Purchasing a condominium is different from purchasing a freehold property in several important ways. When you buy a condo, you are buying your unit plus a share in the common elements of the building - the lobby, hallways, elevators, amenities, and parking structure. That shared ownership comes with shared financial obligations and governance by a condo corporation, which affects everything from your monthly costs to what you can and cannot do with your unit. Here is what to understand before you buy.
The status certificate
The status certificate is the single most important document in a condo purchase. It is a package prepared by the condo corporation that tells you the financial and legal state of the building. Your offer should include a condition giving your lawyer 10 days to review it (this is the standard under Ontario's Condominium Act).
Your lawyer will review the status certificate for several things:
- Reserve fund: The reserve fund is money set aside for major repairs and replacements - roof, elevators, parking structure, windows. A well-funded reserve fund is essential. An underfunded one means the corporation may need to levy a special assessment - a one-time charge to all unit owners - to cover capital repairs. Ask your lawyer for their read on reserve fund adequacy.
- Current and pending special assessments: A special assessment is an additional charge above regular maintenance fees. If one has been levied or is likely, it becomes your responsibility as the new owner or was the seller's, depending on timing. Your lawyer will identify any pending assessments.
- Outstanding litigation: If the condo corporation is involved in a lawsuit - against the builder, a contractor, or a unit owner - this is disclosed in the status certificate. Ongoing litigation creates financial uncertainty.
- Rules and by-laws: These govern what you can do in your unit and the building. Short-term rentals (Airbnb), pets, renovations, move-in/move-out scheduling, and parking rules are all typically addressed here. Read them before purchasing if any of these matter to you.
- The unit's common expense arrears: Confirm the seller is up to date on maintenance fee payments. Arrears can become your problem if not addressed before closing.
Maintenance fees
Monthly maintenance fees cover the building's operating costs and contributions to the reserve fund. They vary widely - from a few hundred dollars per month in a smaller building to over $1,000 in a large building with many amenities. Understand exactly what is included (water? heat? electricity? parking? locker?) and what is not. Your effective monthly housing cost is your mortgage payment plus maintenance fees plus any utilities not included.
Maintenance fees typically increase over time. Factor this into your long-term budget. A building with very low fees that is also visibly aging may be heading for a special assessment or a significant fee increase.
Building age and condition
Older buildings in the GTA can be excellent value - they are often in prime locations with larger units than newer builds. But they also tend to have higher maintenance fees and more frequent major repair requirements. Review the reserve fund study (included in the status certificate) to understand what capital projects are anticipated and whether they are adequately funded.
The condo corporation and property management
A well-run condo corporation with competent property management makes a significant difference to your ownership experience. If possible, attend a board meeting or review recent meeting minutes (also included in the status certificate package) to understand how the building is being managed, whether there are ongoing issues, and how the board communicates with owners.
New build condos: additional considerations
Purchasing a pre-construction condo involves a different process. You are buying off floor plans, with closing often years away. Pre-construction purchases in Ontario are governed by Tarion warranty provisions and have a 10-day cooling-off period during which you can rescind the agreement. Development charges and other costs are often adjustable at closing. This is a topic worth its own article - if you are considering a pre-construction purchase, speak with us before signing anything.
Whether you are buying a resale or pre-construction condo, our buyer team works through this process with clients regularly. Reach out to start a conversation.
