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What are condominiums?

Region: Ontario Answer # 413

The word “condominium” refers to a specific kind of legal ownership, and can include:

  • high-rise or low-rise apartment style buildings,
  • townhouses,
  • lofts, and
  • detached or semi-detached houses.

Each owner of a condominium unit owns legal title to his or her own unit, and all owners together own, and share the expenses of, maintaining a number of facilities in the building called “common elements.” Common elements usually include things such as gardens, parking areas, hallways, elevators, and recreational facilities.


Declaration, description, and the condominium corporation

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. It sets things such as the definition of units and common elements, outlines the division of ownership of each, and outlines how much each unit owner must pay in monthly condo fees.

In addition to these two documents, condominiums also have by-laws and rules. By-laws deal with matters such as the duties and powers of the board of directors of the condominium, collection of common expenses, and how meetings are conducted. Rules cover the everyday rights and obligations of the residents and owners of the condominium, including such issues as the ownership of pets, and what documents owners must file if they want to rent their unit.

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.



Common elements and monthly condominium fees

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.

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.

Status certificate

Buyers of resale condominiums should take extra care to fully investigate the financial situation of the condominium corporation before finalizing a purchase agreement. It is advisable that you and your lawyer examine the status certificate, formally called an estoppel certificate, and review the financial statements and the current budget. A status certificate contains basic and essential information concerning both the financial status of a particular unit and that of the condo corporation. In addition, it contains the condo declaration, by-laws, budget, reserve fund, insurance, management contract, rules, minutes of the last annual general meeting, and mention of any lawsuit involving the corporation.

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. To do this, the Agreement of Purchase and Sale should be conditional on the purchaser receiving a status certificate, having five days to review it, and being satisfied with its contents.

Purchasing a condominium involves many legal and financial documents. It is a good idea to have your lawyer assist you to ensure that you understand all the documents and obligations that apply to the condo and your unit. For more information, view Ontario’s Condominium Act, or refer to the Condominium Authority of Ontario (CAO) Residential Condominium Buyers’ Guide.


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