CMHC Condo Buyer’s Guide Revised

By Penny Munoz

If you’re looking to invest in a condominium, make sure you take a look at the updated Canada Mortgage and Housing Corporation (CMHC) Condominium Buyer’s Guide. The guide sets out to help potential homebuyers determine whether condominium ownership is the right choice by providing helpful information about what questions to ask and who to ask before making a purchase.

Broken down into five chapters for your convenience, you’ll find navigating through the guide very straightforward. Chapter one focuses on “Condominium Basics”; the benefits and downfalls of condominium ownership. The well known perks of a condo lifestyle, like the wide variety of available social and recreational entertainment facilities, superior security features and of course, low maintenance and repair responsibilities are reasons why people opt for condominium living. However, there are also weighty disadvantages that you’ll want to know about before making a purchase.

Familiar with the term ‘fee simple tenure’? If not, this chapter will clarify the meaning and implications of these legal terms. Chapter one also explains the types of condominium styles that exist from a structural perspective (whether it’s a low-rise or high-rise), if it’s a mixed-use or single-use building, and the types of ownership (new unit or resale). Having an understanding of these terms will help you identify strengths and weaknesses down the road.

Chapter two discusses all the roles of condominium governance. As a part of a condominium community, you will need to be sure to exercise your rights accordingly and be able to vote on matters concerning your lifestyle. It is important to know, prior to buying, how the condominium handles daily operations. This chapter also differentiates between condominium bylaws and rules providing helpful tips along the way that will help you determine whether that particular condo will match your personal lifestyle and habits (ie. How does the condo handle noise complaints? Pets? Parking?).

Now that you’re beginning to get a clearer sense of what it means to be a condo resident, chapter three highlights the pros and cons. After listing a detailed set of both the advantages and disadvantages, this chapter gives you a list of questions to ask yourself before making that final decision. If you like the idea of being involved in a close-knit community, with neighbours nearby at all times, are excited by the prospect of taking charge at community meetings and becoming engaged in recreational activities, then things are looking good so far. If you’re able to comply with the rules and restrictions set out in the condominium’s documents and understand that the board of directors are able to make decisions on your behalf, then, get ready to throw away your snow shovel and enjoy those amenities!

So, you’ve established that you’re ready to be a condominium owner, there’s still more you need to know. Chapter four gets you ready to purchase your condo once you’ve found one that appeases your financial and personal needs. Distinguishing the significant differences in whether you’re purchasing a new unit or a resale unit will help you address the corresponding difficulties you might encounter. The chapter warns that with new units you might be interested in finding out whether you’ll be expected to pay “phantom rent,” otherwise known as occupancy fees. These fees refer to the period of time between when you move into your condo and when you take ownership. The chapter will also outline the advantages and disadvantages of buying resale or new so that you can decide what is a better choice for yourself.

After you’ve read through and decided what type of condominium you’d like to purchase, it’s important to know what you can afford. Chapter four will help you by directing you to the CMHC’s free online calculator that will help you decide whether or not you’re financially ready to make this step. Then it will guide you through the down payment process, mortgage consideration, monthly condominium fees, property taxes and utilities. You can also expect to find essential information about insurance and who to seek professional guidance from.

If you’ve read and obliged with all of these steps you should be ready to buy that condo! Chapter five will provide you with a checklist, tips and FAQs to make sure you’ve completed every step correctly.

The CMHC is Canada’s national housing agency, established in 1946 as a governmental corporation. It is Canada’s largest provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs as well as housing research.