage if someone else causes it, and recovers the cost from that other person. If a pipe breaks, or there is water seepage from an nearby unit, the manager and your own insurance company should be contacted. The insurance company will arrange for repairs and determine the liability.
What about having pets in condominiums?
Some condominiums allow pets with the permission of the Condominium Association. The Condominium Bylaws for the complex will specify if pets are allowed or if they meet certain criteria, eg dogs under 25 lbs are permitted, or cats only.
Do some condominiums have age requirements or stipulations?
Yes. There are some condominium complexes that specify age restrictions that are usually 18+ or 45+. Children are allowed for visits only for short periods of time as specified in the Bylaws. To verify these restrictions check the Bylaws on the Title.
Can you rent out your condominium?
A unit owner's right to rent out a unit is granted under the Condominium Act and neither the boarder nor the corporation can prevent this in their bylaws. There are requirements of a owner and rights of the corporation for rented units. An owner must inform the corporation of:
- Intent to rent the unit
- Amount of rent being charged
- Name of the tenant
- Address for service of the owner
- When the tenant vacates
