CO-OWNERSHIP VERSUS CONDOMINUMS
By Martin K. I. Rumack
Condominiums and Co-ownerships are legal structures that define both the exclusive rights and the shared rights of individuals who purchase a unit/percentage interest in buildings created as one of these types of legal entity.
IMPORTANT FEATURES OF CONDOMINIUMS AND CO-OWNERSHIPS FOR THE PURCHASER
CO-OWNERSHIP
Purchaser acquires ownership of a percentage interest in the Co-ownership Corporation by a Deed.
Purchaser acquires exclusive right to occupy a specific unit through a registered Co-Ownership Agreement and the provisions of the Co-ownership Agreement.
Purchaser acquires ownership of a percentage interest in the common areas of the building.
Purchaser becomes a member of the Co-ownership Corporation which:
(a) manages the affairs of the building according to the Co-ownership Agreement, the Corporation’s By-laws and/or private Contracts, and the Rules and Regulations; and,
(b) represents the interest of the Percentage Interest owned.
Purchaser can individually finance her/his own unit, using their shares and interest in the unit. A limited number of lending institutions finance these types of purchases of shares and/or grant mortgages on these types of properties.
Purchaser pays for their percentage share of property taxes as a part of their monthly common expenses. The Co-ownership Building is assessed and taxed as one structure.
Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of the common expenses.
No legislation requiring a Capital Reserve Fund, but Co-ownership Agreement may require a Capital Reserve Fund to be established for maintenance of building. No legislation exists requiring or outlining requirements for a Reserve Fund Study. No legislation exists requiring compliance with the recommendations of a Reserve Fund Study.
Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a member at Annual General Meetings.
Purchaser is subject to the Co-ownership Agreement, Rules and Regulations, and By-laws and other contractual documentation of the Co-ownership Corporation.
Purchaser does not need consent of the other co-owners or Co-ownership Corporation to sell, rent or mortgage his/her unit. There is the odd exception.
Purchase of unit should be subject to receipt of an Estoppel Certificate which identifies any outstanding or pending payments, special assessments, or legal actions, re: the unit or corporation, amongst other items together with all other documents included.
Co-ownerships may have yearly audited Financial Reports issued to all owners and are managed by a professional Management Company Or self-managed.
CONDOMINIUMS
Purchaser acquires ownership of an individual unit by a Deed.
Purchaser acquires ownership to individual unit by a Deed pursuant
to provisions of The Condominium Act.
Purchaser acquires a percentage interest in the common areas of the building.
Purchaser becomes a member of the Condominium Corporation which:
(a) manages the affairs of the building according to the Condominium Act, and more particularly the Declaration, the By-laws, and the Rules and Regulations; and,
(b) represents the interests of the Owners.
Purchaser can individually finance her/his own unit. Large number of lending institutions finance purchases of condominiums and/or grant loans on these types of units.
Purchaser receives an individual property tax bill.
Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of common expenses.
Condominium Act requires a reserve monetary fund to be established for maintenance of building. Most comply with the provisions of the Act and generally with the Reserve Fund Study. Study must be updated every 3 years.
Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a member of the Condominium Corporation at Annual General Meetings.
Purchaser is subject to the Declaration, Rules and Regulations, and By-laws of the Condominium Corporation.
Purchaser does not need consent of the other owners or the Condominium Corporation to sell, rent or mortgage his/her unit.
Purchase of a unit should be subject to receipt of a Status Certificate which identifies any outstanding or pending payments, special assessments, or legal actions, re: the unit or corporation, amongst other items together with all other documents required to be included.
Condominium Corporations must have yearly audited Financial Reports issued to all owners and are almost always managed by a professional Management Company.