Condo Buying: Brush Up on the Basics
By on Jun 19, 2008
Information provided by Kathleen Waters, vice-president, TitlePLUS
No matter if you're a seasoned homebuyer or a first-timer, you need to know about the many unique aspects of purchasing a condominium before you buy one. A good first step is to familiarize yourself with some condo basics, as outlined in this article. Then, before you buy, talk to your real estate lawyer who will not only be able to answer your questions but may also raise some specific issues you?ll want to discuss with the seller (or developer) before you ink the deal.
What is a condominium?
A condominium is a residential structure in which the living space called the ?unit? (e.g., apartments or townhouses) is individually owned as a piece of real estate while the land and common elements (e.g., elevators, hallways and/or sidewalks) are jointly owned by all of the unit owners.
A condominium unit could be a suite in a high-rise tower, a townhouse or even a detached house. Each unit is given a legal description based on the space that it occupies.
Storage lockers and parking spaces may also be created as units within the condominium or they can comprise part of the common elements designated for the exclusive use of a specific dwelling unit.
The condominium corporation operates the condominium and the land. The unit owners elect a board of directors to oversee the running of the condominium corporation, including financial decisions. The board may contract out the day-to-day workings of the condominium (e.g., paying of utility bills for the common elements, cleaning the common elements, snow removal, etc.) to a property manager or property management company, or may run the day-to-day workings of the condominium itself.
What kind of condominium do I want to purchase?
Common elements condominiums: In a common elements condominium, you own the freehold land and the building(s) on the land. There are no specific units. You also own a percentage interest in the common elements. For example, homes could be freehold but roads and facilities, such as a recreational centre, could be common elements.
Phased condominiums: In a phased condominium development, different parts (e.g. new units or new recreational facilities) of a single condominium can be built in phases. As each phase is constructed, it is added into the already existing condominium corporation.
Vacant land condominiums: In a vacant land condominium, you purchase the land as a unit in the condominium. Then, you may decide what type of structure, if any, will be built on the land, subject to restrictions in the condominium?s Declaration.
Leasehold condominiums: In leasehold condominiums, you own a unit and a share of the common elements, subject to the ground lease of the property on which the units and common elements are constructed. The initial term of the lease must be between 40-99 years, and the owner of the leasehold unit can sell, mortgage or lease the unit without the consent of the landlord.
Standard condominiums: Standard condominiums are those that aren't defined as the other types of condominiums (i.e., common elements condominium, phased condominium, vacant land condominium or leasehold condominium).
Understanding what you are buying will ensure you enjoy living in your new condominium. For more information on buying a condominium, check out the Real Simple Real Estate Guide on titleplus.ca or contact your real estate lawyer.
