Buying a condominium is somewhat like buying stock in a new company; you
shouldn’t invest your lifesavings in either unless you are satisfied that it is a
sound investment and that means asking questions.


Moving into a condominium involves trading some of the privileges you might
enjoy by owning a ordinary home, such as choosing the colour of paint for your
front door, for the benefits of condominium living, (somebody else has to paint
the door!). While some people may be concerned about the restrictions that
sometimes apply to the condominium lifestyle there are many advantages,

      relief from maintenance and repairs;

      enjoyment of recreational facilities;

      security;

      a sense of community that, all too often, is not present in normal
       subdivision developments;

      the comfort in knowing that the condominium has certain rules that will
       ensure your enjoyment of your unit and the common elements, which are
       not available in normal subdivisions; and

      the ability to exercise some control over your living environment by
       utilizing your voting privileges.


Start by talking to a realtor who is experienced in condominiums and explain
what it is you are looking for, (e.g. a downtown loft close to the subway or a town
house near a school). Retain a real estate lawyer who is also familiar with
condominiums before you make an offer. You will only have a matter of days to
firm up a conditional offer and you can waste precious time searching for one
who can help you


Up until the time the current Condominium Act came into force, all condominiums
were treated the same, regardless of whether they were a high rise tower or a
townhouse or bungalow unit. The new Act now recognizes five (5) different types
of condominiums which are briefly described as follows:

      Common Elements Condominium: this is a condominium where there
       are no “units”. Instead an interest in the common elements is attached to
       an adjoining, piece of land referred to as a “Parcel of Tied Land” or
       “POTL”. The POTL is usually a freehold detached home.

      Vacant Land Condominium: a vacant land condominium is a
       condominium in which there are both common elements and “units”
       however, the units are actually created as a piece of vacant land, similar
       to buying a vacant lot in a subdivision, upon which the owner will have a
       house constructed. The “unit” would then include all of the land in its
       boundaries as well as any dwelling units or other structures constructed
       on it.

      Leasehold Condominium: this is a condominium in which the ownership
       of the land upon which the condominium buildings are constructed will
       remain with a developer or be owned by investors. The owner then leases
       the land and buildings to the condominium corporation for a minimum
       initial term of forty (40) years. Purchasers will then acquire a leasehold
       interest in their unit. The corporation will pay rent to the owner from the
       common expenses.

      Phased Condominium: a phased condominium is a condominium
       corporation that is built in stages. When stage one is complete, a
       condominium corporation is then registered to include the units that have
       been constructed. The developer can then build the next stage. Once it is
       completed, it is then merged into the original corporation and so on until all
       of the condominium units are completed.

      Standard Condominium: essentially, a standard condominium refers to
       all condominiums other than the ones noted above. All condominiums that
       were in existence prior to May 5th, 2001, are considered standard
       condominiums regardless of where the boundaries of the unit would be.

These are the legal terms used to describe the type of condominium that you
might be purchasing. However, there are many different “styles” of
condominiums such as, high-rise, low-rise, loft, townhouse, bungalow, detached
home, work/live (i.e. commercial unit on ground floor with residential living space
above), recreational (e.g.. cottages), commercial and industrial, as well as
combinations thereof. One thing to remember is that regardless of the style or
type of condominium, they are all governed by the Condominium Act, 1998, as
well as the governing documents for the individual corporation, which includes
the Declaration, the By-Laws and the Rules.

You can find out a great deal of information about a condominium by purchasing
a “Status Certificate” from it. They cost $100.00, and are worth every penny. You
should buy one before you firm up your offer. The simplest way to do this is to
have your agent make the offer conditional for 10 days to allow you to obtain the
certificate, review it with your lawyer and be satisfied with its contents and

These certificates contain, among other things:

      confirmation of the amount of the reserve fund;

      whether the unit you are buying is up-to-date for common expense

      whether there are any large increases in monthly common expenses
       being considered;

      whether there are any special assessments being considered;

      whether the corporation is a party to any legal actions;

      a copy of the current budget;

      the most recent audited financial statements; and

      copies of the condominium’s Declaration, By-laws and Rules

   (Tip: Read the rules carefully: if you don’t think you can abide by them look
   somewhere else but also keep in mind that all condos have rules.)


Local or provincial real estate associations, such as the Toronto Real Estate
Board, (TREB) or the Ontario Real Estate Association, (OREA) have developed
standardized forms specifically designed to be used when purchasing a
condominium. Make sure the offer you are making is the one used locally for
condominiums. Ensure your offer contains a condition allowing you time to get a
status certificate and get it to him/her promptly so they have time to review it and
discuss it with you. Watch out for standard clauses that are crossed off when the
offer is returned and discuss them with your lawyer. If you are borrowing money
from a bank for your purchase make sure you know how much you will be able to
borrow and are pre-qualified for the loan before you make an offer.

A Disclosure Statement is a package of information about a new condominium
that is to be built or is under construction. It contains much of the same
information as the Status Certificate. When buying a new condominium unit from
a developer, a purchaser is guaranteed a 10-day “rescission” period within which
they can review the Disclosure package, preferably with your lawyer. If you don’t
like what you see, you can rescind your offer to purchase and get your deposits
back if you do it within the ten day rescission period.


In a seller’s market, it is often difficult to negotiate any changes to the sales
agreement being offered by the developer, however, there is no harm in asking.
As an example, most agreements contain provisions setting out what additional
costs may be charged back to the buyer at the time of final closing. These are
called “adjustments”. It may be possible to negotiate some of these charges.
These provisions must be read carefully as they can easily add several thousand
dollars on to the purchase price. Make sure you have your lawyer review the
Agreement; he or she may have additional recommendations.

You will also be asked to make additional deposits, so make sure that you have
funds available to meet all deposit requirements before you firm up your offer.

In a new condominium, it is not unusual for you to be asked to take occupancy of
the unit months before the developer is in a position to transfer the ownership of
the unit to you. During this “occupancy period” you must pay an occupancy fee,
(similar to rent), to the developer. When budgeting for your purchase, you should
ensure that you have at least three - six months’ worth of occupancy fees


When you purchase a condominium unit, you automatically become subject to
the provisions of the Condominium Act, 1998, which governs all condominiums in
Ontario. The current Act includes provisions that, among other things provides for
penalties for non-payment of common expenses or violations of the Corporation
Rules and Regulations. The Act ensures that the condominium has sufficient
funds to operate, that everyone pays their fair share of that cost and obeys the


The Declaration is the document that creates the condominium corporation in a
similar manner as Articles of Incorporation gives life to a private company. It will
contain certain mandatory provisions as legislated by the Condominium Act
1998. It will contain a specification of the boundaries of your unit, the percentage
used to calculate the monthly common expenses for your unit and other
restrictions and obligations that may affect the use of your unit. It should be
reviewed carefully.

By-Law's set out the basic organizational and administrative functions of the
Corporation, including the duties of its Board of Directors and officers. The by-
laws also make provision for calling owners' meetings and for the election and
qualification of the Board of Directors.

All condominium corporations have rules which form the standards of behavior
for the community. These govern the day-to-day use of your unit and the
common elements. Without being specific, most Corporations’ Rules contain
provisions prohibiting the causing of any nuisance, excessive noise or any other
disturbance which may interfere with the use and enjoyment of the units by other
unit owners. Other rules may relate to parking, pets, use of BBQ’s and the use of
common amenities, (e.g. swimming pool, spa, work shop, etc,…).

You have the right to insist that the Declaration, By-laws and Rules be complied
with by all other unit owners, tenants or other residents of the condominium
complex and, yes, you should care because the other owners can insist that you
abide by them as well.

10. WHAT ARE COMMON EXPENSES? (Monthly Maintenance Fees)

These fees provide the condominium with the cash necessary to maintain the
common elements, fund the reserve accounts, pay for property management and
generally operate the Corporation. Upon purchasing your unit, you will become
responsible for making common expense payments to the condominium
corporation. For re-sale condominiums the amount of the fees will be set out in
the Offer to Purchase. For newly constructed condominiums they will be
estimated based upon the draft budget in the disclosure statement. For new
condominiums don’t be surprised to see them go up by 25%-30% (or more) in
the second year as the budget for new condominiums may be drafted years in
advance and may not anticipate increases in utilities and other operating

The amount of common expenses can vary greatly depending the size and type
of condominium that you are looking at and the amenities, if any, that it contains.
Generally speaking the old adage, Ayou get what you pay for@ is very applicable
to condominium common expenses.

(Tip: for new condominiums take the estimated common expenses and increase
them by 50%. If you can still afford them, you should be fine for a number of

The Reserve Fund is a trust fund established by condominium corporations to
anticipate extraordinary costs for major repairs to the capital components of the
condominium=s common elements. At least ten percent of your common
expense payments must be deposited directly into the Corporation's reserve
fund. Most condominiums contribute much more to the reserve than 10%.
Whether the Reserves are adequate is difficult to predict as there are too many
variables which may affect its size but generally speaking, the bigger the
Reserve Fund the better, (other than in brand new condominiums which will
naturally start off with a small reserve).


The majority of condominiums in Ontario are governed by an elected Board of
Directors. The board members are usually other owners in the condominium.
They are elected by the owners at the Annual General Meeting, (“AGM”) of the
condominium. They are given the responsibility of administrating the
condominiums’ business and financial affairs. You should remember they are
volunteers, they usually don’t get paid for the job and they are your neighbours,
so support them and give them the respect they deserve.

All condominiums are administered by an elected board of directors but they
cannot be expected to undertake all the tasks there are in running the
condominium on a day to day basis. As such many condominiums hire
professional property management companies to assist them. The Manager's
role, among other things, is to oversee the day to day operation of the
Corporation, see to the collection of common expenses, advise the Board of
Directors, assist in the preparation of budgets, and attempt to enforce the Rules.
The Property Manager can be a valuable source of information about the
condominium and you shouldn’t hesitate to call him or her if you have questions
concerning the unit or the condominium.


The Condominium Corporation is responsible for insuring the common element
areas and the unit. This insurance coverage includes public liability for those
areas. However, you are responsible for obtaining your own insurance for your
contents and any improvements that have been made to the unit since it was first
constructed, (e.g. new carpeting, wall paper or new fixtures). In addition, you are
responsible for obtaining personal liability insurance for your unit. You must
obtain a proper condominium unit insurance package and NOT a "tenant’s

The only exception to this general rule is for common element condominiums and
vacant land condominiums. In both of these types of condominiums the owners
do have to insure their own home.

(Tip: Consider getting your unit insurance from the same company that insures
the condominium; this goes a long way in eliminating disagreements over which
policy covers the damage.)


Generally speaking you can decorate or renovate your unit as you see fit
although the condominium may have rules about the time of day that such
renovations can take place. If the renovations’ are substantial and/or affect
structural components of the unit, other units or the common areas, you will likely
need permission from the Board of Directors in advance. They may also require
you to sign an agreement made in accordance with s. 98 of the Condominium
Act, 1998 and have that agreement registered on title to your unit.


      MOVING: Some high-rise condominium developments have specific rules
      about when you can move your belongings in. You should contact the
      manager or superintendent for the building directly to make your moving

      ELEVATORS: In high-rise developments, you are typically required to
      reserve the elevator well in advance of your moving date. Most
      corporations charge a security deposit for use of the elevator.

      UTILITIES: In some condominiums utility charges and cable t-v are
      included in the common expense, you should ask the Vendor or the
      Manager of the building what might be included. This is more common in
      high-rise developments. Smart meter legislation will likely require almost
      all high rise condominium unit owners to pay for their own electricity at
      some point in the near future,

      KEYS: Some condominium corporations require that Vendors turn in their
      security keys, garage door openers, pass cards, etc., to management at
      the time they move out. Therefore, you may have to make arrangements
      with management to obtain your security keys from them before moving
      in. Most high-rise and some other condominium corporations require that
      you must provide the corporation with a key to your unit or ensure that the
      master key for the condominium fits your lock.

      PARKING: Almost all condominiums have restrictions on the availability of
      parking. If you have two cars but only one parking space designated for
        your use don=t count on being able to park your second car in a visitor=s
        parking space or another owner’s space. If you do your car can be towed.
        Some restrictions also apply to parking commercial vehicles, recreational
        vehicles, trailers and boats. If this is a concern ask management or
        someone on the board.

        PETS: Some condominiums prohibit owners from having any pets. Many
        more have rules governing the number, type or size of pets. All
        condominiums have rules governing the keeping of pets which if broken
        can lead to removal of the pet from the complex. If you have a pet make
        sure you understand what the rules are and let your realtor and lawyer
        know so they can verify that pets are allowed.

        MAINTENANCE AND REPAIR: In most condominiums the corporation is
        fully responsible for the maintenance and repair of the common elements.
        In some, however, these duties may be shifted back to the homeowner to
        some extent. If you are concerned about this type of thing you need to talk
        to the vendor and the property manager to confirm who is responsible for


Condominium is a lifestyle that is enjoyed by millions of Canadians. There are
many types and styles of condominiums available on the market today that will
suit almost anyone=s needs, (and more to come). There is no question that
condominium living is becoming the lifestyle of choice for many Canadians both
young and old, but the key to successful condominium living is knowing what you
are buying into so research your condominium choice thoroughly before signing
on the dotted line.

RON DANKS is a partner with the Hamilton/Burlington business law firm of Simpson Wigle LLP. He can
be contacted at

                 JOIN CCI today! Check us out at www.ghccci-org.

To top