December 2009
What exactly is a condominium?
A condominium is quite frequently confused with a building type when actually it is a type of ownership. Parts of the property (the units) are owned by individuals, and other parts (the common areas) are owned by all the unit owners. All of the owners are members of the condominium corporation which is the entity created by the registration of the condominium plan. Ownership of a condominium means you own your specific unit, plus you have individual interest in the common property. You have ownership over all the space and improvements within the walls of your unit.
What are condo fees?
A condo fee is a sum collected from the unit owners to pay for the management of the common property and facilities outside the units such as elevators, heating and electrical systems, recreation rooms, landscaped areas, insurance and so on.
Each owner will pay a different amount of condo fee based on their "unit factor" which represents their share of the common property as found on the condominium plan. This unit factor can be based on the unit's square footage or the initial market price of the unit in comparison to the rest of the complex.
What happens if a unit owner does not pay his or her common expenses?
If a unit owner fails to pay his or her common expenses, the condominium corporation is entitled to place a lien on title to the unit in the amount of the arrears, together with all interest owing and all reasonable legal costs and reasonable expenses incurred by the corporation in connection with the collection or attempted collection of the unpaid amount.
Importantly, a lien for common expense arrears can be enforced in the same manner as a mortgage/charge of real property. This means that if a unit owner does not pay all amounts owing under the lien, the condominium corporation is entitled to sell the unit under power of sale.
Who manages condominium complexes?
The owners of the condominium either hire a management company, or the owners set up their own management group and manage the complex themselves.
What about property taxes?
A condominium is a piece of property, and condominium owners pay property taxes, they are calculated by using the unit factor.
What is a reserve fund?
It is a fund where money is set aside to use for repairs, maintenance, or improvements of the common areas. Usually the contributions made to this fund are taken from a unit owner's portion of their condo fees. Condominium corporations usually plan for their future expenditures accordingly for their reserve fund.
What about having pets in condominiums?
Some condominiums allow pets with the permission of the Condominium corporation. The Condominium Bylaws for the complex will specify if pets are allowed or if they meet certain criteria, eg., dogs under 25 lbs are permitted, or cats only.
Does a condominium owner need insurance, or is it covered in the condo fees?
The condominium corporation must carry a master insurance policy on the buildings and common areas. This policy provides liability coverage and for structural loss such as due to fire, winds, water damage and other coverage. The corporation's insurance excludes the contents of each separate unit and any improvements owners make to the units. Therefore, the owner of each unit should carry their own insurance to cover the contents of their unit.
Can you rent out your condominium?
A unit owner's right to rent out a unit is granted under the Condominium Act and neither the board nor the corporation can prevent this in their bylaws. There are requirements of a owner and rights of the corporation for rented units. An owner must inform the corporation of the Intent to rent the unit, Name of the tenant, and Address for service of the owner when the tenant vacates.
A corporation may require an owner to place a deposit against damage to the common property. Also the corporation may give one month’s notice to vacate the property if the tenant is contravening the bylaws.
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