Choosing The Right Ottawa
Condo There are various sizes and kinds of building
forms when looking at condominiums such as office or warehouse
space that was converted into condominiums, re-sale condominiums;
and newly constructed condominiums. Potential buyers of the
condominiums need to be aware of the differences between the
condominiums and how it will affect their lifestyles.
New, Re-Sale or Conversion—What Are the Differences?
The term “New” is applied to condominium buildings
that are either under construction or have been newly completed,
while the term "Conversion" can mean the building
was previously used for something else but has been, or is
to be, renovated for residential use. For example, many loft
style condominiums are converted from former commercial or
industrial buildings. Conversions may also refer to the changing
of units from rental units to condominium units. Both new
and conversion condominiums are usually purchased from a developer.
“Re-sale” condominiums are units that have already
been occupied, typically in older buildings, and are offered
for sale by the current owner.
New Condominiums
Newly constructed condominiums can be an attractive option
for the prospective owner. They offer all of the benefits
of a newly constructed building (fresh appearance, modern
fittings, surfaces, elevators, appliances) while providing
unit owners with the chance to customize their units.
You can purchase a new condominium from the developer either
before or during its construction and well before the condominium
corporation is formed. A developer may have some unsold units
available after the condominium has been completed and registered.
In some market conditions, a developer may wait to sell a
majority (or all) of the units before registering the condominium
corporation or starting construction. Deposits are typically
required to secure, or reserve, a condominium unit in a new
development.
When looking over the drawings and specifications, ensure
that you are aware of the basis of any floor area measurements:
do they reflect the actual floor area of the unit or do they
include the exterior and interior wall floor space areas as
well? You should also be aware of plans to reduce the ceiling
height in any locations in the unit to accommodate ductwork
and other mechanical and electrical services. This can have
an impact on the aesthetics of the unit and affect the eventual
location of lighting fixtures and furniture as well as wall
decorations and fittings. Similarly, be aware of the future
location of heating and air-conditioning equipment, ventilators
and hot water heaters as this can affect the availability
and aesthetics of the space in your unit.
Other important issues to consider in the purchase of a new
condominium are related to construction quality. Some key
questions to consider include: Are there any special provisions
to limit noise between units? How are the units heated, cooled
and ventilated? How are odours controlled? Is the building
energy-efficient? Who operates and maintains the heating and
air conditioning systems? What options are available for suite
wall and floor finishes, cabinets and fixtures?
You should also be aware that the view from your unit might
be subject to change if the building is being constructed
in a newly developed area or as a part of a larger complex.
Be sure to ask about the future construction plans for adjacent
open areas as your view may change significantly with the
construction of a neighbouring high-rise.
When shopping around for a new condominium, it is important
to ensure that you are aware of what is and what is not included
in the purchase price. For instance, are there amenities such
as pools and parking? How is access to such amenities paid
for? Are finishes within the units included in the purchase
price? Are there other charges over and above the purchase
price you should be aware of? Are utilities (gas, electricity
and water charges) covered in the monthly condominium fees
or not? All such questions must be considered to ensure that
you can compare the overall costs associated with different
condominiums.
Rules and regulations for new condominiums vary from province
to province, therefore it is a good idea to check your provincial
legislation. New home warranties are often available for newly
constructed condominiums—make yourself knowledgeable
about what the warranties cover and for how long.
Quite often, there is a lengthy wait before a new condominium
project is completed and you can move in. It is always important
to evaluate the current state of the construction project.
Consider whether or not it seems reasonable that the project
will be completed by the date set out in the purchase agreement
from the developer before making your moving and financing
arrangements.
Agreements of purchase and sale may contain provisions that
allow the developer to extend the dates for making the units
available for occupancy. This can be problematic if you have
made arrangements to vacate your existing housing by a specific
date based on the original closing date. If this is an important
consideration for you, ensure that you are aware of any occupancy
delay clause in your purchase agreement and plan accordingly.
You should also check your provincial homeowner protection
legislation to learn your rights in cases where agreedupon
occupancy dates are missed.
Disclosure Statements:
In some jurisdictions, in compliance with legislation, the
developer of a new condominium must provide you with a “disclosure
statement” before the sale agreement is binding. This
includes, among other things, a summary of the condominium’s
features/amenities, the condominium’s governing documents
and budget for the first year after registration. This should
give you some indication of the rules, regulations and financial
situation of the condominium corporation before you buy into
it.
Your province may have legislation that provides a “cooling
off ” period during which buyers can review the information
contained in the disclosure statement and rescind their agreement
to purchase if they are not comfortable with their original
purchase decision. Ensure you obtain and carefully review
the disclosure statement within the specified timeframe. If
a cooling off period is not provided for in your provincial
condominium legislation, try making it a condition of your
offer to purchase to allow you to have a few days to review
this information.
New Home Warranties:
Most provinces have new home warranty programs, which include
new condominium projects. Warranty programs are put in place
to ensure that new dwellings are properly constructed and
that they meet the construction specifications. Warranty programs
provide for the reporting of defects in, or omissions of,
warrantied elements within specific timeframes. Often, the
developer makes arrangements for independent inspection companies
to audit the condominium, individual units and common elements
within the first year of construction. The developer is responsible
for correcting defects in, or omissions of, warrantied elements
that occur during the warranty period. Should the developer
default on this obligation, the warranty program can provide
funding to correct deficiencies in warrantied elements up
to a specified maximum dollar amount. All of the owners of
new condominiums are expected to cooperate with the new home
warranty inspections and to report any defects or omissions
in their units. You should be aware that new home warranties
do not cover every item that one might construe as a defect.
Be sure you are aware of what the warranty does and does not
cover, and for how long, before making a claim. New home warranties
may also protect the deposit you place on your new condominium,
up to a maximum amount, in case the developer cannot, or will
not complete your unit, through no fault of your own. Check
with your provincial or territorial government to find out
more about the warranty program as program coverage varies
from province to province.
Advantages of buying a new condominium may include:
- A lower purchase price (depending upon market conditions)
- More choice of locations within the building (if applicable)
- A broader range of options and/or upgrades
- Newer buildings have less risk of having to undergo costly,
noisy and intrusive repairs and renovations
- New home warranty protection
Disadvantages of buying a new condominium may include:
- Because construction may not have started, you cannot
“see” what you are buying and must rely on artist
sketches and floor plans (which may change). Be sure to
have the unit’s boundaries, location, finishes, materials,
chattels, etc. clearly specified in the purchase agreement.
- Your initial deposit will be tied up for the duration
of construction.
- Financial institutions may not give you a mortgage on
an unregistered condominium.
- Construction of your unit may not be completed by the
expected date.
- You may move into your unit while construction continues
in others—this can be noisy and disruptive.
Conversion Condominiums
Buying a conversion condominium in the early stages of development
is similar to buying a new condominium. The biggest difference
is that the exterior of the building (or building envelope)
already exists. The majority of the construction project usually
consists of modifications to some of the common property components
and the creation of individual unit spaces. The transfer of
the title of ownership may not take place until after occupancy.
You should check with your provincial government to find out
if the warranty program in your province covers condominium
conversion projects.
Advantages of buying a conversion may include:
- Many of the same advantages of buying a new condominium
apply to conversions, (e.g. choice of unit, opportunities
for upgrades, etc.).
- Some conversions offer unique designs, (e.g. lofts).
- Converted units are often, but not always, somewhat less
expensive than a comparable sized new unit.
- Conversions may be located in established and desirable
parts of cities that are well served by entertainment, educational,
transit and other amenities.
Disadvantages of buying a conversion may include:
- As new home warranty programs may not apply to conversion
condominiums (check with your provincial program), there
may not be construction warranties other than that offered
by the developer.
- The building structure and perhaps some of its internal
components will already be old, which may mean major (hence
costly) repairs may be needed sooner rather than later.
This could be problematic if the condominium corporation
has not had sufficient time to build an adequate reserve
fund. This may have an impact on condominium fees and extraordinary
charges to the unit owners.
- Occupancy dates can be changed due to construction delays.
Existing/Re-Sale Condominiums
One of the advantages of purchasing an existing condominium
is that you get to see the unit, building and grounds before
you make your purchase. You also have the opportunity to meet
other unit owners, speak with the Board of Directors and ask
questions to the property manager. Consider the age of the
building and what repairs have been made and when. Ensure
that the condominium is well maintained and managed. All of
this will provide you with valuable information as to whether
or not the condominium is right for you.
Estoppel/Status Certificates:
When making an offer on a re-sale unit, ensure it is conditional
upon obtaining, and having the time to review, the corporation
documents available to the purchaser under provincial legislation,
including an estoppel or status certificate. There may be
a fee for this certificate, but it will give you the opportunity
to review information including the condominium’s governing
documents, financial statements and insurance coverage. It
is important to thoroughly review these documents, as once
you sign the offer to purchase you are contractually bound
and cannot change your mind if, for example, you later find
out the condominium does not allow pets or requires major
repairs. In Alberta, there are services available to help
you with the review of condominium document packages. In other
provinces you should ask your lawyer or notary to help you
review them. Provincial new home warranty programs do not
protect deposits made when buying a re-sale condominium and
won’t provide protection for construction defects once
the applicable warranty periods have expired. Therefore, it
is important to have the purchase of the unit contingent upon
the satisfactory inspection of the unit and building by a
qualified home inspector, professional engineer or architect.
Advantages of buying a re-sale condominium may include:
- You get what you see.
- There are no lengthy waiting periods before you can move
in unless provided for in the condition of sale.
- Deposits are often much lower for re-sale purchases and
there is no GST.
- You can check out the condominium “community”
in advance to see if the corporation is well run and the
people who live in it are compatible with your needs and
lifestyle.
- Older condominiums can have larger unit sizes.
Disadvantages of buying a re-sale condominium may include:
- Fewer options with regard to choice of unit (within the
building), decorating, or upgrades.
- Older re-sale condominiums may require more maintenance
and repair than new ones.
- The amenities that you may find desirable (e.g. a workout
room or whirlpool, high speed Internet connection, security
features) may not be available.
- Older resale units may not be as energy efficient due
to different construction standards in newer buildings.
- Major repairs may be coming due that will require extra
charges to the unit owners if the reserve fund is underfunded.
- You will only receive the portion of the new home warranty
that has not yet expired.
Your Guide to Ottawa Condos
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