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Ontario|Real Estate LawCondominiums 413 What are condominiums? The word "condominium" refers to a specific kind of legal ownership, and can include apartment style buildings, townhouses, and lofts. Each owner of a condominium unit owns legal title to his or her own unit, and all owners together own a number of facilities in the building, called "common elements". Common elements usually include things such as gardens, parking areas, elevators, and recreational facilities. In most condominium corporations, each owner is responsible for the maintenance and repair of his or her own unit and the corporation is responsible for the maintenance and repair of the common elements.
New condominiums are legally created once two documents are registered. These are the description and the declaration. The description consists of building plans and a property survey. The declaration is the equivalent of a constitution of the condominium corporation and may include restrictions that apply to condominium residents. For example, the declaration may include a prohibition against the keeping of pets. In addition to these two documents, condominiums also have by-laws and rules dealing with matters such as the duties and powers of the Board of Directors of the condominium and the everyday rights and obligations of the residents and owners of the condominium.
Each condominium development becomes a condominium corporation when the declaration and description are registered. All condominium owners are owners in the corporation and are given rights to vote on certain matters. The directors of the corporation, who are elected by the owners, handle the day-to-day running of the condominium.
To pay for the general maintenance and upkeep of the common element facilities, condominium residents pay monthly common expenses. The amount of each resident's common expenses will usually depend on the size of the unit, and the types of facilities offered by the condo. For example, condos with swimming pools and entertainment centers will generally have higher monthly common expenses than buildings without these facilities. These monthly fees can amount to quite a significant cost, so it is important to be aware of them before purchasing a condominium unit.
Buyers of condominiums should take extra care to fully investigate the financial situation of the condominium corporation before finalizing a purchase agreement. For example, you or your lawyer should examine the Estoppel Certificate and review the financial statements and the current budget. You should pay particular attention to the reserve fund of the condominium corporation and ensure that there are sufficient funds to cover ongoing maintenance and repair of the condominium's major capital items. In order to do this a purchaser's Agreement of Purchase and Sale must be conditional on the purchaser receiving an Estoppel Certificate, having five days to review it, and being satisfied with its contents.
If you are purchasing a condominium, your lawyer can help you to understand all of the documents and obligations that apply to the condo and your unit.
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