Condo Primer

Below are answers to Frequently Asked Questions about condominium ownership in general, and the process of purchasing a condominium from Urban Capital in particular. If there is something further you would like to know, please contact our sales office for your development, or our head office at info@urbancapital.ca.

1. What is a condominium?

2. What are the steps in purchasing a condominium?

3. When do I choose my finishes and upgrades?

4. What is the process to occupy my unit and close my purchase?

5. What do I own when I purchase a condominium?

6. What warranties come with my condominium?

7. What rules and restrictions might I encounter in an Urban Capital condominium?

8. What’s included in my condo fees? 

9. What’s my vs. the Property Manager’s responsibility to maintain?

10. Other FAQ

The term “condominium” typically refers to a form of legal ownership, rather than a particular type of building. Condominiums are most often thought of as high-rise residential buildings, but they can also be townhouse complexes, low-rise residential buildings and even commercial complexes.

Condominium ownership 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 that may include lobbies, hallways, elevators, recreational facilities, walkways, gardens, etc. Common elements may also include structural elements and mechanical and electrical services. The ownership of these common elements is shared amongst all the individual unit owners, as is the cost of their operation, maintenance and ongoing replacement.

Each unit owner has an undivided interest in the common elements of the building. This undivided interest is usually expressed as a percentage equal to the size or value of the unit in question compared to the total size or value of all of the units in the condominium. This percentage determines your ownership percentage in the common elements as well as the monthly fees that you must pay towards their upkeep and renewal.

Your Agreement of Purchase and Sale (APS) & Disclosure Documents

To purchase a condominium from us you sign an Agreement of Purchase and Sale (APS) and receive a very large set of documents called the “Disclosure Documents”. Since 2009 we have been delivering your Disclosure Documents electronically.

Your APS and Disclosure Documents are extensive texts filled with important information and legal provisions that provide you with everything you need to know about your purchase. Please take the time to read them carefully. As we do not provide legal advice, we recommend that you forward these documents to your lawyer who will be able to answer any questions or concerns you may have.

Keep these documents in a safe place as they are your legal contract with us.

It is important to note that your APS provides for a 10 day “cooling off” period (more technically called a “rescission period”). During this time you can cancel your agreement with us for any reason. If you wish to cancel your agreement during this time, it is important that you send us notice of this in writing.

As added comfort you should know that your first deposit cheque is dated for the date after the cooling off period, so we do not deposit any of your cheques until after the cooling off period has expired.

Parking and Lockers

Parking and lockers can be purchased, depending on the unit type, at the time of the purchase of your unit. Parking and lockers also carry a percentage ownership in the building and as such are allocated monthly Condo Fees. The exact amount can be found in the Budget Section of your Disclosure Documents.

In order to secure a parking space or locker in the building, you must purchase parking or a locker at the time of your condominium purchase.

Note that you cannot choose your parking or locker location. Given that everyone would be looking for the same “ideal” spaces, we allocated parking and lockers randomly, in the interests of fairness.

See below under Other FAQ for information about handicapped parking spaces.

Submitting your deposits

Upon signing your APS you provide us with a series of post-dated deposit cheques. These cheques are deposited into our lawyer’s trust account and are only released to us when full deposit insurance is in place, provided either by:

• In Ontario, the Tarion Warranty Corporation (for amounts up to $20,000) and the additional Excess Deposit Insurance (for amounts over $20,000) that we obtain for the project, or
• In other provinces, by a nationally recognized insurance company from which we have purchased deposit insurance. Please refer to your APS for specific details on this.

Updates during construction

After you sign your APS and submit your deposits, then other than selecting your finishes and purchasing any upgrades (which is discussed in more detail below), there is really nothing for you to do other than wait for us to finish the building.

However, we recognize that there’s lots of uncertainty in purchasing a condominium pre-construction, so our aim is to provide you with updates throughout the construction process on the general status on construction and when we expect your unit to be ready for occupancy.

Full details of our obligations to advise you of your occupancy date can be found in the Tarion Forms attached to your APS (for Ontario sales) or in the body of your APS itself (for sales in other provinces).

We usually start our finishes and upgrades selections process when the building structure is close to complete, approximately half way through the construction process.

At that time you will have a personal, approximately one hour appointment with our design representative. We will also have sent you your finishing choices and upgrade options in advance and have made samples available for review ahead of time, so you can take extra time to think about the look and scheme you want.

Upgrade costs are not added to your purchase price or your mortgage. They are paid for in installments starting the date of your appointment. If you are thinking of purchasing upgrades, please remember to come to your selections session with cheques.

There are four basic steps to occupying your unit and then closing your purchase.

Step 1: Occupancy (Interim Closing)

You first take possession or “occupancy” of your unit when it is ready to be occupied. Prior to this time we will have notified you of your Confirmed Occupancy Date and you will have attended your Pre-Delivery Inspection (PDI) (more on this later).

At the time you take occupancy of your unit it is most likely that the condominium will not yet have been “registered” (more on that later), so we cannot transfer legal title of your unit to you (as the title has not yet been created).

So, instead of paying us the balance of your purchase price, you are required to pay a monthly Occupancy Fee (similar to rent), which consists of three elements:

1. Monthly Condominium Fees
2. Estimated Monthly Realty Taxes
3. Monthly Interest Component on the balance of your purchase price (i.e. just the interest component, not any principal repayment) (for example, if your condo costs $300,000 and you have given $50,000 in deposits, it is calculated on $250,000). The interest rate is calculated in accordance with the Condominium Act.

These payments are similar in scope to what you will be paying once you take ownership, with the exception that there is no re-payment of principal.

Please note that the Occupancy Fees are governed by the Condominium Act and are standard in all condominium purchases.

Approximately five to ten days prior to your Occupancy Date, we will provide your lawyer with the specific calculation of the above amounts, and you will provide us (again through the lawyers) with a series of post- dated cheques.

At this time you should arrange for your insurance to be in place. It is important to be aware that while the building and its common elements are insured by the project and subsequently by the condominium, the contents and upgrades inside your individual unit are not covered. It is your responsibility to obtain this prior to moving in.

Please note that your Occupancy Date is not necessarily the same as your move-in date. Your Occupancy Date is the date on which your Interim Closing takes place, an action involving your and our solicitors, while your move-in date is the date you actually move in to your unit, as arranged through the Property Manager.

Please also note that Occupany Dates are different for different units, as units on the lower floors may be completed months prior to those on the upper floors.

Step 2: Condominium Registration

A condominium is formally created when it is “registered” with the provincial registry or land titles office. Once all the units and common elements within the building are “substantially complete” (a technical term certified by our architects), the condominium registration process begins. This process is initiated when we submit plans and paperwork to the proper governmental authorities. The condominium’s Declaration and Description are ultimately registered in the Land Titles Office, following approval of these documents by the authorities.

At the time the condominium is “registered” the one property that existed before registration is legally divided into individual condominium units plus the common elements. Because no title has yet transferred to any individual purchaser, at this point we still own the property, although we now own it in the form of individual condominium units (together with the common elements), rather than one undivided property.

It is our responsibility to manage the condominium registration process, and we will notify you within 30 days of registration. The entire process could take several months following your Occupancy (Interim Closing).

Step 3: Unit Transfer (Final Closing)

The Unit Transfer Date, or Final Closing Date, is the date upon which you receive title to your unit, and occurs approximately four weeks after the condominium has been registered. We will give your solicitor notice of the actual Unit Transfer Date. In Ontario all units in the building typically close on the same Unit Transfer Date. In other provinces final closings can take place over a number of days.

On the Unit Transfer Date, your purchase and sale transaction with us is “closed”. The closing is based on a statement of adjustments that our lawyers prepare. This Statement of Adjustments accounts for outstanding occupancy fees, realty taxes, warranty fees etc. as provided for in your sales contract. At this time, your lawyer will receive a deed/transfer of title to your home (for ultimate registration), in exchange for your payment of the outstanding balance of the purchase price. This outstanding balance can either come from a final cash payment or from a bank that is providing you with your mortgage.

It is your responsibility to make all arrangements with your bank and lawyer and be prepared to close your purchase on the Unit Transfer Date. Late fees and/or interest may be charged if you do not close on your Unit Transfer Date.

Any post-dated interim occupancy cheques received and not cashed will be voided on this day.

Step 4: Turnover

Once the unit transfers have taken place, a Board of Directors, elected by and generally made up of the individual condominium owners and occupiers, takes responsibility for the management of the corporation’s business affairs. There is usually a Turnover Meeting where this transfer of responsibility (from us to the newly elected Board) takes place. This turnover meeting typically happens a couple of months after the Unit Transfer Date.

When you purchase a condominium, you own your unit, as well as the specific percentage of the common elements as is allocated to your unit. The boundaries of each individual unit and the percentage of common elements you own may vary from condominium to condominium, depending on how they are specified in the condominium’s governing documents.

The boundaries of your condominium unit are an important consideration, particularly if you plan to undertake any alterations or renovations. The unit typically includes any equipment, systems, finishes, etc. that are contained only in the individual unit.

Components of building systems that serve more than one unit, such as structural elements and mechanical and electrical services, are often considered part of the common elements, particularly when they are located outside of the unit boundaries specified in the condominium’s governing documents.

There may be some parts of the condominium complex that are called “exclusive use common elements.” They are outside the unit boundaries, but are for the exclusive use of the owner of a particular unit. Balconies and terraces are common examples of exclusive use common elements. While these spaces are exclusive to your use, there may be restrictions on how and when you can use them.

Your condominium documents will spell out your unit boundaries, what are considered common elements, and what are considered exclusive use common elements.

Ontario

Your Ontario condominium is fully warranted by Tarion Warranty Corporation. This warranty ensures that we meet a professional standard of construction and that your condominium is constructed to industry standards. Importantly, Tarion publishes very detailed Construction Performance Standards, reference to which can be made if there is a disagreement as to the exact standard of construction that must be met.

As part of Tarion’s warranty program you have the opportunity to notify us of in-suite deficiencies on your PDI form, 30 Day Form and 1st, 2nd and 7th Year Forms.

Our contractors work hard to limit the number of deficiencies in both the suites and the common elements. However, if there are deficiencies in your unit, reporting them in the proper fashion makes resolving them much easier for everyone.

At the time of your Pre-Delivery Inspection (PDI), you will be given a copy of Tarion’s Homeowner Information Package, which details Tarion’s Statutory Warranty; your Form submission dates; tips for maintaining your new home; and many other important facts and procedures. We recommend that you read this information thoroughly. Feel free to contact us should you have any questions about its content.

In addition, as part of your Tarion Statutory Warranty, you are protected against defects in work and materials, delayed closings without proper notice, and unauthorized substitutions of marketed features.

To learn more about Tarion please view the website at www.tarion.com.

 Other Provinces

There is no equivalent of Tarion in other provinces. However, either our own Builder’s Warranty or a third party warranty (such as provided by National New Home Warranty) is provided in all our developments outside of Ontario. Please check your APS for the particulars of the warranty provided in your development.

Where there are no applicable warranty standards in your jurisdiction, it is our policy to use the Construction Performance Standards as set out by Tarion as the determining standard.

Every condominium is governed by its own set of rules, regulations and by-laws. These are necessary to ensure that condominiums are properly operated and maintained, and also to define the rights and obligations of the individual owners. With respect to the latter, condominiums may have restrictions regarding the number of occupants per unit, pets, noise, parking, and when certain amenities may be used. Urban Capital condominium developments typically allow for two pets, but provide for specific restrictions on size and type. Restrictions on pets are typically found in the condominium declaration.

Urban Capital condominiums also typically have rules concerning the alteration of the unit space or its appearance. For example, there are typically rules that limit what type and colour of blinds you may install in your unit, and what you can store on your balcony, in order to maintain a consistent look of the exterior of the building.

The rules of your condominium are outlined in the condominium’s governing documents. Drafts of these documents were provided to you upon your original purchase, and the final form will be provided to your solicitor as part of your closing process.

If you have questions or are uncertain of these condominium rules and regulations, contact your solicitor or the Property Manager.

Unit owners pay a monthly condominium fee to cover their portion of the operating expenses of the common elements. A portion of this fee is allocated to the Reserve Fund that is created to ensure that there are sufficient funds available for major repairs and replacements over the life of the building. Condominium fees are typically calculated based on the annual operating cost of the entire condominium, and then multiplied by each unit’s percentage ownership.

Condominium fees may include:

Day-to-day care and upkeep of the common elements (e.g. snow removal, landscaping, cleaning of the common elements including carpets and non accessible exterior windows, heating/cooling system maintenance);

Contributions to the Reserve Fund, which is used to pay for major repairs to and replacement of common building systems to ensure that the condominium is kept in good repair over the life of the building;

• Property management fees;
• Building repair and maintenance;
• Salaries of condominium employees (e.g. the concierge);
• Costs of operating and maintaining the amenities (e.g. the pool, recreational facilities, party room);
• Common area utilities; and
• The condominium building insurance (as opposed to your own condominium unit insurance, which should include contents insurance).

What is, and is not, included in a condominium’s monthly fees should be clearly outlined in the operating budget. For the first year of the condominium’s operation, you should refer to the Budget contained in the Disclosure Documents that we provide to you and your lawyer at closing. This budget formed the basis of the condominium fees that your Property Manager will be collecting from you for the first year.

For subsequent years your Board of Directors, working with your Property Manager, determines the annual condominium budget. As an owner you get to approve this budget at the Annual General Meeting of the condominium.

Condominium fees are neither optional nor negotiable. For example, unit owners are required to pay a share toward the care and upkeep of amenities such as swimming pools, regardless of whether they plan to actually use such amenities. Unit owners cannot withhold payment of their condominium fees if they are displeased with the Board of Directors, the Property Manager or other unit owners. In Ontario, the condominium corporation can register a lien on your unit if you do not pay your share of the common expenses. This means the corporation may have the right to sell your unit to recover the money it is owed. At a minimum, all the costs that the corporation has incurred to collect your fees will be charged back to you, with interest.

Most condominiums corporations contract out the day-to-day operations of the condominium to a property management company (“Property Manager”) under the direction of the condominium’s Board of Directors. The cleaning of common areas; payment of common element utility bills; operation and maintenance of the domestic hot water and heating and air-conditioning systems; snow and garbage removal; and the collection of monthly maintenance fees typically fall under the jurisdiction of the Property Manager.

There are usually limits on the Property Manager’s authority. For example, anything that requires a major expenditure, or an expenditure not accounted for in the annual budget, may have to be approved by the Board of Directors. The Property Manager is also not responsible for items or operational problems within individual units, unless they are related to the common elements (e.g. heating systems, roofs, windows, exterior walls).

You as the condominium unit owner are responsible for some maintenance duties, and the condominium corporation is responsible for others.

Maintenance duties for the unit owner typically include:

• Internal unit plumbing, appliances, heating, air conditioning or electrical systems that are contained in and serve only that unit;
• Cleaning window surfaces that are accessible from outside the unit (i.e. where there is a balcony or terrace); and
• Cleaning some parts of the common elements like balconies and patios that are assigned to or for the exclusive use of the unit holder.

Maintenance duties for the condominium corporation typically include:

• Common area plumbing, electrical and heating and air-conditioning systems;
• Roof repairs;
• Window and door repair and replacement;
• Landscaping;
• Upkeep of recreational amenities and parking areas; and
• Any other part of the property that is not part of a unit.

Sometimes the responsibility for maintenance and repair can be shared. For example, a heating and air conditioning (HVAC) system may be part of the common elements, but the unit owner may be responsible for some tasks such as changing filters.

Please contact the Property Manager if you have any questions about your maintenance responsibilities.

I'm a purchaser and have some questions about the project and my purchase, who do I contact?

 The best place to start is always with the sales office. They will be able to answer the majority of your questions and are there to help you. Please visit the development’s website for contact info.

If you are not satisfied with the answer you get at our sales office, please contact our head office using the contact information on this website.

My contact information has changed, who should I notify?

Providing us with your current contact information is crucial from the day you sign your agreement to after you move in. Letters and/or emails are sent both from our office and our lawyer's office with vital information on your purchase. We will contact you with notices about your deposits, construction updates, move-in dates, general project information and invitations to events we are hosting in your area.

Please contact the sales office with any changes and be sure that they always have your current information on file.

 How do I report a deficiency in my suite?

Details on who to contact for deficiencies are included in the Homeowner Guide (previously called Welcome Book) that you received at your Pre-Delivery Inspection (PDI). All Homeowner Guides are available to be viewed or downloaded in the next section of this Customer Care portion of our Website.

 How do I get a copy of the Declaration and By-Laws?

Your condominium’s Declaration and By-laws will be provided to your solicitor after the condominium is registered and will be held by the Property Manager.

How can I become a member of my new condo board?

Board members are elected by the building’s owners. Once your condominium building is registered, a general meeting will be called so that the building can be officially “turned over” from Urban Capital to the condominium corporation. At this meeting those wishing to hold a board position typically make a short speech about who they are and what they can bring to the board. After all those interested have spoken, a ballot vote is taken and the first year board is elected.

Are there any restrictions on renting out my unit?                                                                                      

Many condominium purchasers purchase their unit as an investment with the intent to rent it out. While most condominium corporations allow owners to rent their units to third parties, there are typically a number of steps that owners must take before doing so. These requirements are available from the Property Manager, but at a minimum typically include completing a Tenant Information Form, as the Property Manager must always be aware of who is living in the unit and their contact information must be available to the Property Manager in the event of an emergency.

What if I need a handicap parking space?

If you have a handicap permit, please make sure the sales team is aware of this either at the time of purchase or a few months prior to move-in and we will allocate your spot accordingly.

If for any reason you require a handicap space after moving in, this should be addressed with property management and they will do their best to accommodate you.

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