What Is A Condominium?

A “condominium” refers to a form of legal ownership, as opposed to a style of construction. Condominiums are most often thought of as high-rise residential buildings, but this form of ownership can also apply to townhouse complexes, individual houses and low-rise residential buildings. Condominiums are also known as strata in British Columbia or syndicates of co-ownership in Quebec.

Condominiums consist of two parts. The first part is a collection of private dwellings called “units.” Each unit is owned by and registered in the name of the purchaser of the unit. The second part consists of the common elements of the building that may include lobbies, hallways, elevators, recreational facilities, walkways, gardens, etc. Common elements may also include structural elements and mechanical and electrical services. The ownership of these common elements is shared amongst the individual unit owners, as is the cost for their operation, maintenance and ongoing replacement.

Each unit owner has an undivided interest in the common elements of the building.
This ownership interest is often referred to as a “unit factor.” The unit factor for any particular unit will generally be calculated in proportion to the value that the unit has in relation to the total value of all of the units in the condominium corporation. The unit factor will tell you what your ownership percentage is in the common elements and will be used in calculating the monthly fees that you must pay towards their upkeep and renewal. The creation of a condominium is regulated by provincial or territorial condominium legislation and municipal guidelines. It can be created in many different ways. In some provinces, a developer, or other interested parties, may register a declaration to create a condominium, while in others, an application may be made to have title issued for the units pursuant to an “approved plan of condominium.” The operation of condominiums is also governed by provincial or territorial legislation and the condominium corporation’s own declaration, bylaws and rules. Once a condominium corporation has been established, a board of directors, elected by, and generally made up of, the individual condominium owners, takes responsibility for the management of the corporation’s business affairs. There is usually a turnover meeting where this transfer of responsibility takes place. Each unit owner has voting rights at meetings. Your voting rights will generally be in proportion to yourunit factor.

What is a Condominium? (Second)

A condominium building is like an apartment building. However, instead of renting your individual apartment (unit), you own it. Others who live in the building also own their units. In addition, all of the owners in the building collectively own and share the common areas (hallways, laundry room, exercise room, etc.). So when you invest in a condo, you invest not only in the unit you’re purchasing, but indirectly in the units of others and in the common areas as well. You invest in the philosophy that collectively, all unit owners will help run your building and maintain a satisfactory or even exemplary standard of quality for the benefit of all owners.

This is done by electing a Board of Directors, who in turn hires a management company to oversee building maintenance, record keeping, and the collection of Condo fees. The Board also solicits support from the unit owners for the distribution and execution of things that need to be done to keep the building running well.

Remember that it is your responsibility to thoroughly investigate the pros and cons of your new purchase. If you need help interpreting documents, you may want to seek assistance from the Board of Directors of the condo you are considering or counsel from a real estate lawyer or someone with the professional expertise & qualifications to assist you.

Nonetheless, despite the few disadvantages of condominium living, condos continue to remain the most popular form of real estate ownership here in Toronto and the metropolitan area.

What types of Condominiums are there?

Residential condominiums can be high-rise or low-rise (under four storeys), town or row houses, duplexes (one unit over another), triplexes (stack of three units), single-detached houses, stacked townhouses or freehold plots.

There are even mixed-use condominiums that are partly residential and partly commercial buildings. They come in various sizes with diverse features and they can be found in almost every price range.

(Source:CMHC/GE)