Here are most commonly used terms that you may come across when dealing with pre-construction Homes and Condos.
Agreement of Purchase and Sale
Agreement of Purchase and Sale (APS) is a documents that outlines the rights and obligations of both Buyer and Seller. It will include the floorplan, schedules, special instructions, etc. You should carefully review this agreement and be clear of all the terms and conditions listed in it.
A Corporation without share capital, created under the Condominium Act for the purposes of administering the operation, maintenance and repair of the common elements and assets of the condominium. The Corporation is guided by a democratically elected Board of Directors consisting of homeowners.
The declaration is a “charter” document that creates the Condominium Corporation. It defines the boundaries for each home and the Common Elements. It allocates responsibility for the repair and maintenance of the home and common elements; outlines the condominium’ s provisions regarding occupancy and use (eg. the Rules and Regulations); specifies common expenses and each owner’ s proportionate interest in the common elements; and details each owner’s percentage ownership share of the overall common expenses.
At this time, all suites can Final Close allowing you to take title of your suite. If you Interim Closed before the community registered, you will be notified of your Final Closing date which will typically take place 4-6 weeks after registration. If you have not closed your suite prior to Registration, your closing process becomes a straight Final Closing.
The ownership of a condominium involves 2 aspects:
- Separate ownership and title of your home
- Shared ownership and costs of maintaining and repairing the common elements, which are shared by all homeowners.
The Common Elements within a community include all areas of the condominium that are not exclusively owned. These areas include the parking garage, roof, amenities, hallways, and more. The balcony or terrace attached to your suite, is considered an Exclusive Use Common Area. This means that you may exclusively use this area but it falls under community rules with regards to decorations and modifications.
A fund required to be set aside by the Condominium Corporation to cover the major repair and replacement of the common elements and assets of the condominium.
Maintenance fees are fees that are paid monthly for your share of ownership of the Condominium Corporation, and begin at Final Closing. Maintenance fees are calculated based on the percentage of ownership attributed to each “Unit” that can be owned within the condominium, which is formally outlined in the Condominium Declaration. While available “Units” will vary between communities, they include residential and retail suites, parking spaces, lockers, hobby rooms etc.
For each “Unit” you own, you are responsible for the percentage allocated to each as part of the annual operating budget. Generally speaking the more “Units” you own, and the larger they are, the greater the percentage of the annual budget you will be responsible for.
Your Occupancy Date is when you take legal possession of your new home and are able to move in. The rest of the building may still under construction but it’s usually the final finishing touches.
If your Occupancy Date is before the Final Closing, you will be required to pay Occupancy Fees on a month to month basis (just like rent) until Final Closing.
The Condominium Act, prescribe how these fees are to be calculated and are based on the following:
- Estimated Monthly Maintenance Fee
- Estimated Monthly Realty Taxes
- Estimated Monthly Interest Component
Title is a legal term that means you have legal ownership of the property, and is obtained when the owner signs the deed (transfer document) over to you. Title is then registered in the government’s land registration system.
The manner in which Title is taken in Ontario falls into two categories; Joint Tenancy, or Tenants in Common. In its simplest terms, Joint Tenancy permits, if two or more people are purchasing a property, that in the event of a death of one of the people, the entire property will become solely owned by the other purchaser. For Tenants in Common, each purchaser retains a percentage of ownership, that in the event of a death, the percentage of ownership will transfer to the person’s estate, rather than to the other owner.
At Final Closing, Title will be transferred into the name of the purchaser(s) on the Agreement of Purchase and Sale, unless our lawyers receive direction otherwise prior to Final Closing. You should provide instructions to your lawyer about how you wish to Take Title, at least four weeks before Final Closing to avoid additional legal expenses.
Final Closing is the process through which you will receive Title to your home. Final Closing occurs about four to six weeks after Registration. If you Interim Closed before the community registered, you will be notified of your Final Closing date which will typically take place 4-6 weeks after registration. If your Occupancy Date occurs after this time, you skip the Interim Closing process, and will move to a straight Final Closing. Mortgages will begin at Final Closing.