Owning a condo: what you need to know

Humber Bay, Toronto l Photo l Terry Mutuku

By Terry Mutuku

Are you a new comer, first time home buyer or just curious about owning a condo apartment? There are a number of basic things you should know about condos:

New condos
These are units that have recently been built and have never been occupied. Many people purchase new condos from builders while the development is still in the planning stage (commonly called “pre-construction” condos”).

Here are some considerations about new condos

  • A new unit may be less expensive because you buy it based on a plan and before it has been built.
  •  You may have different floor plans or layouts to choose from; different views and a greater choice of units.
  • You may be able to choose specific finishes such as colour, type of flooring, tiles, kitchen cabinets, etc.
  • You are entitled to receive a warranty when you purchase a newly built condo in Ontario. The warranty covers things like deposit protection, and compensation when you are unable to take occupancy of your unit because of delays or cancellation of a project; if the developer is unable to secure financing. (Read more about warranty coverage Tarion Warranty Corporation).
  • A new condo may take time to be completed, until you are able to take occupancy or ownership.  This can allow you time to pay deposits and full payment once the project is completed. However, this may also be a disadvantage as it may take several years to be completed; delays or sometimes cancellations. Any unforeseen delays during construction could postpone the date you take ownership of your unit.
  • You are entitled to receive a disclosure statement when you buy a new condo. You can cancel a sales agreement within 10 days after any significant change to the disclosure statement (called a “material change”).
  • You have the right to cancel the purchase within 10 days of receiving a copy of the fully signed purchase and sale agreement or the disclosure statement, whichever comes later. (This is called a “cooling off period”). If you cancel, the developer must refund any deposit plus any interest that may be payable.
  • If you occupy the unit as soon as possible, you must pay the builder rent until the builder registers the condominium corporation.
  • You may be required to move into a unit before you get title to your unit. Until the condominium corporation is registered, it cannot give you title to your unit. You may be required to pay occupancy fees for the unit until the title is transferred to you.
  • It might be difficult to get a mortgage for a condo that has not yet been registered.
  • A developer cannot terminate your purchase and sale agreement without your consent or a court order.
Humber Bay, Toronto. Photo l Terry Mutuku

Resale or pre-owned condo
These are units available for sale by the current owner – who typically lives in or rents out the unit.

Some considerations for resale condos:

  • You can see and inspect the unit and amenities that suit your lifestyle before you buy it (such as gym, swimming pool, entertainment theaters etc.).
  • Getting a mortgage for a resale unit should be easier.
  • You need a lower deposit for resale units.
  • When buying a resale condo, by law, you do not have a set time (“cooling off period”) when you can cancel your purchase without penalty.
  • You can get a more accurate sense of the common expenses fees you expect to pay. As a condo owner, you are responsible for payment of condo fees, maintaining and repairing your unit, paying any special assessments or liens.
  • Older units may have higher maintenance fees. As a building ages, more things need to be repaired or replaced.
  • Older buildings may not be as energy-efficient as newer buildings.
  • You can request a status certificate and learn more about the condominium corporation . The certificate indicates whether the corporation is well-run.
  • You can review the condominium corporation’s documents including its budget, reserve fund, declaration and description, by-laws, and rules to understand how they operate.
  • You don’t have to wait long to occupy your unit.

If you’re planning to purchase a condo or learn more about the condo market, call and/or connect with me. https://terrymutukurealestate.wordpress.com/

Source: Government of Ontario and Condominium Authority of Ontario

Wakenya Canada

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