ADJUSTMENTS: means those items such as realty taxes and common expenses, that will be credited or debited against the purchase price calculated as at the date of closing;

AGREEMENT OF PURCHASE AND SALE: means the contract that you sign to sell or purchase a property, also referred to as "Offer To Purchase" or "Agreement Of Sale";

CLOSING DATE: means the date that your transaction will be completed on, also referred to as the "Completion Date" or "Final Closing";

CHARGE: is another term used to describe a "mortgage" under the Land Titles system of property registration that applies to the majority of condominium projects;

CHATTELS: means those personal possessions of the Vendor which will be included in the sale, such as appliances, furniture etc...;

FIXTURES: means any item which forms part of the property including items that may have been added by the Vendor, such as central air or vacuums, shelving, chandeliers, vertical blinds etc...;

LISTING AGREEMENT: means the contract entered into between the Vendor and a Real Estate firm giving that firm the right to represent the Vendor in the sale of the property;

REQUISITION DATE: means the date by which the Purchaser's lawyer must complete all title searches, utility and municipal enquiries and advise the Vendor's lawyer of any problems that are discovered. Usually set for a date at least ten (10) days prior to the Closing Date;

TRANSFER: means a deed under the Land Titles system of registration:

UFFI: means urea formaldehyde foam type of insulation once thought to cause potentially serious health problems. Rarely used in Condominiums. Its presence may still reduce the value of a property.

ACT: means the Condominium Act of Ontario;

BY-LAWS: means the by-laws passed by condominium owners to govern how the affairs of the corporation are managed;

COMMON ELEMENTS: all the property, both real and personal, and assets of the condominium corporation. Each unit is assigned an interest in the common elements in the Declaration;

COMMON EXPENSES: the costs of running the condominium corporation. Each owner contributes their share calculated by dividing the yearly budget by the amount of common element interest assigned to their unit. Usually payable in monthly instalments. Also referred to as "Maintenance Fees".

CONDOMINIUM CORPORATION: means the legal entity that is created under the Act to control and manage the common elements. Each corporation is given a name when its registered, for example "Halton Condominium Corporation No. 500", this is the corporation's legal designation even though the complex may be referred to by some other name;

DECLARATION: means the document that is registered to give "life" to the condominium corporation. Contains the most important provisions relating to the corporation and the units:

DESCRIPTION: means the set of plans that are registered at the same time the Declaration is registered. They set out the boundaries of the common elements, the units and any exclusive use common elements;

ESTOPPEL CERTIFICATE: a document issued by the condominium corporation and containing financial and other important information relating to the unit being purchased and the corporation itself which is certified by the corporation to be true. Most often issued to purchasers. Cost $50.00;

EXCLUSIVE USE: is a term used to describe a portion of the common elements that is allocated to a specific unit for the use of the owners of that unit alone, but which is still subject to the authority of the condominium corporation, for example, patios, balconies, parking spaces, storage lockers, and in some cases, ensuite heating\air conditioning systems.

FREEHOLD CONDOMINIUM: a marketing term used to describe a type of condominium where the boundaries of the units may be expanded to include windows, doors, roofs, exterior cladding, driveways, yards and other major components of the building and grounds that would normally from part of the "common elements". Buyers of these condominiums are generally obligated to maintain and repair all of these items at their own expense but may be required to get consent from the Board of Directors to make any alterations to the exterior of the building. All other obligations imposed by the condominium Act apply to these condominiums

RESERVE FUND: means a common fund that every condominium corporation must set aside to anticipate major repair\replacement costs for capital items, such as roofs, parking structures, mechanical, etc.... The reserve is funded through the common expenses contributions from each unit. Vendors do NOT receive a credit from a Purchaser for contributions made to the reserve fund.

RESERVE FUND STUDY: a formal report normally prepared by an engineering firm, to determine what will be needed in the Reserve Fund in the long term to anticipate expenditures on capital items. Very important for all condominiums to have this type of study done;

RULES: means the day to day rules of the condominium corporation that all owners and occupants must abide by, for example, no barbecuing on balconies, care and control of pets, parking regulations, etc...;

SPECIAL ASSESSMENT: means a payment of common expenses that was not included in the budget for the fiscal year within which the special assessment comes due. Calculated by dividing the total amount of the expenditure by the common element percentages allocated to each unit in the declaration;

UNIT: normally means a residential dwelling the boundaries of which are described verbally in the Declaration and illustrated in the Description. Can also be used to describe a type of parking or storage area. Boundaries normally end with the drywall found inside the dwelling, the surface of the concrete slabs and the interior surfaces of windows and doors.

CONFIRMED POSSESSION DATE: means the date the unit is ready for occupation and at which the Purchaser is required to take possession. This occurs before the condominium is registered. The Purchaser does not "own" the unit at this time but occupies it more or less as a tenant. Also referred to as the "Interim Closing Date";

DECLARANT: means the developer and\or vendor of the new condominium project;

DISCLOSURE STATEMENT: a package of information required under the Act to be given to new condominium buyers by the Declarant. It contains a description of the project, including recreational and other amenities, and a brief summary of the more important parts of the declaration, bylaws, rules and other contracts or leases that will affect the finished condominium. It must also contain a statement as to whether the Declarant intends to market any of the units to investors and the number of units that may be sold to investors;

FINAL CLOSING: means the date on which the transaction is completed and the Purchaser obtains a Transfer of the unit;

FINAL INSPECTION: an inspection of the unit made by an inspector from the local building department the purpose of which is to confirm that the unit meets the minimum Building Code requirements for human habitation. It does not necessarily mean that the unit is completely finished. Usually scheduled by Declarant to be done just prior to, or on, the Confirmed Possession Date;

INTERIM OCCUPANCY: means that period of time commencing on the Confirmed Possession Date to the date of Final Closing and during which the Purchaser has possession of the unit;

INTERIM OCCUPANCY FEE: means the monthly fee payable to the Declarant (for realty taxes, maintenance, and interest on the Vendor Take-Back Mortgage) during the period of Interim Occupancy, (adjusted to Final Closing Date);

ONTARIO NEW HOME WARRANTY PLAN, (ONHWP): is an Ontario organization that provides various warranties on the construction of new residential dwellings, including condominium units. Also referred to as the "Warranty Plan", the "Plan Act" or by its old designation of "HUDAC";

VENDOR TAKE-BACK MORTGAGE: means, in the context of new condominium purchases, the mortgage (charge) that the Purchaser is required to take from the Declarant in the Agreement For Purchase and Sale. Sometimes referred to as the "Phantom" mortgage since it often becomes due on or shortly after the Final Closing Date;

WARRANTY INSPECTION: another inspection that takes place prior to the Confirmed Occupancy Date. This inspection is done by the Purchaser together with a representative of the Declarant. All deficiencies with the unit are listed on an ONHWP form and submitted to the Warranty Plan by the Declarant.

Buying a condominium is somewhat like buying stock in a new company; you shouldn’t invest your lifesavings in either unless you are satisfied that it is a sound investment and that means asking questions.

The following notes discuss some of the issues that a wise condominium buyer should consider but remember that while every condominium corporation will share some common traits, they can also vary widely in the type of amenities they provide, their monthly maintenance charges, their rules and their physical and financial administration. The answer you receive to a question about one condominium may not be the same one you get for another. That is why you need to ask questions in order to understand what you are buying.

Start by talking to a realtor who is experienced in condominiums and a real estate lawyer who is also familiar with condominiums. While you can and should question the vendor, you should verify their answers, especially in respect of matters that are important to you, (eg. whether the building allows pets) by speaking to the condominium property manager or Board of Directors.

Moving into a condominium involves trading some of the privileges you might enjoy with your existing home, such as choosing the colour of paint for your front door, for the benefits of condominium living, (somebody else has to paint the door!). While some people may be concerned about the restrictions that sometimes apply to the condominium lifestyle there are many advantages, including:

ELEVATORS: Some high-rise condominium developments have specific rules about moving your belongings in. You should contact the manager or superintendent for the building directly to make your moving arrangements.

UTILITIES: In some condominiums utility charges and cable t-v are included in the common expense, you should ask the Vendor or the manager of the building what might be included. This is more common in high-rise developments.

KEYS: Some condominium corporations require that Vendors turn in their security keys, garage door openers, pass cards, etc., to management at the time they move out. Therefore, you may have to make arrangements with management to obtain your security keys from them before moving in. Most high-rise and some other condominium corporations require that you must provide the corporation with a key to your unit or ensure that the master key for the condominium fits your lock.

PARKING: Almost all condominiums have restrictions on the availability of parking. If you have two cars but only one parking space designated for your use don’t count on being able to park your second car in a visitor’s parking space or another owners. If you do your car can be towed. Some restrictions also apply to parking commercial vehicles, recreational vehicles, trailers and boats. If this is a concern ask management or someone on the board.

PETS: Some condominiums prohibit pets of any kind. Others may prohibit the number, type or size of pets. All condominiums have rules governing the keeping of pets which if broken can lead to an order for the permanent removal of the pet from the complex. If you have a pet make sure you understand what the rules are.

MAINTENANCE AND REPAIR: In most condominiums the corporation is fully responsible for the maintenance and repair of the common elements. In some, however, these duties may be shifted back to the homeowner to some extent. As an example in some high-rise buildings the heating and air conditioning systems form part of the common elements but the unit owners are required to conduct routine maintenance on the system, (although, normally, the corporation would be responsible for replacing them when they wear out. In townhouse or bungalow condominiums owners are often made responsible for shovelling the show from their own driveways as well as front and rear porches while in others this is a service paid for through the common expenses. If you are concerned about this type of thing you need to talk to the vendor and the property manager to confirm who is responsible for what.

When you purchase a condominium unit, you automatically become subject to the provisions of the Condominium Act of Ontario, which governs all condominiums in Ontario. The current act includes provisions that, among other things provides for penalties for non-payment of common expenses or violations of the Corporation Rules and Regulations. These are to ensure that the condominium has sufficient funds to operate and that everyone pays their fair share of those cost and obeys the rules.

The Act also sets out the procedures for making changes to common elements, to give the condominium community some control over the general appearance of the complex. It also sets out the procedures that the Corporation must follow to enact new By-Laws or Rules to guarantee that the owners have some control over their environment. A new condominium act is expected to be proclaimed into force in 1999. It will bring many beneficial changes to the condominium industry and will provide greater consumer protection for home buyers.

The Declaration is the document that creates the condominium corporation in a similar manner as Articles of Incorporation gives life to a private company. It will contain certain mandatory provisions as legislated by the Condominium Act. It will contain a specification of the boundaries of your unit, your proportionate interest in the common elements and the percentage used to calculate the monthly common expenses for your unit.

The Declaration will also stipulate, if any, those areas of the common elements of which you have the exclusive use such as parking spaces, balconies or rear yards. Exclusive use areas are administered by the condominium but you, as opposed to other unit owners, have the sole right to use them.

The Declaration may also contain provisions regulating the use and occupation of the units, and common element areas, including the normal requirement that you may not operate a business out of your unit. It may also specify those areas for which the condominium is responsible for maintenance, repair and insure and the areas for which the unit owners are responsible.

In some cases, the Declaration may impose other limits on the use of your unit such as that no pets are allowed. If you are a pet owner you must determine whether pets are allowed in the condominium before you commit yourself to buying.

By-Law's are enacted by the unit owners of the Condominium Corporation and set out the basic organizational and administrative functions of the Corporation, including the duties of it's Board of Directors and officers. The by-laws also make provision for calling owners' meetings and for the election and qualification of the Board of Directors.

The method for collecting common expenses and how non-payment is dealt with is also set out in these By-laws. It also confirms your right to vote (one vote per unit only) and that your vote will be removed if you are in arrears of common expenses for longer than 30 days.

All condominium corporations have rules which form the standards of behaviour for the community. These govern the day-to-day use of your unit and the common elements. Without being specific, most Corporation's Rules contain provisions prohibiting the causing of any nuisance, excessive noise or any other disturbance which may interfere with the use and enjoyment of the units by other unit owners. You have the right to insist that the Rules be complied with by all other unit owners, tenants or other residents of the condominium complex.

The Condominium Act (and the Declaration) specifies that no changes may be made to the common element areas, including exclusive use common element areas, without the consent of the Board of Directors and without first complying with the provisions in the act respecting alterations or improvements. This means that you will be required to obtain consent from the corporation and the other owners, where applicable, before you can make any alterations or improvements to the exterior of your unit. This also applies to internal load bearing walls, and other items such as windows, exterior doors, common plumbing and electrical systems floor and ceiling slabs. The corporation has the ability to force you to remove unauthorised improvements.

Some developments are advertised as "freehold" or "lot line" condominiums. This wording means that you may own the entire unit structure including the exterior components like the roof but you will likely still be subject to the condominium’s approval for exterior alterations or improvements;

As a prospective buyer you should watch for any changes that have been made to the common element areas of the unit you are considering buying such as a wooden deck or an enclosed balcony, you should verify whether these changes have been properly approved.

Upon purchasing your unit, you will become responsible for making common expense payments to the condominium corporation. These payments provide the condominium with the cash necessary to maintain the common elements, fund the reserve accounts, pay for property management and generally operate the Corporation. Some condominiums require that you provide them with post-dated cheques or enter into a pre-authorised payment plan for common expense payments.

The amount of common expenses can vary greatly depending the size and type of condominium that you are looking at and the amenities, if any, that it contains. Generally speaking the old adage, "you get what you pay for" is very applicable to condominium common expenses. Condominiums that brag about how their condo fees have not increased for the last five years are either exceptionally well run or, more likely, are not facing reality. Should you buy into one of later condominiums don’t be surprised to see a substantial increase in common expenses or special assessments.

Common expense payments may increase from year to year to keep pace with increased costs incurred by the Corporation for its operation. If you fail to make your payments when due, your unit can be liened and sold by the Corporation to enforce collection. This guarantees that everyone pays their fair share of the costs to run the condominium.

The Reserve Fund is a trust fund established by condominium corporations to anticipate extraordinary costs for major repairs to the capital components of the condominium’s common elements. At least ten percent of your common expense payments must be deposited directly into the Corporation's reserve fund. Most condominiums contribute much more to the reserve than the minium 10%and it is not unusual to see a 25% - 35% contribution. Your lawyer cannot advise you as to the adequacy of a reserve fund as there are too many variables which may affect it's size but generally speaking, the bigger the Reserve Fund the better. Any contributions made by you to the Reserve Fund become the property of the Condominium Corporation. You do not receive a rebate of Reserve Fund contributions in the event that you sell your unit.

Today it almost an industry standard for condominiums to obtain an independent Reserve Fund Study from a qualified engineering firm. These studies analyse the state of repair of the different components that make up the common elements, their remaining lifespan and project, in today’s dollars, what the corporation will need to repair or replace each of the components over the next 25 - 30 years. These are extremely valuable tools for condominiums and they really cannot determine what an appropriate contribution to the reserve fund would be without one. Unfortunately , there are still may condominiums that have not obtained one of these studies. A wise buyer will want to know if a study has been obtained and whether the corporation has implemented its recommendations.

Under the new act all condominium corporations will be required to get a reserve fund study, develop a plan to incorporate its recommendations into the budget and disclose all of this information to prospective purchasers.

Special Assessments are not common. They are made when the Corporation is faced with a large and unexpected expenditure of funds, for example, an emergency repair to common element areas. The unit owners are obligated to pay their proportionate share of the special assessment as determined by the percentage allocated to the unit in the Declaration.

The majority of condominiums in Ontario while governed by an elected Board of Directors, are managed by a professional property management company. The Manager's role, among other things, is to oversee the day to day operation of the Corporation, see to the collection of common expenses, advise the Board of Directors, assist in the preparation of budgets, and attempt to enforce the Rules. The Property Manager can be a valuable source of information about the condominium and you shouldn’t hesitate to call him or her if you have questions concerning the unit or the condominium.

If you don’t speak beforehand you should contact the manager as soon as you purchase the unit. Questions relating to the Condominium Corporation should be directed, in writing, to your Property Manager.

There are also a number of Condominium Corporations which are self-managed. Essentially, this means that the Board of Directors themselves with, sometimes, the assistance of volunteers from within the community assume the same tasks that a professional Property Manager would. It should not make any difference to you as a Purchaser whether the Condominium Corporation is professionally managed or self-managed, so long as those responsible are fulfilling their duties.

The Condominium Corporation is responsible for insuring the common element areas and the unit. This insurance coverage includes public liability for those areas. However, you are responsible for obtaining your own insurance for your contents and any improvements that have been made to the unit since it was first constructed, (for example, new carpeting, wall paper or new fixtures). In addition, you are responsible for obtaining public liability insurance for your unit.

You may also want to enquire with your insurance agent as to whether you can obtain a rider to your policy which would provide that your insurance would pay any deductible under the Condominium Corporation's insurance in the event that you were held responsible for such a deductible. You may be held responsible in the event that you were the cause of the damage to which the condominium corporation's insurance company responded. You must obtain a proper condominium unit insurance package and NOT a "tenants package". Consider getting your unit insurance from the same company that insures the condominium, this goes a long way to eliminating disagreements over which policy covers the damage.

The same rules for insurance apply to freehold condominiums. As an owner you still need to get condominium insurance and not an ordinary homeowners policy.

You can find out almost all of the information noted above by purchasing an estoppel certificate from the condominium corporation,, (under the new legislation they will be called "status" certificates). They cost $50.00 plus GST and are worth every penny. You should buy one before you firm up your offer. The simplest way to do this is to have your agent make the offer conditional for 5 -10 days on you being satisfied with the certificate and its attachments.

The certificates contain among other things:

In the notes to follow, we will be discussing a number of matters that are common to most condominium purchase transactions, as well as other residential real estate transactions. However each such transaction is unique and accordingly there may be other matters that will arise during the course of the transaction which we may not have dealt with.

The people you are buying from are not required to provide vacant possession until the transaction has actually been completed and they have finished moving out. While your lawyer will do his or her best to complete the transaction as early in the day as possible, it may be delayed until late in the afternoon. Delays in closing may be caused by the inability of the Vendor's solicitor to meet with your lawyer or other circumstances beyond their control. Please ensure that your moving arrangements take this possibility into account.

Some high-rise condominium developments have specific rules about moving your belongings in. Some require you to reserve the service elevator and pay a deposit for possible damage. There are a few which do not allow moving arrangements to be made on Sundays. You should contact the manager or superintendent for the building directly to make your moving arrangements. These arrangements are not normally required in other types of condominiums.

The Vendors are responsible for paying utilities up to the date of closing. It will be necessary for you, however, to contact the utility companies to ensure the continuation of services to the property and provide them with your names for billing purposes. This should be done several weeks prior to closing to ensure that there are no last minute problems. In condominiums where utility charges are included in the common expense, you should ask the Vendor or the manager of the building what might be included. This is more common in high-rise developments.

If you arrange for your telephone service to be installed on the day of closing, you may be able to make outgoing calls but there may be a period of several hours where incoming calls may not go through. Accordingly, you should make arrangements to keep in contact with your lawyer during the day of closing on a periodic basis until your transaction has been completed.

For various reasons your purchase may not be completed until later in the afternoon of the day of closing. The Vendors are not obligated to turn over their keys until such time as the transaction is completed. You should keep this in mind when making your moving arrangements. Plan to attend at your lawyer’s office to pick up your keys once they are available.

Some condominium corporations require that Vendors turn in their security keys, garage door openers, pass cards, etc., to management at the time they move out. Therefore, you may have to make arrangements with management to obtain your security keys from them before moving in. Most high-rise and some other condominium corporations require that you must provide the corporation with a key to your unit or ensure that the master key for the condominium fits your lock.

If you enter into the premises before you are certain that the transaction has been completed, you assume a risk that should the transaction not be completed for some reason, you will be required to vacate the premises. In no circumstance should you make any changes to the premises until you are certain that the transaction has been completed.

Serious consideration should be given to pre-qualifying for your mortgage at your bank or financial institution. In this way, you are able to go in "firm" on an Offer, and perhaps obtain that special edge over other purchasers who must make their offers conditional on financing.

If you anticipate that you will be obtaining mortgage financing for your purchase, you should advise your Mortgagee of the name of the lawyer who will be representing you so it can forward instructions to your lawyer for the completion of the mortgage documentation. It is also important in today's interest rate market place to speak with the Mortgagee the just before closing to see if your interest rate may have dropped.

It is a standard requirement of most Mortgagees, that the solicitor involved in the purchase transaction also represents the Mortgagee. This means that your lawyer will be representing both the Mortgagee and yourselves in the purchase transaction. He or she must give a title opinion to both the Mortgagee for its mortgage and to you for your purchase. Accordingly, if your lawyer becomes aware of any defects or other problems relating to the title, they are obliged to advise the Mortgagee even if it is not a matter of concern to you.

In the event that a conflict arises between yourselves and the Mortgagee, your lawyer is required by the Law Society to advise you that he or she must withdraw from representing both you and the Mortgagee and thereafter each of you must obtain your own lawyers.

Under the laws of the Province of Ontario, you are required to pay tax on the purchase of real property. The tax is based on a percentage of your purchase price. There is a schedule attached illustrating the amount of Land Transfer Tax payable for certain transactions. You must pay this at the time your transaction is completed accordingly, you should be budgeting to have it available at the time of closing. Some first time buyers of new condominiums can obtain an instant rebate of the Land Transfer Tax if they qualify for it. You should speak to your lawyer about this.

Any OHOSP monies which you intend to contribute to the purchase of the property must be obtained by you from your bank prior to the closing. You should make arrangements to have the funds available for us at closing.

As in all real estate transactions, there will be certain minor adjustments to the final sale price to take into consideration such things as, deposits, payment of realty taxes, mortgages assumed or given back on closing and condominium common expenses. These are calculated by the Vendor’s lawyer on a "Statement of Adjustments" which is provided to your lawyer for verification usually a week or so before the closing date.

Your lawyer will take these figures apply your mortgage financing, (if applicable) and advise you of exactly how much you will need to bring in to complete the transaction, (if any). . These monies are required to be provided to your lawyer by certified cheque or bank draft. This figure will also include your Land Transfer Tax and usually your lawyer’s legal fees, your disbursements and applicable GST.

Just as a lawyer inspects the title to the property you are buying, a House Inspector can be hired to conduct an inspection of the property you are buying in order to determine its physical state of repair. This should obviously be arranged for as a "condition" of your offer to purchase so that if the inspection reveals some major problems that the Vendor is either unwilling or unable to remedy before closing you can get out of the deal. These inspections become more important when buying older townhouse, bungalow or similar style condominiums.

Union Gas also offers an inspection service of all gas fuelled appliances within a home for a small fee.

The Fire Code and local By-Laws often require that at least one smoke alarm, and sometimes more, be installed in all residential homes including condominium units. Self-closing door mechanisms are also required for exterior doors that open into a common hallway or lobby. Therefore, if these are not already installed within the unit you are purchasing, you will likely be required to install them.

Your new property may be subject to a number of normal easements for the provision and future maintenance of underground utility, sewer, or water facilities. Your property may also be subject to building restrictions as set out in subdivision agreements and/or other documentation. Upon completing a search of title your lawyer should discuss any unusual matters that affect your title with you in more detail.

It is possible to take title to a new property in various ways. If two or more people are buying the property, for example, a husband and wife, either one could take title individually or together either as joint tenants or as tenants in common.

If you take title as tenants in common, the law indicates that each of you will receive a one-half interest in the property, (or such other interest as you may determine, e.g. 60/40). In the event of your death, your interest would devolve to your estate and be dealt with pursuant to the terms of your Will. While it is always important to have a Will and Power of Attorney for Property it becomes essential if you have an interest in a property as a tenant-in-common.

If you take title with one or more others as joint tenants, then each of you assume an equal interest in the property. In the event that one of you dies, the survivor(s) will take the entire property. The interest of the deceased in the property is not governed by his or her Will.

In the event that one of you is providing all or a substantial portion of the funds necessary to purchase this property, you may wish to consider entering into a form of marriage or other type of contract in order to define your respective interests in the event that a separation or dispute occurs at a later date.

Your lawyer will need to know how you wish to take title as soon as possible so that the Vendor’s lawyer can be advised as he or she will be preparing the transfer, (deed). You also need to provide your respective dates of birth, and full legal names for the deed of your new property.

Under the Family Law Act of Ontario, regardless of how one takes title, no one may dispose of or encumber a "matrimonial home" without the consent of both spouses. Any contract, agreement, or transfer of title entered into in regards to the matrimonial home without the consent of both spouses is deemed to be null and void under the terms of the Family Law Act.

You should attempt to arrange a final inspection of the property prior to closing. During this inspection, you should determine a number of things such as: are all the fixtures still in place; are the heating, air-conditioning and other mechanical systems functioning properly; and has the property or unit undergone any damage since you executed the Offer.

Several court decisions have determined that a purchaser may have a limited right to inspect, at least once, before the closing date even if your purchase agreement is silent on that issue. However you must still give the Vendor reasonable notice of your intention to inspect and arrange for a mutually convenient time to attend with them. Preferably this should be written into your Agreement to Purchase. You will not likely be allowed to inspect on the day of closing itself. Your real estate agent can be of assistance to you in arranging an inspection appointment.

On the date of closing, you should determine whether all appliances and fixtures within the unit that are being left behind are working. If you find that the appliances or other equipment are not working, or that there are fixtures missing from the premises that were supposed to have been left behind, you should contact your lawyer immediately. He or she will then attempt to make some arrangement to have the items returned, repaired, or some compensation given to offset the loss. This becomes more difficult as each day passes after the time of closing.

Many of the comments discussed in the previous purchase section also apply to purchasing a new condominium from a developer. However there are significant differences. If you are contemplating purchasing a new condominium from a developer, please discuss it with your lawyer before hand.

For all new residential condominiums you have a ten, (10) day recission or "cooling off" period that starts from the time you receive a Disclosure Statement. You should have your lawyer review the Offer to Purchase and the Disclosure Statement within the ten day cooling of period. Some matters your lawyer may want to discuss with you include:

The purchase of a new condominium is very different from the purchase of a re-sale condominium or ordinary home. Contracts entered into for the purchase of a new condominium can be extremely complicated. By law you are allowed 10 days from the date you receive a "disclosure statement" from the developer within which you have the right to review its contents and, if you change your mind, rescind it and get your deposits back. Normally you are given the disclosure statement at the time your Agreement for Purchase and Sale is accepted. It is extremely important that you and Vendor agree on when the disclosure statement is given so that you can calculate the recission period. Some Agreements For Sale contain a clause indicating that you acknowledge that you have received the disclosure statement as of the date of the agreement. Be sure you did receive it.

Please ensure that you give a copy of the offer to purchase and disclosure statement to your lawyer within the 10 day rescission period, (the earlier the better) so that he or she may review it with you.

As indicated above, significant deposits may be required to be paid prior to final closing, and the Ontario New Home Warranty Program only protects deposits up to $20,000.00. Any deposits over that amount should be protected by arranging for them to be held in trust or by confirming that deposit insurance or other security has been obtained by the Declarant. You are entitled to receive interest on your deposits commencing as of the Confirmed Possession Date, (under the New Condominium Act you will get interest from the date you give your deposits to the date Confirmed Occupancy date).

Very often a condominium complex may have been physically completed and is ready for occupancy before the Condominium Corporation itself is created. A Condominium Corporation is created by registration of the Declaration and Description. There are many conditions and procedures that the Developer of the condominium complex must complete before being allowed to register the Condominium Corporation. Accordingly, the Condominium Act allows the Developer, (also referred to as the "Declarant") to require that you as a purchaser occupy your unit before the Corporation is registered. This is known as "Interim Occupancy".

During interim occupancy, you are not actually an "owner" of the unit. The relationship is comparable to being a tenant although the protection afforded under the Tenant Protection Act does not apply to this relationship. You will find in your Agreement of Purchase and Sale that there are obligations that you must fulfil during your occupancy including abiding by all Rules, not selling or leasing your unit without the consent of the Developer and paying a monthly occupancy fee.

The occupancy fee can vary from one development to another. It is based upon a formula set out in the Condominium Act. It is equivalent to the sum total of three amounts; the amount you would normally pay for your common expense fees; an amount equivalent to your unit's proportionate share of the realty taxes for the complex; and an amount equivalent to the interest that is payable under any mortgage that the Vendor requires you to take back under your Agreement of Purchase and Sale. The last figure is by far the largest of the three.

The Vendor-Take-Back mortgage set out in your Agreement is sometimes referred to as the "Phantom Mortgage". Virtually all Condominium Agreements of Purchase and Sale provide that such a mortgage is to be assumed by the Purchaser at interim occupancy. However, since there is no separate title created at that time for the unit, no actual mortgage is registered on title. In addition these mortgages are traditionally required to be paid out at the time you receive the Transfer/Deed for your unit or shortly thereafter, (although more recently, longer term mortgages are being made available). Hence the reference to "Phantom Mortgage" as they disappear when they are no longer required.

If you fail to pay your occupancy fees during the occupancy period, or breach any of the other obligations imposed upon you under the Agreement of Purchase and Sale, the Vendor at its option can terminate your contract, keep your deposits and require you to vacate the premises.

Under the New Condominium Act the requirement to get a Phantom mortgage is done away with but the formula for calculating the interim occupancy fee is basically the same.

Prior to taking interim occupancy of your unit, you will be required to attend with a representative of the Developer to complete an inspection of the unit. The purpose of the inspection is to have you list any obvious deficiencies that you can see during your inspection. The list is then submitted to the Ontario New Home Warranty Program. These Warranties are discussed more fully below. You should not take interim occupancy until such an inspection has been done. Very often it occurs just a day or two before you are required to take occupancy. In addition, the final occupancy inspection should also completed by the local Municipality prior to your moving into the unit.

Once the Condominium Corporation has been registered the Developer will be in a position to transfer the title of the individual units. At this time you will be required to produce the balance of the purchase price. If you are obtaining financing for this purchase, you must have it in place by that time, (see previous notes on Mortgage Financing). The Developer will produce a Statement of Adjustments which, in addition to the items already noted in previous sections, will contain adjustments for such things as the monthly occupancy fee for the month within which you close; a credit for interest on any deposits you have made (commencing from the date of occupancy); realty taxes; monthly common expense fees; payment for extra items not previously paid for; GST; and the value of any mortgage that you may be assuming at the time of final closing. These Statements of Adjustments are not usually available until five to ten days prior to the closing. The Developer may send the final closing documents to you directly at your home address. If you do receive them contact your lawyer immediately and provide him or her with the documents.

Like all new homes in Ontario, new condominiums are protected under the Ontario New Home Warranty Program. This Program provides a number of Warranties to new home buyers.

The Program protects deposits up to a maximum value of $20,000.00. In addition, it provides a general warranty on workmanship and construction which commences on the date you take interim occupancy. For new homes registered after December 31, 1990, the following additional warranties apply:

You will be required to provide vacant possession of your premises as of the date of closing. Accordingly, you should be making your moving arrangements with this in mind.

You will need to provide a set of keys to your lawyer for the premises prior to closing so that they may be turned over to the Purchaser's solicitor on closing. The remaining keys may be left inside the house.

You may be requested by the Purchasers to provide them with a set of keys before closing. Most lawyers do not approve of turning over keys before closing as the Purchaser may move into the property before the transaction has actually been completed. If for some reason, the transaction is not completed due to their fault, you may be in a position of having to evict the Purchasers. At the same time, you will likely not be able to complete your own purchase transaction, (if applicable) as the monies will not be available from your sale transaction.

You should check with the superintendent or manager of your Corporation to find out if you have to turn in your security keys, access cards, garage door openers, etc. Otherwise, they should be provided to us prior to closing so that we may turn them over to the Purchaser to allow them access to the building and the underground parking if applicable.

It will be your responsibility to ensure that all of your utility accounts and common expenses are paid up to date prior to closing. In addition, it will be your responsibility to contact the various utility authorities (if not included in your common expenses) and arrange to have the meters read as of the closing date. Please instruct the utility authorities to forward the final bill to you at your new address.

You must maintain your contents and liability insurance coverage on your unit until the time at which it is transferred. In this way, if there is some delay in the closing, or if the closing does not take place, you will know that there is insurance coverage at all times. It will be up to you to make these arrangements.

If for any reason your unit will remain vacant for any period of time for example, due to a delay in closing, you MUST call your insurance agent and advise them of this. You may also have obtain a "Vacancy Permit" rider if the unit will be vacant for an extended period of time, otherwise your insurance may NOT cover the unit while it is vacant.

You are responsible for paying your realty tax installments as they fall due up to the date of closing. The balance of the sale proceeds due on closing will be adjusted to reflect any overpayment or shortfall for your share of the taxes.

Your Agreement of Purchase and Sale requires that you leave all fixtures in the property save and except for those that you have specified that you will take in the Offer to Purchase. In addition, all appliances that you will be leaving must be paid for in full. Rental hot water tanks are an exception to this rule.

In your Agreement of Purchase and Sale, you will have warranted that your unit has not been insulated with Urea Formaldehyde Foam Insulation. You will likely be asked to sign a further warranty to that effect at the time of closing. If you know or suspect that the unit may have been insulated with Urea Formaldehyde (which is very unlikely), please contact your lawyer immediately.

If your unit is currently mortgaged, it will be necessary to pay out that mortgage as of the date of closing. Your lawyer will make the appropriate arrangements. You should ensure, however, that all of your mortgage payments are up to date including those that may be due just prior to or on the day of closing.

You may be charged a prepayment penalty on the mortgage that is to be discharged if you pay it out before it is due. You should enquire about this prior to execution of the Listing Agreement, so that you may anticipate these charges in determining the sale price of the property. Please advise your lawyer of the name of your mortgagee and which branch you deal with.

The Agreement of Purchase and Sale provides that your lawyer is to pay the balance of the real estate commission and applicable sales tax at the time of closing. The agent will apply any deposits they hold towards their commission.

Under the Family Law Act of Ontario, regardless of how one takes title, no one may dispose of or encumber a "matrimonial home" without the consent of both spouses. Any contract, agreement, or transfer of title entered into in regards to the matrimonial home without the consent of both spouses is deemed to be null and void under the terms of the Family Law Act.

If you have made any changes to the common element areas adjacent to your unit, (such as decks, central air, balcony enclosures), please provide your lawyer with copies of the consent forms or other agreements that you may have obtained from the Condominium Corporation for such installations. If you have no written consent, please contact your Manager or the Board of Directors and try to get written consent for the improvements. If you are unsuccessful, please contact your lawyer and he or she will try to assist you. Do not advise the purchaser that you have consent for such improvements unless you can back it up.

The Agreement of Purchase and Sale that you will enter into for the sale of your unit will likely contain clauses that require you, among other things, to advise the purchaser if you have any knowledge of the following:

In a purchase transaction, your lawyer, will arrange for the title to the unit and the condominium corporation to be searched in accordance with generally accepted standards, as well as making a number of other enquiries. These may include, zoning confirmation, work orders, realty taxes, utility arrears, obtaining an estoppel certificate, and searching Sheriff's executions. A number of other enquiries may be made if your lawyer determines they are necessary for your particular transaction. Your lawyer will also prepare and submit a list of requisitions to the vendor's solicitor outlining matters relating to the ownership or title to the unit that he or she feels must be addressed before the closing can take place.

If you are financing your purchase transaction, your lawyer will also attend to the completion of all mortgage documentation, address your mortgage lender's title requirements and arrange for the mortgage funds to be obtained prior to closing.

Prior to the closing date, your lawyer will review with you any issues that he or she feels you should be aware and arrange for you to execute all necessary closing documentation. On the closing date your lawyer, (or his or her conveyancer) will attend with the solicitor for the Vendor to complete the transactions. Sometime after the completion of the transaction, your lawyer will provide you with his or her report as to our opinion of your title.

For the purchase of a new unit your lawyer will, in addition to the matters noted in the preceding paragraphs, also assist you in reviewing your Agreement of Purchase and Sale and the disclosure statement so that you will understand just what you are buying. He or she will also assist you with the interim closing including making sure that the municipality has given its consent for you to occupy the unit and verify with the vendor that additional deposits will be properly held in trust pursuant to the provisions of the Condominium Act.

In connection with a sale transaction, your lawyer will, among other things, draft the transfer of title along with all other necessary closing documentation. He or she will calculate the final purchase price and prepare a statement of adjustments. Your lawyer will arrange to pay out and discharge any existing mortgage that may be registered against your title. He or she will also respond to any requisitions of title that might be submitted by the solicitor for the Purchaser. Prior to closing, your lawyer will attend with you to execute all closing documentation. On the closing date itself, your lawyer will arrange to meet with the purchaser's solicitor to complete the transaction and arrange for the purchase funds to be disbursed including payment of any outstanding mortgage and the balance of the real estate commission. Upon completion of the transaction, your lawyer will provide you with a final report and cash disbursement statement.

It is important for you to discuss the matter of your legal fees, estimated disbursements and GST with your lawyer as well as the amount of your Land Transfer Tax, as soon as possible, so that you may make arrangements to have these amounts available at the time of your closing.

The legal fees charged for real estate transactions will vary from one law firm to another (and from one City to another) but you will generally find that they all fall within a range of several hundred dollars of one another. Your lawyer can usually give you fairly accurate estimate of what your fees will be although the quote would be subject to any unusual circumstances. If applicable the fee would normally include the work required to place a mortgage on the property being purchased or discharge one on a sale, (you should confirm this).

The legal fees for the purchase of a new condominium unit will usually be higher than those charged for a re-sale unit due to the extra work involved in reviewing the Disclosure and Agreement during the recission period and helping you at interim closing.

Disbursements are those costs that your will incur on your behalf in order to complete your transaction. For example, in a purchase transaction, he or she must pay a fee: to the Land Titles Office to review the title for the unit you are purchasing (approximately $20.00); for an estoppel (status) certificate, ($50.00); to register the transfer and mortgage, ($50.00 each); to search executions, ($11.00 per name); to confirm zoning and work order compliance, ($80.00 - $150.00, depending upon the municipality and time constraints); as well as other charges for the various searches and enquiries that may be appropriate to complete your transaction. The disbursements incurred on a purchase transaction can be quite substantial and can easily reach $600.00. Your lawyer could provide you with a rough estimate of what your disbursements may be. Disbursements on a sale transaction are usually substantially less than on a purchase transaction.

In addition to disbursements, the Goods and Services Tax is payable on both our legal fees (7%) as well as on some, but not all of, the disbursements. It is also payable on the commission you pay your real estate agent on the sale of your unit.

Condominium is a lifestyle that is enjoyed by millions of Canadians. The sale of condominiums makes up for approximately 1/3 of all real estate transactions, (almost 45% in Toronto). There are many types of condominiums available on the market today that will suit almost anyone’s needs, ( and more to come under the new legislation) including, high-rise, townhouse, stacked, bungalow, freehold, recreational/seasonal, and even"granny" condos, (a larger townhouse unit for mom and dad and the kids with an adjoining or ground floor unit for grandma and grandpa). There is no question that condominium living is becoming the lifestyle of choice for many Canadians both young and old, but the key to successful condominium living is knowing what you are buying into so research your condominium choice thoroughly before signing on the dotted line.

RON DANKS is a partner with the Hamilton/Burlington law firm of Simpson, Wigle. He represents over three hundred condominium corporations throughout Southern Ontario. Ron is President of the Golden Horseshoe Chapter of the CCI and is also a Director on the National Board of CCI. He is a frequent lecturer at condominium seminars, and writes extensively on the subject. Ron has practised in the area of residential real estate for 14 years.

Barristers & Solicitors

21 King Street West, 4th Floor

P.O. Box 990

Hamilton, Ontario

L8N 3R1

Telephone: (905) 528-8411

Facsimile: (905) 528-9008

Internet: simwigl@netaccess.on.ca

E-Mail danksr@simpwiglaw.com