Condo living has become increasingly popular as a low maintenance housing option, often offering a complete community within one complex, including a wide range of social, entertainment and recreational activities. Many condominium buildings also offer enhanced security features, such as a 24-hour concierge or security guards, so they’re particularly popular with first-time buyers, especially single young women who may not feel comfortable living alone in a single-family home. However, buyers considering condo living should be aware of certain issues surrounding both the purchase of, and the lifestyle in, a condo building.
What exactly is a “condominium”?
Condominium refers to a form of ownership, rather than a style of building, as some people mistakenly believe. When we hear the word “condo”, the idea that usually springs to mind is one of high-rise apartment-type buildings. However, this form of ownership also applies to certain townhouse complexes, or even semi-detached and detached individual houses within a complex.
Condominiums consist of two parts: the first is the actual collection of private units, and the second is the common elements of the building or complex, which may include lobbies, recreational facilities, gardens, walkways, etc. The private units are owned by, and registered in, the name of the owner of the unit. The common elements part is shared amongst the individual unit owners, as is the cost of maintaining, operating and if necessary, replacing these common elements. Each unit owner, therefore, holds an interest in the common elements of the building, which is usually calculated in proportion to the value of the owner’s private unit in relation to the total value of all the units in the condominium corporation. This ownership interest, often referred to as the “unit factor” will tell you what the owner's ownership percentage is in the common elements and will be used to calculate his/her share of the monthly fees associated with maintaining, operating and replacing them.
The unit owners’ collective interests are represented by a legal entity known as a condominium corporation, consisting of a board of directors elected by and generally made up of the individual unit owners. Each unit owner has voting rights, which are usually in proportion to their unit factor.
Every condominium is governed by its own unique rules, regulations and bylaws. These may be very strict when it concerns issues such as the appearance of the condominium and or the occupancy of the individual units – for example, they can require all the exterior doors of the units to be the same colour; or they may restrict the number of occupants per unit; or the number, type or size of any permitted pets. Other common restrictions include noise, parking and the time of day that certain amenities may/may not be used, such as a swimming pool or gym for example.
The condominium corporation will also hold essential documents about the condominium, such as the status certificate, which contains crucial information about the condominium corporation’s management structure, unit leases, common expenses, insurance, the operating budget, any legal issues or proceedings, the corporation’s reserve fund, and any pending or forthcoming repairs or maintenance projects, to name a few.
If you are considering purchasing a condo, whether for your own personal use or as an investment property, there are a number of options available to you, such as buying off plan from a developer, buying a pre-sale re-sale unit (known as an assignment sale), or buying a re-sale unit. All options have their pros and cons, and it’s advisable that you consider them before making your choice. I would be happy to meet with you and give you all the necessary information, so that you make an informed decision regarding which option is most suitable for you.