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Condominium living is different from owning or renting a detached house, townhouse or apartment because condos have a dual nature. Condominium owners hold title to their units and share responsibility for the operating costs of the balance of the property (common elements such as lobbies) that makes up the condominium.
There are many advantages to condominium ownership. It may be less expensive than other types of home ownership and it can provide an “instant” sense of community. While someone else is shoveling the snow, you can participate in community decision-making.
But condominiums are not everyone’s cup of tea. Condominium corporations may set restrictions on such things as owning pets or having an outdoor barbeque.
Whether you’re a first-time buyer or have lived in your condo for years, the Condominium Act, 1998 is designed to protect your investment, improve the day-to-day operation of your condominium and allow for new kinds of condominium developments.
Types of Condo's
The legislation makes possible different types of condominium developments:
Phased condo. Although you may have seen condos advertised as “phased” in the past, today they are separate condominium corporations. Under the Condominium Act, units and common elements can now be added in stages, over a maximum 10-year period, as part of one condominium corporation.
Common elements. These are condominiums that consist only of common elements, but no units. For example, homes could be on separate pieces of land, with facilities such as a golf course or recreational centre as the common elements condominium.
Vacant land condo. Under this type of condominium corporation, the units can consist of vacant land upon which, following registration, owners can decide later what to build. This may be suitable for a mobile home development, for example.
Leasehold condo. These are units built on land that is leased by the developer to purchasers who will never own the land. They buy a leasehold interest in the unit and common elements for a fixed number of years. This interest can be sold.
Repair and Maintenance
Unless otherwise specified in the declaration, the corporation is obliged to repair the units and common elements after damage. Improvements such as upgraded flooring, cabinets and fixtures are not covered.
The board may pass a standard unit by-law detailing what constitutes a unit and what constitutes improvements. The corporation is required to maintain the common elements and the owner is required to maintain his/her unit. However, see section 91(b) of the act – the declaration could stipulate that the owner maintain the common elements
The corporation is required to establish a reserve fund for the major repair and replacement of common elements including the roof, exterior of the building, roads, sidewalks, sewers, heating, electrical, plumbing, elevators, laundry and recreational facilities.
Before any of the reserve fund is spent, the corporation must ensure a professional (e.g. architect, engineer) conducts a reserve fund study. The corporation is required to conduct studies at periodic intervals to ensure that the fund is adequate. The act stipulates that a qualified person, such as an architect or engineer, must conduct the study.
A physical site inspection must be done to provide an estimate of the expected life of the major components of the corporation, together with an estimate of the replacement cost of each component. This study shall be presented to the board.
Within 120 days of receiving the reserve fund study, the board shall propose a plan for future funding so that the fund will be adequate to meet the requirements of the study.
Within 15 days of proposing the plan, the board shall send a notice to the owners containing a summary of the plan and areas, if any, where the proposed plan differs from the study. The board shall implement the plan 30 days after sending the notice to the owners.
New condominiums must complete a study within one year of registration and the fund must be fully funded by the end of the following fiscal year.