BUYING A CONDO

When buying a CONDOMINIUM from a builder, there several things that you should know before doing so.

WHAT IS A CONDOMINIUM
A Condominium is a freehold unit in a buidling that includes ownership in one of two other interests (or both):

1) Common Areas; and/or
2) a Parcel of Tied Land (POTL) or a Common Element Condominium Corporation (CECC)

COMMON AREAS
In addition to your unit, include interests in a common area in a building or on land, shared by all unit owners, and you have a right to access (e.g. pools, gym, party rooms, etc.). Condominiums are typically high-rise buildings but can also include town-homes and some private subdivisions.

POTLs or CECCs
These are a new development in Ontario and originate from British Columbia. Simply, a POTL is a collection of Common Elements of a Condominium owned by a Common Element Condominium Corporation (CECC).

In a CECC, there are no “units” and it consists of specific common elements, which may include roads, parking facilities, a clubhouse, a marina,etc. These common elements are tied to a separate property called a ‘parcel of tied land’ (or “POTL”s). The POTL could be a townhome or detached home, and doesn’t have to be contiguous to the CECC property, as long as it’s within the same land registry division.

10 DAY COOLING OFF PERIOD
Under the Condominium Act you are entitled to a 10 day cooling off period by law, which commences on the date when the builder has signed acceptance of the Agreement of Purchase and Sale and a fully executed copy has been provided to the purchaser.

During the cooling off period the purchaser may review the agreement and provide written amendments to the Agreement. The purchaser can also terminate the Agreement if they do not wish to proceed (called Rescission of the Contract).

BE CAREFUL!
There is a loophole in the Ontario New Home Warranties Plan Act that permits conversions (and attached buildings) to be exempt from Tarion Warranty Coverage. This means that if you purchase from a New Home Builder of a Converted Building (e.g. Church Lofts, Hotel turned into Condominiums, etc.) then your house or condo may not be covered by the Tarion Warranty.

Mister Real Estate Lawyer recommends that if you are buying a conversion condominium or home, contact your lawyer to discuss any possible concerns prior to signing any Agreements of Purchase and Sale.