What is a condo or condominium?
The word condo or condominium comes from the two Latin words – con, meaning together and dominium, meaning property. A condo or 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 condos:
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 or condo 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 condo 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 condo 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 or condo 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?
Condo 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 condo 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.