Things to Consider When Buying a Condo

Information provided by Kathleen Waters, vice-president, TitlePLUS

When you buy a condominium, you may find that you don't know where to start. Your real estate lawyer and the Condominium section of the Real Simple Real Estate Guide on titleplus.ca can help you to understand exactly what you need to know before you are ready to make your purchase. Here are some frequently asked questions to get you started:

What are the main differences between new construction, conversion and resale?

• A newly constructed condominium is a brand-new, modern building. Brand new condominiums are covered by the Tarion New Home Warranty Program. For specific coverage information, please go to www.tarion.com. If you purchase a new condominium, you may be allowed to customize your unit. If you purchase a unit from a plan, you should be aware that the plans may not reflect the actual floor area of the unit: The plan may not include the walls of the unit, where things such as the hot water heater, furnace and/or air conditioning unit will be situated or how low the ceiling will be to accommodate wires, pipes and ducts.

• A conversion condominium is similar to a newly constructed condominium, but the exterior of the building already exists. The developer modifies the building to create individual units and common elements. Conversion condominiums are not covered by the Tarion New Home Warranty Program.

• A resale condominium is an existing condominium. If you purchase a resale condominium unit, you will buy it from an existing owner, not the developer. You will be able to see the building and the unit before you decide to purchase. After the applicable warranty periods have expired. Resale units will not be covered by the Tarion New Home Warranty Program, on the assumption that they were covered when they were new.

• If you are buying a brand new condominium unit, you are legally entitled to a disclosure statement from the developer of the condominium. This is a package of information that provides details about the proposed building and the legal terms under which it will operate. After receiving it, you have 10 days during which you can rescind or try to re-negotiate the agreement of purchase and sale. During this time, review all documentation provided very carefully and consult with your real estate lawyer as soon as possible to determine if you need any detailed legal advice or negotiation services during this window of opportunity.

• When buying a brand new condominium unit, you also need to know if your development has plans for "phasing," or building new common elements, units or even entire new buildings on the same site. Phasing can affect your overall enjoyment of the property and/or result in delays in access to advertised amenities. It is important to be aware of other possible implications of phasing.

What is the difference between an interim closing and a final closing?

When you purchase a brand new condominium, there are usually two closings:

• The first closing, called the interim closing occurs on the confirmed possession date (also called the interim closing date) when the unit is ready for occupation. At this time, the purchaser is required to take possession of the unit, but the condominium has not yet been registered. After the interim closing, you can live in the condominium dwelling unit, but you do not yet own it: You occupy the unit more or less as a tenant. During this time, you will pay a monthly interim occupancy fee to the developer, for realty taxes, maintenance and interest on the vendor take-back mortgage.

• Once the condominium is registered, the final closing occurs. At the final closing, title to the condominium is registered in your name and, if you are borrowing money to purchase the condominium, your mortgage is also registered.

If you have questions about buying a condominium, speak to your real estate lawyer. If you need a referral to a professional real estate lawyer in your area, go to the Real Simple Real Estate Guide on titleplus.ca.