Condominiums

Condominiums Registration of a condo needs two documents Declaration Description Resale condos must always be purchased with status certificate condition This purchase is conditional on approval of the status certificate by the buyer’s solicitor The status of the condo is very important because all condo owners are responsible collectively for debts against the condo

Condominiums Condominium Corporations (Condo Corps) are made up of individual units and common elements (except common element condos) It is not necessary that parking and storage be included with the unit, and if they are included, they may be owned or leased Most parking and storage areas in Toronto are owned and not leased Owners have exclusive possession of individual units under the Condominium Act

Condominiums Common Elements Owners of a condo are tenants in common for common elements of the condominium Registration of a condo divides it up into common elements and units Entire property in Condo Corp – individually owned units = common elements Examples include pool, stairwell, gym etc. Owners have undivided interest in the common elements, but they are also responsible for proportionate share of common expenses This is set out in declaration and not description Share depends on relative size of unit

Condominiums Each owner owns their unit and has undivided interest in common elements You can sell your unit but not your undivided interest in the common elements Reserve fund can only be used for replacement/major repairs to common elements and not adding new common elements To add new common element, at least 66% of individual owners must vote – it cannot come from reserve fund In a condo building with 30 units, if the condo corp comes up with an annual budget of $90,000, each condo will have to pay 1/30 of it or $3,000 annually

Condominiums Owners may have exclusive use of some common elements such as parking spaces and balconies Approval of owners not needed by Board of Directors to make changes to common elements unless owners vote against proposed work Board has power to decide on behalf of owners Owners can make changes to common elements themselves but subject to Board Approval Buyers must review status certificate to determine their rights with regards to the common elements E.g. whether owner/visitor parking space is provided, if there are any limitations on the kind of vehicles allowed etc.

Condominiums Parking There are four types of parking Freehold - Unit owner owns parking space This ownership is detailed in the unit’s title It may also be detailed in a separate title – parking space can be sold without selling the unit Leasehold – Condo Corp owns parking and leases them to individual unit owners Exclusive Use Common Element – Condo Corp owns parking and grants exclusive use as per the declaration Allocated/Assigned – Condo Corp owns parking and uses its discretion to assign spaces to individual unit owners

Condominiums Locker/Storage There are four general types of storage: Freehold – unit holders own the lockers Leasehold – Condo Corp owns the lockers and leases them out to individual unit holders Exclusive Use Common Element – Condo Corp owns the lockers but people have right to use specific spaces as per the declaration Assigned/Allocated – Condo Corp has discretion to assign the lockers

Condominiums Types of Condos Leasehold Condos – landlord owns land and grants developer 50-99 year leases Leasehold cannot be less than 39 years and 364 days Leasehold cannot be more than 99 years Developer develops land and sells assignment of their interest as tenant under lease to the occupier Owners can transfer/lease/alter their interest without consent of landlord (very common in Hawaii) Freehold Condo Freehold Standard – created before new Condominium Act

Condominiums Freehold Common Element Owners have common interest in all common elements No units b/c units in Condo Act mean interest in the corp Attractive because builder does not need to satisfy municipal road standards required in traditional subdivisions Each owner who has interest in common element must own freehold property to which common interest is attached If registration of description and declaration are completed, the common interest attaches itself to the property of the owner and remains attached even if the property is sold (they cannot be severed and are referred to as Parcel of Tied Land or POTL) Golf course, Ski hill, road or park may be common element condominiums- owners must pay for repair, modification and maintenance

Condominiums Freehold Vacant Land This is a condominium that provides for development/sale of units without actually completing the structure Developers often market and sell individual units before actually even starting construction Title may transfer to buyers even though construction will happen at a later date Declaration will describe future construction and limit various aspects of it, such as size, quality, design etc. Unit owners must obtain insurance for building/structure Bylaws may determine minimum maintenance payable Some kind of security must be provided for future construction such as a bond (promise to pay) OR actual construction must start before registration

Condominiums Freehold Phased Declarant may make additional units/common elements as per Condo Act by registering amendment to both the original declaration and the description This gives declarants flexibility by allowing registration of initial development and to bring more units/common elements at a later date This helps produce economies of scale (mass production) and reduces need for multiple Board of Directors, and also allows for bulk buying advantages (reduced costs)