Overview of Purchasing a Condominium

A.???Existing Condominiums

The standard form of agreement of purchase and sale for a resale condominium is different from the one used in purchase of a resale residential property owned in fee simple. Both the OREA and the TREB (Toronto Real Estate Board) have a standard form of agreement to be used for the purchase of a resale condominium. In addition to the usual clauses in an agreement of purchase and sale, the seller agrees to give the buyer copies of the key condominium documentation, and the seller makes representation about the amount of common expenses and the financial status of the condominium corporation.

All condominiums are registered in the Land Titles system. A title search must be performed to verify the state of title to the unit being purchased. There is a separate parcel register or title index for each unit of the condominium, in addition to the dwelling unit, there may be parking and storage units. If the parking and storage units are separately deeded, there will be a separate parcel register for each. In addition to usual execution searches against the seller, there should also be a search of executions against the condominium corporation. If there is a judgment against the corporation, the unit owners may be liable for a portion of the judgement.

In addition to conducting the above searches, the buyer of a condominium unit must obtain a status certificate from the condominium corporation. A status certificate comes from the condominium corporation that includes, among other things, financial information, the names and addresses of all directors and officers, and the declaration. You may have requisitions that arise from your review of the status certificate and condominium documentation if the information provided differs from that in the agreement of purchase and sale.

B.????The purchase of a New Condominium from a Builder

Like the case of newly constructed homes, the agreement of purchase and sale for a new condominium is often signed before construction of the condominium has started. However, in the case of a new condominium, the agreement of purchase and sale is not binding on the buyer until the seller delivers a disclosure statement to the buyer. A disclosure statement is a document given to every buyer of a condominium unit that includes details pertaining to the physical, legal, and financial aspects of the condominium corporation.

The buyer is entitled to a ten-day cooling-off period from the later of the receipt of disclosure statement and the receipt of an executed copy of the agreement of purchase and sale, during which the buyer may cancel the agreement without reason.

Often a condominium is built and ready for occupancy before the description and declaration are registered. Title cannot be transferred to the buyer until these are registered. Most agreements of purchase and sale require the buyer to occupy the unit as soon as its ready, even if the buyer cannot get the title to the property at that time. The date of occupancy is called the interim occupancy date.