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NL
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ALL YOU NEED TO KNOW ABOUT CONDOMINIUMS
Pleasantview
East Drive (Building 106)
Pleasantville
St. John’s, NL
Developer: JMJ Holdings Ltd.
Date Registered as Condo Corporation: July 8, 2011
Number of Units: 20
Uses Permitted: Residential – Single Family
What is a Condominium?
A “condominium” typically refers to a form of legal ownership, as opposed to a type of construction.
It consists of two parts. The first part is a collection of private dwellings called “Units”. Each unit is owned by and registered in the name of the purchaser of the unit.
The second part consists of the common elements of the building and may include lobbies, hallways, elevators, recreational facilities, walkways, gardens, etc.
Common elements may also include structural elements as well as mechanical and electrical services.
In short, “common elements” means the whole property with the exception of the units.
Typically a condominium consists of apartment-type units in a multi-unit building. However it is now very common for condominiums to be in the form of single-family dwellings, duplexes, as well as multi-attached housing units.
UP-TO-DATE CONDOMINIUM LISTINGS
PLEASE CONTACT ME TO:
ARRANGE A VIEWING FOR ANY CONDOMINIUM PRESENTLY LISTED FOR SALE ON THE MLS SYSTEM,
ARRANGE A VIEWING OF THE GOVERNING DOCUMENTS, i.e. Declaration, By-Laws and Plans FOR ANY RESIDENTIAL OR COMMERCIAL CONDOMINIUM IN THIS PROVINCE,
ARRANGE TO RECEIVE IMMEDIATE AUTOMATIC NOTIFICATIONS WHEN A CONDOMINIUM IS LISTED FOR SALE ON THE MLS SYSTEM
ASK A QUESTION REGARDING ANY ASPECT OF BUYING OR SELLING A CONDOMINIUM OR ON CONDOMINIUM LIVING IN GENERAL,
SELECTION OF CONDOMINIUM PHOTOS AS WELL AS ANSWERS TO YOUR MOST FREQUENTLY ASKED QUESTIONS
Refer to the Condominium Act and Regulations
for full details on the various topics covered below.
What do you own when you buy a condominium?
When you buy a condominium, you own your unit, as well as a percentage of the common property elements allocated to the unit.
The boundaries of each individual unit and the percentage of common elements that you own may vary from one condominium to another depending on how they are specified in the condominium’s governing documents such as the declaration and description.
What you own can also depend on the style of construction, i.e., whether the condominium is a high rise or low-rise building, townhouse complex, or an individual house
What different kinds of condominiums are available?
There are both residential and commercial condominiums.
Residential condominiums basically consist of two types – those where the individual units are contained in a high or low rise building and those that are single detached houses, duplexes and row houses.
Commercial condominiums also come in different styles, shapes and sizes and operate in much the same way as residential comdominiums.
The type of condominium can have a significant impact on what is included in your unit and what is part of the common elements.
It is, therefore, very important that you carefully read the condo declaration to ensure that you fully understand this area.
What is a condominium corporation?
A condominium corporation is created when a property owner (declarant) registers, at the provincial condominium registry, a declaration and description under the Condominium Act.
The members of the condo corporation are the owners of the units and have a duty to control, manage and administer the common elements and the assets of the corporation.
It must also take all reasonable steps to ensure that the owners, the occupiers of units, the lessees of common elements and the agents and employees of the corporation comply with the Condominium Act, the regulations, the declaration, the bylaws and the rules.
The name of the corporation must be approved by the registrar of condominiums and must end with the words “condominium corporation.
What do I look for when purchasing a new condominium
Some people prefer to purchase a new condo, especially one in the early stages of construction as this gives them an opportunity to make certain changes with regard to the layout, materials used, appliances installed as well as special features such as wiring for sound, special lighting etc.
It is very important to understand what is and what is not covered in the purchase price of your unit. Pay particular attention to HST. Generally it is included in the purchase price with the purchaser agreeing that the builder can claim any government rebates. However make sure that you confirm that the HST is included in the purchase price because if it isn’t it can add substantially to the cost of your condo.
It is also important that you obtain a copy of the condo declaration, by-laws and other governing documents as well as a listing of the various features/amenities included in the development.
Also obtain a copy of the budget for the first year after registration, including the amount of the condo fee and the amount set aside in the reserve fund.
Is the Condominium that you plan to purchase registered under the province's Condominium Act?
In order to be legally considered a condominium, a property must be registered as such in the condominium registry in the jurisdiction where it is located.
In order to register the property as a condominium, the owner must subdivide the property into units, with common elements pertaining to those units, and register the property as a condominium.
What is the Condominium Registry?
It is a provincial registry (part of the Registry of Deeds, Companies and Securities) that maintains a separate file for each registered residential and commercial condominium in the province.
Each file contains a copy of the original registration documents such as the declaration and description. It also contains a copy of all other documents such as amended declarations and descriptions, court orders, by-laws, notices of liens and other documents presented for registration under the Condominium Act.
What are the requirements for registering a condominium under the Condominium Act?
The property to be registered must be comprised of freehold land only,
The declarant or someone on his/her behalf must submit a declaration and description of the property, to be registered, as well as a copy of the proposed by-laws of the corporation, to the registrar of condominiums. (refer to declarant, declaration, description and by-laws below)
Also, upon submitting the declaration and description for registration, the declarant must submit a statutory declaration from a practicing member of the law society which states that:
– the person whose name appears in and executes the declaration,as the owner, is the owner of the freehold estate in the property,
– a person who holds an encumbrance of the property has received the notification with a copy of the declaration and description required by section 13 of the Condominium Act, and
– all rates, real property taxes, assessments, charges and that taxes levied or imposed upon the
owner and occupier of the of the property, or in respect o the property have been paid
Who is a Declarant?
A “declarant” is a person who owns the freehold estate in the land described in the description and who submits a declaration and description for registration under the Condominium Act.
What is included in a Condominium’s Declaration
In accordance with the Condominium Act, a declaration must include information such as a full description of the property and buildings, a description of each unit, and a description of or reference to each common element.
It must also include the percentage that the owner of a unit owns of the common elements and is therefore required to pay for the cost of their maintenance, repair and renewal based on that percentage of the total cost.
What is included in the Condominium Description?
The description, one of the main condominium documents, includes a written description and plan showing the perimeter of the horizontal surface of the land and the perimeter of the buildings; specification of the boundaries of each unit as well as diagrams showing the shape and dimensions of each unit and the approximate location of each unit in relation to the other units and the buildings;
a certificate of a person who is authorized to practice architecture in the province that all buildings have been constructed in accordance with the architectural plans and, if there are structural plans, a certificate of a person who is authorized to practice engineering, as defined in the Engineers and Geoscientists Act, 2008 , that all buildings have been constructed in accordance with the structural plans;
What are the Condominium By-Laws?
The by-laws provide for the control, management, administration, use and enjoyment of the units and common elements.
They include rules of procedure and other matters considered necessary for the proper functioning of the board, the composition and qualifications of the Board of Directors, regulating the conduct of meetings, including fixing quorums and setting out the voting rights of members of the corporation.
What is a Disclosure Statement?
A disclosure statement is a document that the owner (declarant) is required to attach to an agreement of purchase and sale when the buyer(s) are purchasing a new condominium directly from the declarant/owner instead of from an existing unit owner.
Where the disclosure statement is not available at the time of entering into the agreement of purchase and sale, the declarant is required, under the act, to provide it to the purchaser as soon as it is available and, at the latest provide it to the purchaser within 5 days of its receipt by the declarant.
The corporation will likely charge you a fee for providing the disclosure statement
If the disclosure statement omits material information that it is required to contain, it shall be considered to include a statement that there is no information relating to that particular area.
The disclosure statement binds the corporation, as of the date it is given, with respect to the information that it contains, against a purchaser or mortgagee of a unit who relies on the statement.
What is included in a Disclosure Statement?
A disclosure statement must include the following:
– a statement whether one or more units may be used for commercial or other
purposes not ancillary to residential purposes;
– a statement of the portion or number of units that the declarant intends to lease;
– a copy of the existing or proposed proposed declaration, by-laws or rules;
– a statement as to whether the by laws of the corporation have been registered;
– a statement of all outstanding judgments against the corporation and the status of
legal actions to which the corporation is a party;
– a copy of the budget statement described in section 44 of the Condominium Act;
– a copy of the budget of the corporation for the current fiscal year if more than
one year has passed since the conveyance of the first unit;
– a copy of the reserve fund study
What is an Estoppel Certificate?
An estoppel certificate is a document that the condo corporation, at the request of the existing unit owner(s), provides, generally to someone who is in the process of purchasing a condo unit from the existing unit owner instead of directly from the developer (declarant)
Where the estoppel certificate is not available at the time of entering into the agreement of purchase and sale, the declarant must provide it to the purchaser as soon as it is available and, at the latest, provide it to the purchaser within 5 days of its receipt by the unit owner.
The corporation may charge a reasonable fee for providing the estoppel certificate.
What is included in the Estoppel Certificate?
An Estoppel Certificate is a document that you request when you are purchasing a resale condominium from the existing owner as opposed to purchasing a new unit from the declarant/owner/builder.
It provides you, the purchaser, with valuable information regarding various aspects of both the unit you are purchasing as well as with regard to the common elements.
The certificate must specify the date on which it was made and contain the following as set out in section 42 of the Condominium Act:
(a) a statement of the common expenses for the unit and the default in the payment of the common expenses where there is a default;
(b) a statement of the increase in the common expenses, where there is an increase for the unit, that the board has declared since the date of the budget of the corporation for the
current fiscal year and the reason for the increase;
(c) a statement of the assessments that the board has levied, if there have been
assessments, against the unit since the date of the budget of the corporation for the current fiscal year to increase the contribution to the reserve fund and the reason for the assessments;
(d) a copy of the current declaration, by-laws and rules;
(e) a statement of all outstanding judgments against the corporation and the status of legal actions to which the corporation is a party;
(f) a copy of the budget of the th e corporation for the current fiscal year, the last annual financial statement and the auditor’s report on the statements;
(g) a copy of the most recent reserve fund study and updates to it;
(h) a statement with respect to:
(i) the amount in the reserve fund no earlier than at the and of a month within 90 days of the date of the estoppel certificate, and
(ii) current plans to increase the reserve fund where here are plans
(i) a statement of those additions, alterations or improvements to the common elements, changes in the assets of the corporation and changes in a service of the corporation that are substantial, where there have been additions, alterations, improvements or changes, that the board has proposed but has not implemented, together with a statement of the purpose of them.
What are the obligations of unit owners?
Unit owners are obligated, by the Condominium Act, to comply with the terms, conditions, and obligations imposed on them by the condominium’ declaration and by-laws. In addition, unit owners must comply with the various operational rules prepared by the condo’s board of directors and which flow from the declaration and by-laws.
It is therefore essential that you obtain a copy of and carefully review these documents before making a final decision regarding your purchase.
It is important that you understand and are prepared to live by these rules as they can and likely will be strictly enforced by the condo board.
What are the monthly condo fees and what is included in these fees?
Condo fees are an assessment against unit owners to cover the day-to-day expenses of operating the condominium’s property. It also includes an appropriate amount for inclusion in the Reserve Fund to cover the repair and/or replacement of the major common elements at some future date.
The corporation prepares its annual budget and divides the amount of the budget among the unit owners in accordance with the percentage of their obligations as set out in the condo declaration.
In those condominiums where the units are basically equal in size and/or value, the annual budget is divided equally among the unit owners.
In those condominiums where the units aren’t equal in size and/or value, the individual unit holders contribute on the basis of some predetermined formula often referred to as (their unit factor).
A common approach to determine the unit factor for each owner is to divide each unit’s square footage by the condominiums total square footage.
For example, if the total square footage is 60,000 sq. ft. and your unit is 1200 sq. ft., your unit factor is 1200 divided by 60,000 which is 2%. Therefore, on a $120,000.00 annual budget, your annual contribution to the common expenses will be 2% of $120,000.00 which is $2400.00 per year or $200.00 per month.
Examples of expenses that are covered by the monthly condo fees include, insurance coverage, snow clearing, maintenance of the condo grounds, audit and accounting fees, miscellaneous maintenance and repairs to minor common elements, payments to directors, (if applicable), contribution to the Reserve Fund, and management fees (if applicable), etc..
What is the financial status of the Condominium Corporation?
It is very important that you have a full understanding of the financial condition of the condominium corporation before you finalize the purchase of your condo.
Make sure that your realtor requests a copy of the corporation’s annual budget for the current year as well as a copy of the previous year’s financial statements. Carefully review this financial information.
If you don’t feel qualified to properly analyze this financial information, obtain the services of a qualified accountant to review and advise you on the financial status of the corporation.
How are the day-to-day operations of the condominium managed?
Most condominium corporations, especially those with a large number of units, contract out the day-to-day operations of the condominium to a property management company.
This company operates under the direction of the condo board. In the meantime, some condominiums prefer to deal with the day- to-day management themselves.
Condominium unit owners are responsible for those maintenance duties inside their unit, specifically those that are not part of the common elements
Are there any legal actions against the Condominium Corporation?
Before finalizing the purchase of a condominium, make sure that you find out whether or not there are presently any legal actions against the condo corporation.
If your condo corporation is successfully sued, you will be responsible for your share of any financial obligations arising from the action.
Make sure that your realtor asks, in your “Offer to Purchase” for disclosure of any active and/or pending legal actions against the corporation.
What is covered under the Condominium’s Insurance Policy?
Generally the condominium corporations is responsible for insuring the total property, including the common elements as well as the individual units. The policy also provides liability coverage for any claims for bodily injury and/or property damage occurring on the condominium property.
It is important that you carefully review and understand the condo’s insurance policy, as well as the condo declaration and by-laws in order to get a clear understanding of the amount and type of insurance carried by the corporation.
What is the Reserve Fund and is it sufficiently funded?
Section 49 of the Condominium Act requires that the condo corporation establish and maintain a reserve fund for major repairs and replacement of the common elements and assets of the corporation/ This includes, where applicable, roofs, exteriors of buildings, roads, sidewalks, sewers, heating, electrical and plumbing systems, as well as, elevators, laundry, recreational and parking facilities.
The fund is established and maintained by setting aside a percentage of the monthly contributions collected from the unit owners. The funds must be held in trust, and the interest earned from the reserve fund becomes part of the fund.
Does the board of directors have a plan in place to sustain the reserve fund at a level that will not require future significant increases in monthly condo fees or special assessments against the unit owners?
This is a very important consideration when buying a condominium. Unfortunately, few purchasers pay enough attention to this matter.
Fortunately the current Condominium Act, 2009 and Regulations address this issue by requiring regular reserve fund studies and requiring that a reserve fund be maintained at a level to meet the future financial obligations as set out in the study.
Are Condominium owners responsible for the payment of Municipal Taxes?
Yes. Condo owners pay municipal taxes on the assessed value of the condo plus a separate water tax, where applicable.
What are the rules regarding the rental of your condominium?
The rules regarding the rental of your condominium should be included in your condo’s declaration.
Before owners can lease their unit, they must cause the tenant to provide the corporation with an undertaking to the following effect:
“I ______(Name of tenant(s)_____, undertake that I, the members of my household and my guests, from time-to-time, in using the unit rented by me and the common elements, comply with the Condominium Act, the declaration, the by-laws and any other rules and directions of the condominium corporation during the term of my tenancy”
Note that this undertaking by the tenant does not relieve the unit owners from any of their obligations with regard to their unit
Can an Agreement of Purchase and Sale be cancelled?
Yes; a purchaser may, in accordance with section 43 of the Condominium Act, rescind an agreement of purchase and sale by giving a written notice of rescission to the declarant or the declarant’s solicitor or to the existing unit owner or the existing unit owner’s solicitor within 10 days of the later of,
– the date that the purchaser receives the disclosure statement or estoppel certificate and
– the date that the agreement of purchase and sale is executed by both parties.
Where a notice of rescission is received from the purchaser, the declarant or the existing unit owner, whichever applies, must promptly refund to the purchaser, without penalty or charge, all money received from the purchaser under the agreement.
Can a Condominium cease to be a Condominium?
Being a registered condominium means that the condominium is governed by the Condominium Act.
A condominium can be deregistered with the approval of all the owners of the common elements; and those persons having registered claims against the property.
Being deregistered simply means that the condominium is no longer governed by the provisions of the Condominium Act
For further details, including the “Notice of Withdrawal”, refer to section 63 of the Condominium Act.
IT PAYS TO BE INFORMED!
KEY POINTS TO LOOK FOR WHEN PURCHASING A CONDOMINIUM
- Ensure that the condo’s governing documents have been registered at the “Registry of Condominiums,
- Ensure that the condo corporation is in a sound financial position, with special emphasis on the “Reserve Fund”
- Understand your insurance requirements,
- Make sure that your realtor and lawyer are familiar with the condo legislation and experienced with condo purchases,
- Ensure that your purchase documents include the appropriate conditional clauses,
- Obtain, and allow sufficient time to review, the condo’s declaration, by-laws and financial information,
- Understand what is included as “common elements”, including “exclusive use” common elements,
- Check to see if the condo is covered under a new home warranty program, if it is a new development, and
- Review and understand what is covered by your monthly condo fee.
THERE IS A MUCH BETTER WAY!
Unfortunately most condominium buyers don’t get an opportunity to review the condo’s governing documents, i.e. declaration and by-laws until a few days before the purchase and sale is scheduled to close.
This review generally takes place in your lawyer’s office during a one hour or so meeting. It is almost impossible to adequately review the condo’s governing documents during this short period, especially given that there are also many other important issues to discuss and address at this time.
What if, during this meeting you become aware, for the first time, of something in the documents, that is significant enough for you to want to back out of the agreement of purchase and sale? This situation could become very problematic for both you and the seller.
There is a better way! What if, even before making an offer to purchase a condominium, you could take whatever time is necessary and at your convenience to review the governing documents for any condo ( residential or commercial) that you have an interest in purchasing. Contact me for full details on this much better way.
OBTAIN PROFESSIONAL ADVICE
Is your real estate agent and the other professionals such as your lawyer and financial advisor knowledgeable regarding all aspects of the province’s Condominium Act and Regulations as well as condominium governing documents such as Declarations, By-Laws, Plans, etc.?
There are many aspects of buying a condominium that are quite different from buying a regular house/property. For example, receiving and reviewing the various condominium governing documents as well as the many important items included in the condominium disclosure statement or estoppel certificate are different but essential aspects of buying a condominium.
It is therefore, very important that you engage the services of a real estate agent and lawyer, as well as an account and financial advisor, if deemed necessary, that either specialize in or are very knowledgeable about condominium purchases and ownership.
This webpage provides both condominium buyers and sellers with detailed, valuable and very relevant information regarding all aspects of selling, buying and owning a condominium.
The Outlier NL Realty website also provides buyers and sellers with up-to-date listings of residential and commercial properties for sale.
The website also provides details on private sale listings, including the sellers contact information and a link to the listing on realtor.ca.
On the site, you will also find valuable information for Newcomers to the province who are looking for information on all aspects of purchasing a home in the province.
Also learn about the brokerage’s 1% listing commission model as well as gaining an insight into the buying and selling of commercial real estate and businesses.
While you are on the site, take a few minutes to visit the resources, about, and contact pages.
Go back to the Outlier NL Realty Home Page for more valuable information on all aspects of residential and commercial real estate
Your questions and observations are welcomed!
INFORMATION IS FREE BUT PRICELESS!