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Buying a Condo in Toronto

When you buy a Condominium you are actually buying two things: your individual unit and a share in the condominium corporation that owns and maintains the land and all of the common elements such as elevators, outside grounds, security, parking etc. It is just as important that your condominium corporation is in good condition as your individual unit.

To find out the status of the corporation, you should request a 'Status Certificate' as part of your offer.

When looking at condominiums, you must also consider the building itself. The choice of the building has a big impact on your 'lifestyle'. The 'building lifestyle' is determined by three factors:
  • Amenities
  • Location
  • Mix of Owners

Condo Maintenance Fee
Why do they differ so much between buildings/corporations? In reality operating costs are virtually the same between buildings. What creates the difference is that some buildings include some or all utilities in the maintenance fees while other buildings have the individual owners pay the utilities directly. Secondly each building pays for different amenities such as 24 hr. security guard or none; valet parking; free shuttle bus; swimming pools etc. Finally each corporation is required to set aside a portion of the condo fees for a reserve fund to pay for major repairs in the future. Some corporations may not charge sufficiently for their reserve fund. To compare expenses between buildings, you must add your condo maintenance fees plus utilities you pay direct to get an accurate comparison.

Information on the status of the corporation including current condo maintenance fees is contained in a 'Status Certificate' for that corporation/building. Remember again that you should always request a Status Certificate as a condition of making an offer on a resale condominium property.

What are the advantages of buying a condominium?
Originally condominiums were developed as a cheaper form of housing. Instead of having to buy the land and the building, people could own their building/unit and share the land cost.

It then makes private ownership possible in areas where land values would ordinarily make this too expensive, like living downtown or in a popular community.

Today people buy condominiums as much for "Lifestyle" as they do for price. Downtown you can buy condos for over one million dollars quite easily.

Condo ownership also eliminates some of the problems of upkeep and maintenance often associated with home ownership, since the cost of maintenance is shared and is usually the responsibility of the Condominium Corporation through its property management (Lifestyle). For older people, condominiums represent an attractive ownership alternative when they spend extended periods away from their property.

Status Certificate
When purchasing a resale condominium unit, you should ensure that your offer is conditional on receiving and reviewing a Status Certificate and the accompanying documents, as required by the Act. The certificate is the resale equivalent of a disclosure statement and you must review all the material that comes with the certificate to ensure that you are satisfied that both the condominium unit and the condominium corporation are suitable for you.

This certificate, for which there is a fee of $100 inclusive of HST, must be delivered within 10 days of the request for it. It discloses whether the owner of the unit you are buying is current in the payment of common expenses as well as a picture of the condominium corporation's financial affairs. It is to be delivered with the documents, which govern the condominium corporation but are not attached. Once the list of agreements is reviewed, you or your lawyer may also wish copies of some or all of them for review. There can be an extra charge for these documents.

Common Questions:

Is there any warranty on my property?
Yes, the Ontario New Home Warranty Program (ONHWP) provides protection for condominium buyers of newly constructed residential units. However, ONHWP does not apply currently to properties which are renovated or built on existing foundations.

There are two ways in which the ONHWP provides protection:

It guarantees the buyer that any deposit or down payment made by the purchaser of a new condominium unit up to a maximum of $20,000 will be returned if the developer is unable to complete the transaction. It warranties construction of the units from the date of occupancy, and the common elements from the date of registration, for one year against most defects . . . for two years for the mechanical and electrical systems the building envelope and water penetration . . . and for seven years against major structural defects.

In addition, there is a warranty for substitutions of key elements in the unit made by the developer without the consent of the purchaser. For further information on what rights you have under the Warranty Program you can contact them at (416) 229-9200 or visit them here Tarion

How are common expenses determined?
The developer is responsible for allocating the contributions to common expenses to each unit. Usually the developer bases the allocation on the size of the unit; the larger the unit the greater the amount of payable towards common expenses. A developer however is not required to use this basis for common expense allocation.

A portion of the common expenses paid by the owners is transferred monthly to a reserve fund account. The reserve fund is the unit owners' savings for the major repair and replacement costs of the common elements which occur as a building gets older.

Who manages the property?
Usually, a property management firm, under the direction of the Board of Directors, runs the day-to-day affairs of a condominium corporation. Some condominium corporations are self-managed. The board is responsible for carrying out the obligations of the Corporation as set out in the Act, the condominium documents (declaration, by-law and rules) and any agreements to which the corporation is a party.

Do I have a say in what happens in the condominium?
Yes - You have the right to participate in the affairs of the condominium corporation.

Can I lease or rent the condominium unit I own?
Yes - An owner who leases his or her unit must give the corporation the name of his or her tenant(s) and a summary of the lease or a copy of the lease. The owner and the tenant are both responsible to the corporation. The tenant is bound by all the same documents as the owners