Condominium콘도미니엄 (콘도)

What is it?

A condominium (condo) is a way of owning property, not a type of building. The land and building are divided into "units" and "common elements". Each owner owns their unit alone, and all owners own the common elements together. High-rise towers are the best-known example, but townhouse complexes, low-rise buildings and even vacant land can be registered as condos.

In Ontario, the Condominium Act, 1998 sets the rules for creating and running a condo. When you buy a condo you get more than a home: you get a share of the common elements, a duty to pay your share of the costs, a duty to follow the rules, and the right to take part in how it is run.

What is yours and what is shared

Section 11 of the Condominium Act sets out who owns what. Where your unit ends is different in every condo, so check the declaration and the description (the plan).

A unit and its share of the common elements cannot be sold separately (s. 11 (4)). Your balcony is usually an exclusive use common element, not part of your unit.

The condo corporation and the board

The moment the developer registers the declaration and description, the land is divided into units and common elements and a condominium corporation is created (s. 2 (3)). The corporation’s job is to manage the property and assets on behalf of the owners (s. 17).

The corporation is run by a board of directors (at least three people) elected by the owners (s. 27). The board sets the budget, collects fees, hires the management company and makes rules. Day-to-day work is usually done by a condo manager. Since November 1, 2017, condo managers and management companies must be licensed by the CMRAO (Condominium Management Regulatory Authority of Ontario).

Three documents govern the condo: the declaration (the condo’s constitution: unit boundaries, each unit’s share and fee percentage, use restrictions), the by-laws (how the board is formed and operates) and the rules (daily-life rules on pets, noise, parking and so on). Rules must be reasonable and consistent with the Act, the declaration and the by-laws (s. 58). Owners, tenants and the board must all comply with them (s. 119).

Types of condos

The Act divides condos into freehold (the owners together own the land) and leasehold (the land is leased, and owners hold a leasehold interest in their unit and common elements). Freehold condos come in four types.

The Act has different requirements for each type. Check the declaration and the status certificate to see which type you are buying.

Money: fees, the reserve fund and special assessments

Owners pay the common expenses (condo fees) in the proportions set in the declaration (s. 84). You must pay even if you never use the amenities or are in a dispute with the corporation. Part of every fee goes into the reserve fund, the savings for major repairs.

If the budget falls short, the board can levy a special assessment without the owners’ consent. If you do not pay fees or assessments, the corporation gets a lien on your unit and can enforce it like a mortgage (s. 85). See "Condo fees", "Reserve fund" and "Special assessment" for details.

How is it different from a freehold home?

Some townhouses are condos and some are freehold. Check whether a listing says "condo townhouse" or "freehold townhouse".

Who oversees condos?

• The Condominium Authority of Ontario (CAO): the body designated under the Act. It provides information on owners’ rights and duties, mandatory training for directors, a database of condo corporations (the Condo Registry) and a dispute resolution system.
• The Condominium Authority Tribunal (CAT): an online tribunal for disputes about records, noise, odours, light, vibration, smoke, pets, and vehicles, parking and storage. It costs $25 to file, $50 for Stage 2 mediation and $125 for Stage 3 adjudication, $200 in total. You do not need a lawyer to apply.
• The CMRAO: licenses and disciplines condo managers and management companies. Complaints about a manager go here.
• New condos: Tarion (new home warranty and deposit protection) and the HCRA (builder licensing) are also involved. See "Tarion" and "HCRA".

What to check before you buy

1. Resale condo: make your offer conditional on reviewing the status certificate, and go through the declaration, by-laws and rules, the budget, the reserve fund and the building’s age, the fees, any lawsuits and the amenities with your lawyer. Make sure the rules fit your plans (pets, renting out, short-term rentals).
2. Pre-construction condo: you receive the builder’s purchase agreement, the disclosure statement, the condominium addendum, the HCRA information sheet, the Tarion warranty information sheet and the CAO’s Condo Buyers’ Guide. You have a cooling-off period of 10 calendar days to cancel for any reason. It starts once you have received all three of these: the purchase agreement signed by you and the builder, the disclosure statement and the Condo Buyers’ Guide. Your written notice must reach the builder (or its lawyer) within those 10 days. See "Cooling-off period" and "Disclosure statement".
3. Either way, have a lawyer who knows condos review the documents, look the builder up in the HCRA’s Ontario Builder Directory, and look the corporation up in the CAO’s Condo Registry.