Condos are flying off the shelves like a hot toy at Christmas these days. First things first you need to get the lingo down. There are many things that go along with a condo and this article will help you become a well-informed condo seller or purchaser.
1st. “Condominium” was originally a Latin word-meaning joint or shared sovereignty. In today’s time it is described as a form of ownership of a property. A common miss conception is that a “Condo” is a certain type of property. Condos can be and are not limited to apartments, townhouses, detached homes, boat docks, horse stalls and almost anything you could think of. Today a condominium does not even need to have a structure on the property (bare land condo)
2nd. Bare land Condo’s are all around us, and you might not even know if you are in one yourself. In an ordinary condo the lot, the building and surrounding areas are all held in common. Many of today’s projects such as town homes and villas are being developed as “bare land” in which the structure is owned privately and the land is the unit
3rd.Condominium Plan is 7-digit number that is registered with land titles that provides a detailed map of the complex along with unit number’s unit factors and size. Every condominium has registered plan at the provinces land titles office. The plan should also make reference to the address for service of the condominium corporation, references to right of ways and easements.
4th. Unit is the part of the project that is individually owned. The boundaries of the unit are mapped out on the condo plan. Your legal unit number may be different than your municipal address.
5th. Unit Factor is a term used to define each unit owner’s share in the common property. Each condominium has a total of 10,000 “unit factors”. Usually unit factors are assigned by proportionate size. Unit factors are used to determine each unit owner’s share of the common expense as well as each unit's voting rights.
6th. Condominium Fees is a misleading term. A better term for these should be “condominium contributions”. Funds are collected from each unit owner then pooled together to cover common property expenses, reserve fund contributions and management costs etcetera. The formula for calculating fees is as follows.
Budget amount x Unit Factor for the unit = Monthly condominium
12 month’s 10,000 fees for that unit
7th. Reserve Fund is a pool of moneys collected out of your condo contributions to pay for replacement of “depreciating components”. Included in this would be things such as the roof, hall carpets, siding, paving, underground utilities and many other components.
8th. By Laws state how the business of the corporation should be carried out and gives the corporation the power to carry out the day-to-day operations. Bylaws will also spell out the obligations and restrictions of owners as well as the board of directors. Bylaws may state occupancy rules and restrictions, pet restrictions, noise restrictions as well as remedies for these issues. The bylaws also outline how the board is elected and how they are to function.
9th. The Board of Directors is a group of owners usually between 3 and 7 people. The board usually consists of a chairperson/president, vice-chair person/vice president, secretary and treasurer. The names and address’s of all board members is to be registered with land titles. A few of the duties of the board of managers includes enforcing bylaws, collecting fees, maintaining and repairing the common property and setting the budget as well as issuing financial statements. A management company usually assists the board of directors.
10. Management Company is chosen by the board of directors to manage the complex. Duties of the management company should include financial (collecting fees, accounting, budgeting, paying bills), supervision, maintenance and paperwork communications (filing, enforcing bylaws, organizing meetings). They are also responsible for supervising the maintenance contractors and providing condominium documents upon the sale of a unit in the complex.
Josh Nelson is a Certified Condominium Specialist and are under contract to Royal LePage Foothills R.E.S