Purchasing a Condo? This Is Why You Need A Lawyer

When you’re buying a condo, a real estate lawyer plays a crucial role in the purchase. While buying a condo shares similarities with buying a single-family home, such as signing an Agreement of Purchase and Sale, there are distinct legal intricacies specific to condominium ownership that require your real estate lawyer’s attention.

Often, people wait until the closing date of a real estate deal is near before contacting a real estate lawyer. At that point, the lawyer wraps up the paperwork and transfers ownership to the new owners. However, when it comes to buying a condominium, it’s important to engage a real estate lawyer as soon as you receive the Purchase Agreement. This early involvement helps you avoid problems down the road because understanding all the legal aspects and extra rules related to condo buildings is crucial before committing to the contract.

When Buying A Condo Know That It’s More Than Just Your Unit

When you buy a condo, you’re not just buying an individual unit, you’re buying into a community. You solely own your personal living space but you also share ownership of common elements within the condominium complex, such as hallways, elevators, parking areas, and recreational facilities. This is run by the condominium corporation, a legal entity responsible for managing the common areas and ensuring compliance with the Condominium Act, 1998.  You may also own “Exclusive use” common property, like your balcony, parking space, and storage locker.

Be Sure To Review Condominium Rules With Your Lawyer

When you’re looking into buying a condo in Ontario, understanding the rules and regulations set out in the bylaws and declarations can save you headaches in the future. These documents lay down the dos and don’ts for condo unit owners within the community. So, as a potential buyer, taking the time to carefully review them with your lawyer is a smart idea. 

Your real estate lawyer will carefully go through the condominium’s rules and regulations, explaining how they affect you as a potential new owner. They’ll point out any responsibilities you’ll have, like what you can and can’t do in shared areas, when you can use them, and what happens if there’s damage caused by you or your guests. They’ll make sure these rules won’t cramp your lifestyle once you move in. For instance, there might be limits on the number of people allowed in your unit, what changes you can make to it, rules about running a business from your home, and restrictions on what you can store or use on your balcony. 

There could also be rules about noise levels, whether you can have pets, and when you can use amenities like a gym or pool. Additionally, you might be asked to attend meetings or join an activity board. Once your lawyer has looked over all the documents, they’ll talk through each of these points with you. Also, it’s important to grasp how these rules can be changed over time. Amendments to the bylaws and declarations can have a big impact on your rights and obligations as a condo owner, so understanding the procedures for making these changes is essential. It’s also important to understand what input you’ll have on changes if they get voted on, and if you have an opposing view on a rule what if anything you can do about it.

Why You Need To Be Familiar With The Status Certificate

After you’ve signed the Agreement of Purchase and Sale, there’s a period where certain conditions need to be met. During this time, you have the legal right to obtain a status certificate from the owner or property manager of the condo unit you’re buying. 

Your real estate lawyer should review this document before the deal becomes final. Why? Because it’s important to make sure the condo corporation is doing well financially. The status certificate contains important information like how much you’ll need to pay in monthly fees if there are any expected extra charges coming up, the condition of the savings fund, and if there are any legal issues involving the condo corporation. It comes as part of a package that usually includes financial statements, budgets, and other legal documents. 

Sometimes, the fees stated in your purchase agreement might be lower than what’s on the status certificate. This can happen if there’s a timing issue with the condo’s financial year. If this happens, your lawyer will let you know and will guide you on what to do next.

What Are Reserve Funds?

In most condominiums, it’s common to have a reserve fund set aside. This fund is usually around 10% of all the money the condo spends on running things. Its purpose is to cover big expenses that might come up over the years, like fixing or replacing important parts of the building such as the roof, roads, elevators, and plumbing. 

If the reserve fund doesn’t have enough money in it, the people who live there now and in the future might have to pay extra charges called “special assessments,” or the condo corporation might have to borrow a lot of money for a long time. Be sure to review this fund with your lawyer to ensure it is adequately funded, so you don’t face increased fees or assessments in the future.

To make sure condo buyers are protected, the Condominium Act states that the condo has to do a special study of its reserve fund regularly, usually every three years. This study looks at what shape the essential parts of the building are in, how long they’re expected to last, and how much it might cost to fix or replace them.

Don’t Forget About Inspections & Assessments

Before completing your purchase, it’s important to consider several legal factors. Firstly, it’s highly recommended to hire a qualified inspector to thoroughly examine the condition of your condominium unit. This inspection is crucial for uncovering any structural or maintenance issues that may exist. 

Finally, be sure to research any current or potential special assessments. These assessments can arise unexpectedly and may have a significant impact on your financial planning, so it’s important to be aware of them beforehand.

Working With An Experienced Real Estate Lawyer Can Make Your Condo Purchase Worry Free

Retaining a real estate lawyer is not just mandatory for completing your transaction but also crucial for grasping the complexities of a condominium real estate purchase. Your lawyer will carefully review contracts, scrutinize legal documents, and provide invaluable advice throughout the process.

At Hukam Law, we have the experience to review all the legal aspects involved with buying your condo and will ensure that all the details are covered and your best interests are looked after. If you have any questions or need assistance with a future purchase or sale, feel free to reach out to us at 📞 705-915-0884 or via email at info@hukamlaw.ca. We’re here to make sure you’re fully informed and supported throughout any real estate transaction.

***The information provided in this blog is for general informational purposes only and should not be construed as legal advice. If you have legal questions, we strongly advise you to contact us.