Opening doors

Condominiums

 

AND WHAT ABOUT CONDOMINIUMS?

 

What if the home that you are buying is a condominium?  Ownership of a condominium differs from ownership of a single family home.  There are numerous questions that are asked of lawyers and agents alike about the differences between the purchase of a single family home, and the purchase of a condominium.  It may be helpful to those purchasers considering this type of ownership to understand some of these distinctions.

 

What am I buying?

 

Condominiums have been created by an act of the Legislature.  The Condominium Act  allows a person to own and occupy an air space.  The condominium unit you are purchasing is described as the air space between the interior surfaces of the actual unit or townhouse. 

 

The best way to describe the form of ownership is to say that you have exclusive ownership of the space within your unit (“air space”), and you have ownership in common with all of the other owners within the condominium building of the structure as a whole and the land on which the structure sits.  As you can see, you are not buying land in the traditional sense. 


What are “common elements”?

 

When you purchase a condominium you also acquire an interest (or a share) in the common elements and have a right to use certain of those common elements.  Common elements in a condominium mean all of the property except the individual units, and therefore includes walkways, driveways, grassy areas, land under the unit and the roof, etc.  Each owner may make reasonable use of these common elements subject to any restrictions placed on them by the condominium statute itself and the rules pertaining to usage created by the condominium corporation.  Some owners may have exclusive use of those common elements that are specific to the use and enjoyment of their unit (i.e. balcony, patio, etc.)

 

What is a “condominium corporation”?

 


A condominium corporation is a company incorporated under the Condominium Act.  When a purchaser buys a condominium, the purchaser becomes a member of that condominium corporation.  The members of the corporation are all of the unit owners.  The unit owners control the corporation, and the corporation in turn manages all of the assets of the corporation which basically consist of the land and buildings.  A condominium corporation, as with any corporation, is managed by a Board of Directors which the unit owners elect.  All of this information is available in the condominium “declaration” and “by-laws”. 

 

What are the differences in the purchase process?

 

One of the first differences you will note is that the Agreement of Purchase and Sale form is unique to condominiums.   There are special clauses in this agreement which will be explained to you by your real estate agent.  You will have a fixed amount of time to review to review the corporate documents of the condominium corporation (“declaration, by-laws, common element rules”) before you are committed to buy the condominium unit.  The agreement will include the condominium fee and reference to any exclusive use areas that go along with your unit.

 

What about insurance?

 


The type of insurance you will need for your unit differs as well from insurance on a single family dwelling.  It will cover insurance for your unit as described in the declaration.  The condominium corporation will have a blanket policy on the assets of  the corporation.  The type of insurance that you will require for your unit is termed a “condominium owners” package.  Your insurance agent will be able to explain to you the detailed aspects of this coverage. 

 

What is an “Estoppel Certificate”?

 

Under the Condominium Agreement of Purchase and Sale form, the seller agrees to supply to you a document termed an “Estoppel Certificate”.  This is a document which clarifies for the purchaser the financial and legal status of the corporation.  The purpose of this certificate is to give you information which is not readily available by viewing your prospective unit.

 

Your real estate agent and lawyer will both have further information with regard to the basics of condominium ownership.