Condominium ownership is not limited to residential property. Some commercial, recreational and mixed use properties and bare land developments are condominiums as well. Within the individual unit, the condominium owner is in much the same position as anyone who owns a single-family dwelling. An owner has exclusive use of the property and must pay all costs associated with its operation and maintenance. The owner is also responsible for a portion of the costs of maintenance of all the common elements in the corporation.

The primary purpose of the condominium corporation is to manage the condominium property and business affairs. The members of the corporation are the owners of the units. Some of the corporation's duties include:

1. managing and maintaining the common elements;

2. establishing a fund for the payment of common expenses;

3. ensuring that a reserve fund study is undertaken and that the appropriate fees are contributed to the established reserve fund to replace major capital items, such as the roof or elevators;

4. preparing the annual budget and assessing and collecting owners' contributions to these funds;

5. paying common expenses;

6. adequately insuring its liability to repair the units and common elements;

7. holding annual meetings of owners;

8. appointing an auditor (where there are 10 or more units) and filing an auditor's report and financial statements with Registrar;

9. ensuring that the owners comply with the Condominium Act, the declaration, and the by-laws;

10. keeping adequate records

The contents of the declaration and description of any two condominium corporations are not the same. Areas designated as common elements in one condominium corporation might belong to an individual unit in another. In some condominiums, the common elements begin at the exterior wall of the individual units; in others, the exterior wall of the individual unit is considered part of the unit. Such small distinctions can mean a lot when it comes to a question of payment for items such as window-washing service or repairs to the exterior brick of a condominium townhouse.

A residential unit usually consists of the premises in which the owner actually lives. These premises are the property of the owner, who is responsible for their upkeep and maintenance.

Operating a condominium corporation
When a majority (51 per cent or more) of the units have been sold, the declarant or developer stops managing the affairs of the property. The owners take over responsibility for the condominium corporation and run it according to the declaration and by-laws. The following must be provided to the corporation by the developer at that time:

1. the corporation seal and minute book containing copies of the declaration and by-laws;

2. copies of any agreements entered into by or for the corporation;

3. any warranties or guaranties for equipment, etc;

4. all survey, architectural, and structural plans for the project;

5. financial statements, the reserve fund study and the reserve fund account for the condominium; and

6. a list of all units sold, unsold, or rented in the property.

What is a reserve fund study?
A reserve fund study is an assessment of the components of a building's common elements and determines a funding plan to meet the costs of repair and maintenance of the components over time. Part K of the Regulations made under the Act deals with reserve fund studies, including:

-what a study must contain

-who is qualified to conduct it

-its components

-the time period to be covered

-definitions of terms used

-other information to be provided as part of the study

Condominium insurance
Insurance on the entire condominium development is the responsibility of the condominium corporation. The corporation should place "all risks" property insurance coverage on the units and the common property. It is standard practice that the corporation maintain errors and omissions insurance for the Board Members. Ask to see it. Consider checking the policy for exclusions. You may want to find out if the insurance covers the replacement cost of the units and the common property. Your portion of the cost of the insurance purchased by the condominium corporation is usually included in your monthly condominium fees. Check this with the condominium corporation. You will need to buy your own insurance for the contents of your individual unit and any improvements made to it. You should also have insurance to cover personal and occupiers' liability. Ask your insurance agent for more information.

Advantages and disadvantages of condominium ownership

Advantages
-It makes private ownership possible in areas where land values would ordinarily make this prohibitive, such as close to downtown.

-An individual unit owner is not generally responsible for day to day maintenance often associated with home ownership, since exterior maintenance of the units, painting, snow removal, and landscaping are the responsibility of the corporation and are paid for through the common element fees. Maintenance is usually carried out by a manager or under the direction of the Board.

-Owners can vacation and travel knowing that the exterior of their property will be maintained while they are away.

-It enables the owner to participate in decision making which affects the property.

-Community living can have its ups and downs, and your enjoyment of your property can be affected by your neighbours, the amount of noise or smells coming from their homes, their backyard activities, and even parking can become the source of disagreement.

1. Does the declaration prohibit any particular occupation or use of the units? Common examples are the prohibition of pets and of conducting a business from the unit.

2. Is the project registered as a condominium corporation? If not, when is registration anticipated?

3. How many of the units are sold; owner occupied; rented?

4. If the unit is presently occupied by a tenant, how much notice to quit is required by the Residential Tenancies Act?

5. Has a reserve fund study been conducted? Is the corporation's budget and financial status in keeping with the recommendations of the study?

6. What is the reserve fund balance?

7. Are any major renovations or repairs anticipated?

8. How much are the common element fees? What expenses do they cover?

9. Is the corporation self-managed or managed by a professional management company?

Before you sign any agreement of purchase and sale, take it to your lawyer to review its terms and the provisions of the documents to ensure that you are properly informed and your rights are protected.

What should the agreement contain?
If the agreement concerns a proposed unit or if the declarant (developer) is the vendor, it should include:

1. a copy of the survey plans showing the perimeters of the land and building(s),

2. the shape, boundaries, and location of the unit, and the common elements

3. a copy of the declaration, by-laws, and common element rules.

4. If the unit is incomplete, confirm the completion date.

5. If the unit is not yet registered, specify that your offer is based on the documents (draft declaration and description) forming part of your agreement of purchase and sale and is conditional upon the registration of the unit under the Condominium Act prior to the closing date.

6. If the unit is in a phased-registration development, you should receive information in addition to the above noted, including:

-a description of the overall plan of the development

-a statement that the declarant is not required to create any other phases

-a statement setting out the estimated registration dates of subsequent phases

-a statement that sets out, for each anticipated phase, the approximate location of the buildings / structures, the approximate number of units, the proportions of ownership, voting and contributions to common expense fees that exist for each unit after the phase is registered, and a schedule of when any common facilities will be available.

7. If you are interested in a resale unit, ensure that your offer is conditional upon you receiving an estoppel certificate (see the definitions).

You must rescind your offer in writing and it must be in the hands of the vendor within the five-day "cooling off" period.

What can I do in my unit?
You can do anything in your unit that you can do in a private home, subject to the rules and by-laws of the corporation. Usually the unit owner is forbidden from any actions that could threaten the project's insurance coverage or cause inconvenience to or interference with other unit owners.

Can I rent my unit?
Yes. You must notify the corporation of the rental and provide the tenant(s) with a copy of the corporations's declaration, by-laws and rules / regulations. The tenant is obligated to comply with the Condominium Act and the corporations's declaration, by-laws, rules and regulations and it is the unit owner's responsibility to ensure they do.

What If.....

1. my unit is damaged by fire or flood?
-It is the corporation's responsibility to insure and repair the unit. However, this does not include its contents nor any improvements.

2. the structure is damaged by fire or flood?
-It is the corporation's responsibility to insure, maintain, and repair the common elements which usually includes the structure except improvements to and contents of units.

3. the next-door unit is rented to tenants who are disruptive?
-First, address the problem with the corporation and the person who owns the unit, preferably in writing.

-If the corporation and the unit owner are not prepared to take action against the tenant, or they are unable to effect compliance, you will be able to proceed against the occupier of the unit through the arbitration process available under the Condominium Act.

4. I am unhappy with the way the condominium is being managed?
-If your concerns are about the building manager, go to the board of directors with your complaints and suggestions for improvement.

-If you are unhappy with the board of directors, ask to review their records and the (audited) financial statements. Board members should be cautious in their decisions and should seek out legal advice and other professional advice when making long-term decisions that may involve large amounts of money. Board members are elected for a term, so they can be removed by a majority vote of members at a meeting called for that purpose.

-Complain in writing and try to be reasonable. If you feel that the board is not taking any action on your complaints, you can make application to have the matter resolved by arbitration. The procedure for doing this is outlined in the Condominium Act. It should be noted that most corporations have liability insurance to cover the Board for any errors they may make.

5. my concerns are not addressed or I have issues with the Board of Directors?
-The Arbitration Process under the Act is available to address various types of issues that may arise in condominium living. Information about this process is available from the Registry of Condominiums.

1. move into my unit before construction is completed?
-You should consult your lawyer about this. Before you move in, make sure there is an occupancy permit for your unit and make a list for the developer of any items that need to be corrected and/or completed.

2. paint the interior of my unit?
-Yes, as long as the appearance of the building or exterior is not affected.

3. move interior walls in my unit?
-Only with the written permission of the corporation. There is usually a process in place for you to obtain the required permission.

4. plant a garden in my "exclusive use" lawn?
-Only with the written permission of the corporation.

5. inspect corporation records?
-Yes, on reasonable notice and at a reasonable time. There may be a reasonable fee charged for copying documents.

6. attend annual meetings?
Yes. The corporation must advise owners of meeting details.

7. get extra parking spaces?
-If there is room, but you will usually be charged an extra monthly fee.

8. refuse to pay my share of the common expenses?
-No. You are obliged to pay your common fees. If you don't, the corporation may obtain a lien against your property for the arrears. The lien ranks in priority to your mortgage and may affect your relationship with your mortgage company. Interest may be payable on overdue accounts and any costs to collect outstanding fees may be your responsibility. If you have a problem, advise the property manager or board of directors. If it is unresolved, bring it up at next meeting or request that the matter go to arbitration.

-The board of directors takes responsibility for managing the condominium property and its business affairs. Being available and having genuine interest and a business background are definite assets for directors.

-The Condominium Act specifies certain duties for the board including compliance with the Act, the declaration, the by-laws, and rules. In general, the duties and responsibilities of the board are carried out by a property manager, who is responsible for the day-to-day matters including the collection and disbursement of common element fees. In the absence of a property manager, the Board is directly responsible for these duties and responsibilities. For the protection of the condominium owners, the condominium corporation should have directors' liability insurance.

10. change a by-law?
-Yes, with the co-operation of other owners. A vote in favour of the change by those owning at least 60% of the common elements is required to approve or amend a by-law. It should be noted that the Amendment or new By-law is not in force until registered with the Registry of Condominiums.

Owner's Rights and Responsibilities

1. Exclusive possession of the unit.

2. The responsibility to maintain the unit.

3. The right to vote in matters concerning the condominium corporation.

4. The right of access to common areas, subject to the declaration, by-laws, rules and regulations.

5. The responsibility to pay common element fees.

6. The responsibility to participate in governing the condominium corporation.

Some Definitions
Some of the terms used to describe condominium ownership may be unfamiliar or have special meaning. Here are definitions of some of these terms.

Board of Directors
Each condominium corporation is managed by a board of directors who are unit owners and who are elected by the owners. There must be a least three directors, although a greater number may be required by the declaration, or in older corporations, the bylaws, which may also set out required qualifications, method of election, and term of office. In general, the board is responsible for the upkeep and maintenance of the building(s) and other business matters, usually by supervising the actions of a property manager.

By-laws
By-laws are rules that state how the condominium will be run, how the property will be maintained, and how the common elements will be used. By-laws are made, and can be changed, by owners who own 60% of the common elements.

Common Elements
Common elements include the property remaining after the boundaries of the units have been defined. They are owned in common with all other unit owners and are for their mutual use and enjoyment, e.g., hallways, elevators, mechanical equipment, lawn, swimming pool, etc.

Common Element Fees
Common element fees are the monies paid each month to the corporation by the unit owners. The corporation's budget indicates how much money is required to meet daily operating costs plus contributions to the required reserve fund. Unit assessments are made on the basis of the percentage allocated in the declaration, usually contained in a schedule attached to the declaration.

Common Element Rules
Common element rules are simply rules for the use of the common
elements, for example the number of guests you can have in the pool, at what time, and on what days.

Condominium Unit
A unit is the part of a condominium property that is to be individually owned and occupied. Its precise boundaries are set out in the declaration and description. Before you buy a condominium, the declaration and description should be read carefully by you and your legal advisor.

Description
The description details the layout and location of the whole development. It includes a survey of the land and building(s) and detailed architectural drawings of the construction of the building(s) and each unit.

Estoppel Certificate
An estoppel certificate is a binding statement prepared by the corporation at the request of a unit owner or purchaser. It indicates the standing of common element fees and reserve fund assessments against the unit - whether they are up to date, paid in advance, or in arrears. The Condominium Act and Regulations specify which items must be included. For example, the certificate will also contain such items as the names and addresses of the property manager and the officers of the corporation, the financial standing of the corporation, the reserve fund balance, whether any major capital expenditures or increases in fees are planned, and if there are any law suits pending against the corporation. A copy of the most recent declaration and by-laws are to be provided with this certificate.

Limited Common Elements
Also known as "exclusive use common elements", they are portions of the common property that are designated for the sole use of one or more unit owners, e.g., balconies, patios, parking (in some cases), storage lockers.

Property Manager
The property manager is an employee of the corporation who is responsible for the day-to-day management of the property which may include the collection and disbursement of common expense monies. The specific duties of the property manager should be contained in a written contract. Some condominium corporations may not have retained a property manager and are often self-managed by the Board of Directors.

Reserve Fund
The reserve fund is probably the single most important factor in the long-term financial stability of a condominium corporation. An adequate reserve fund protects the future of the condominium by ensuring that sufficient money is set aside for major repairs and replacements as they become necessary, for example, roofs, roads, landscaping, building exteriors, parking facilities, hallway carpets.

The Condominium Act requires every corporation of ten or more units to have a reserve fund study completed. This study assesses the components of the common elements and develops a financial plan for the repair and maintenance of the components based on projected life of the items and anticipated cost of repair / replacement and their current condition.

Special Assessment
A special assessment may be levied by a corporation in response to an unforeseen major expense that cannot be covered by the reserve fund when unit owners representing 66 2/3 of the common element vote in favour of the assessment.