May 21st, 2009

What is a condominium?

The word condo or condominium comes from the two Latin words – con, meaning together and dominium, meaning property. A condominium can be an apartment, house, townhouse or a unit in an apartment house in which the units are individually owned. Hence, in a condominium (condominium townhouse, condominium apartment, apartment loft, semi-detached/ detached condominium or hotel condo) there is always property owned in common with others – recreation areas, lawns, basement, garage –as well as the individual units which are owned outright.

Types of condominiums:

There are many types of condos e.g.; townhouse or row house, apartment loft or flat, semi-detached or detached structure, high-rise, low-rise, duplexes, triplexes or stacked townhouses (one unit over another) or even a hotel suite. Some condominiums are specially suited for a certain lifestyle, such as seniors. Each owner receives a deed for their unit, enabling them to mortgage and sell it independently of the owners of the others.

What do condo fees comprise of?

Condo fees are each owner's share of the common expenses of a condominium corporation. The Condominium Act defines common expenses as "the expenses related to the performance of the objects and duties of a corporation and all expenses specified as common expenses in this Act or in a declaration." In other words, all expenses properly incurred by the corporation are common expenses. Condo fees normally includes reserve funds contribution, building insurance, common elements maintenance and parking cost. For multi-residential condo apartments condo fees can also include heat, hydro, water, air conditioning, heating, use of amenities etc.

The condominium board prepares a budget for each fiscal year of the corporation. The budget sets out the amount of the estimated common expenses. Each owner's monthly contribution is determined by multiplying that amount by the owner's common expense percentage as set out in a schedule to the declaration and dividing by twelve.

Who governs a condo corporation in Ontario?

A condominium corporation is governed by the Condominium Act, a legal statute, and is run by a board of directors elected by the owners. When you buy a condominium unit, you take title to your unit and have all the privileges and burdens of ownership, including the payment of taxes. You will also be required to pay a monthly fee representing your proportionate share of the cost of servicing, maintaining and repairing those areas you share in common with others. The condominium board's function is to manage the corporation. Major decisions are voted on at owners' meetings. Condominium associations may set restrictions on such things as owning pets, or having an outdoor barbecue. Many condominium owners consider participation in community decision-making a benefit of condominium living. Condominium fees might seem steep at first glance, but it's likely you would spend even more performing indoor and outdoor maintenance on a house.

Why condos are preferred over other types of housing?

Condominium ownership is seen by some as a good intermediate housing choice — a kind of graduation from apartment living, but not as heavy a financial and time commitment as a house would be. Housing prices in last few years have risen more quickly than the income of young people. Despite of low mortgage interest rates, people still spend more of their income on mortgage payments or add both the incomes (for couples) to own their home. This impacts the housing affordability. Thus affordability is one of the top reasons that many buyers prefer condominiums.

On a downside, in a condominium, you won't enjoy the same freedoms and privacy you would enjoy in a single-family dwelling. You can modify or beautify the interior of your unit to your heart's content, but usually painting or planting outdoors by individuals is forbidden.

Assuming that your condominium owners' association is operating as it should, your property will be well maintained. That means that the value of your condo should remain high over time. And remember, if you buy a condominium, your weekends can be spent on the green — golfing, not mowing.

The Canadian demographics shows that approximately 1/3 of population is a baby boomer with 9.8 million individuals born born between 1946 and 1966. The Canadian baby boomer generation has driven the economy and shaped economic forces such as interest rates, the stock market, housing trends and corporate culture, to name a few. And the condo living is one of such trend.

Changing social trends also reinforce the condominium lifestyle as an ideal choice for one's home. There has been a rise in single parent families and common-law couples, and slower growth in traditional married couples with kids. As per Statistic Canada, between 2001 and 2006, one person households increased more than twice, as fast as the increase in the total population.

For the last 20 years, there has been a trend for young adults staying home with their parents longer, or return to the parent's home after living away for while. Thus more young men have developed a bachelor lifestyle that lasts well into their 30s. Once young people finally leave home, they are more likely to live alone.

Condominium living gives one an idea of good life without any worry of undertaking household chores like mowing lawn, planting shrubs, building a deck, yard maintenance etc. Modern condominium apartments offer luxury at an affordable price- indoor or outdoor pool, fitness, squash, billiard room, tennis courts, bowling, library, movie room, virtual golf, party room, guest suites etc.

Your Mississauga Condo broker

If you considering condo lifestyle and want to talk more about different condominium choices available in Mississauga, contact me. You can choose to buy a resale condo apartment or loft, book a pre-construction condo apartment or move into a condominium townhouse. Depending on your lifestyle, budget and neighbourhood choices, I can find you the right match. 

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Condo flippers not registering with TARION can face fine, jail, or both

April 7th, 2009

Tarion amends registration rules for new home "flip"

REALTORS® who deal in new home and condominium sales take heed: there are new provisions for registering vendors with Tarion Warranty Corporation.

When a person purchases a new home from a builder, but never occupies it and then resells it, they are required to be registered with Tarion. Under Ontario's New Home Warranty Act anyone who sells a new house in Ontario without registering it with Tarion is liable to a fine of up to $25,000, a sentence of up to one year in jail, or both. Previously, registration meant completing a detailed vendor/builder agreement, paying a $600 fee, undergoing a financial review and posting a $10,000 performance bond – even though the house was already covered by the builder registration.

However, Tarion, which administers the Act and provides new home warranty coverage to most new houses and condominiums in the province, has changed its registration requirements for purchasers who resell (or "flip") their homes without moving in.

The new approach to dealing with resellers of new homes means the usual detailed vendor/builder agreement is not used. Instead, Tarion has introduced a letter agreement that the new sellers must provide to the ultimate purchaser with a disclosure page that contains information such as: a statement that the sale is effectively a resale, disclosure of the original warranty start-date, the status of the remaining warranty coverage, and contact information to enable the purchaser to check on the status of any claims made in respect of the home. REALTORS® representing resellers in this situation can obtain the agreement form from Tarion and use it as a schedule to the listing and the Agreement of Purchase and Sale.

In its Application for Registration – Resellers (Resellers/Flippers) form, Tarion defines a resale or flip as: "A resale or ‘flip' involves a scenario where the purchaser of a new home ("Reseller") does not personally occupy the home but, instead, sells it to another purchaser. This can occur in a number of different ways, including, for example: (i) A condo investor who resells to a new purchaser on the same day that the original transaction (between the vendor/builder and condo investor) closes; or (ii) A purchaser who buys a home but for various reasons (e.g., divorce, change of job), never occupies the home and resells it later, perhaps after many months. Applications by reseller/flippers will be processed in a ‘fast track' manner. This is for the true reseller/flipper only, not for repeat offenders or illegal Vendors (charged by Enforcement). The reseller/flipper will have to complete the application form, Vendor Agreement and submit the $350 fee. If the home is already enrolled it does not need to be re-enrolled (it will remain under the original Vendor/Builder)."

Mitchell says registration can be processed "usually within two working days. The form is available through the Tarion call centre or can be picked up at the Tarion office in person.

Although the reseller (or "Vendor"), as defined under the Act, is responsible for obtaining the registration package when flipping a new home, REALTORS® representing resellers need to ensure clients are aware of these requirements to protect themselves from liability. One of Tarion's enforcement officers sent a letter to a salesperson involved in an unregistered new house flip under investigation. It highlighted the REALTOR®'s obligation under the Code of Ethics. It read:

"If the REALTOR® is acting for such a vendor then I would believe they would have a responsibility under their Code of Ethics if they were to advise such a vendor that it is ok to sell under these conditions or did not act when advised by us that the vendor of the unit they are selling is unregistered, they could possibly be opening themselves up to charges of Counselling or Aiding and Abetting."

But Tarion says they rarely need to enforce these regulations and that the small percentage of offences usually occur in rural areas. "The reseller registration requirements are there to protect the consumer who may not know they are essentially buying a resale home, " says Rob Mitchell, Director, Industry and Government Relations, Tarion Warranty Corporation. "Buyers need to know they have some recourse should any problems arise with the home within the warranty period."

Mitchell says REALTORS® should contact Tarion if they have any doubts about a new home's registration status or misunderstanding about what's covered under the warranty program. Tarion is also willing to conduct information sessions for real estate offices that deal in resales of new homes. For more information, visit or call 416-229-3844 or 1-877-696-6497

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Category: Investing, News & Events