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Eugene Palermo

 

Condo Terms

 

BOARD OF DIRECTORS

Each condominium has a Board of Directors that is elected by, and generally made up of, the unit owners. The Board is responsible for administration and management of the condominium corporation, including policy and finances, as well as decisions about the maintenance and repair of the common property. Some decisions will directly affect your use of common property elements. Unit owners are usually entitled to one vote for each unit they own for each position on the Board of Directors.

COMMON ELEMENTS OR COMMON PROPERTY

Common elements or common property are the portions of the condominium that are not owned by a unit purchaser as part of his/her individual unit. They are shared and co owned by all the individual owners of the condominium corporation. They usually (but not always) include such things as corridors, elevators, recreational facilities, playgrounds, lobbies, the grounds, central heating and air conditioning systems and parking. What is and is not included, as part of the common property elements, must be listed in the condominium’s governing documents. It is possible that some of the common elements may be reserved for the personal use of one or several owners. They are known as restricted or exclusive use common elements.

DISCLOSURE STATEMENT

In some jurisdictions, the developer of a new condominium must provide you with a disclosure statement before the agreement of purchase and sale is binding. The statement includes, among other things, a summary of features/amenities, proposed commencement and completion dates for construction, the condominium’s governing documents and budget for the first year after registration.

EMPHYTEUSIS

This term can refer both to a type of contract, an “emphyteutic lease” and to the right granted under an emphyteutic lease, “emphyteusis.” Under an emphyteutic lease, a property is leased to a tenant for a period of not less than nine (9) years and not more than ninety-nine (99) years. The lease will specify the annual rent to be paid, and will require the tenant to improve the property by doing things such as constructing and improving upon buildings. During the term of the lease, the tenant has the right to transfer the property to another party and to mortgage the property. At the end of the lease the tenant must return the property to the landlord in good condition. Any improvements made to the property will be owned by the landlord. This type of lease can be used in the development of commercial property or other forms of land development.

ESTOPPEL CERTIFICATE OR STATUS CERTIFICATE

Most jurisdictions require condominiums to issue information packages to prospective buyers. This package can contain the declaration, by-laws, rules and regulations, insurance information, reserve fund balance, other financial disclosures legal description of the unit and management contract (if applicable). It may also include information about any legal filings or judgments against the condominium corporation, the possibility of common expense increases, special assessments or insurance claims, all of which could affect condominium fees.

GOVERNING DOCUMENTS

These are the documents that describe how the condominium is organized and operated. They have different names in different provinces, but they can include declarations, by-laws and rules. They can contain provisions setting out the boundaries of the common elements and the individual units, the percentage of ownership each owner has in the common elements, the by-laws/budget and common expenses. Governing documents vary from one condominium to another and are filed with the land registry office when the condominium corporation is created.

PROPERTY MANAGER

The property manager handles the day-to-day running of the condominium, such as hiring of staff, maintenance and repairs. The property manager is under contract to the condominium corporation. A representative from the property management company usually attends board meetings. Some condominiums may not have a property manager. These are sometimes referred to as self-managed condominium. The Board of Directors, with the help of volunteers, will assume responsibility for the day-to-day management in these cases.

RESERVE FUND

This is a fund set up by the condominium corporation in a special account to cover the costs of major repairs and replacement of the common property elements over time. Usually it is at least 10 per cent of the corporation’s total operating expenses, although the criteria vary between provinces. In some jurisdictions, such as Quebec, the reserve fund is called a contingency fund. Reserve fund amounts and contributions are more accurately determined by a technical audit and reserve fund study undertaken by a qualified consultant.

UNIT

Home sweet home. The unit is the area that you actually own and hold title to. Repair and upkeep of the unit are generally your responsibility.

 

All content in these pages adapted from the Canadian Mortgage and Housing Corporation’s “Condominium Buyer’s Guide".

 

 Understanding Condominiums

 Questions about Condominiums

 Questions about Pre Constructions Condominiums

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