By Howard M. Turk

A "condominium" is a unique form of ownership of real property that combines sole ownership of an individual unit, with ownership in common or shared ownership of common elements within a complex.

Condominiums are governed in Ontario by the Condominium Act, which was enacted in 1967. When you are acting for someone buying a condominium, it is important that you understand the basic legal documents that accompany a condominium. The basic condominium documents include: a description of the condominium corporation in which the unit is located and registered under the Act; the Declaration; the Condominium By-laws; the Estoppel Certificate; and, other documents such as an Insurance Trust Agreement and Management Agreement.

Declaration
The Declaration is one of the most important documents and is also sometimes called the "bible" of the condominium. The Declaration will set out the number of units in the condominium; fully describe the boundaries of the unit; set what areas of the condominium are for exclusive use of the unit owner and which areas are for the general use of all owners; outline common expenses; and deal with the issues of parking and locker spaces (Note: this part should be checked carefully because there are a number of ways that parking and locker spaces can be dealt with in a condominium Declaration).

It is important as a REALTOR that you check to see whether the parking space is separately deeded or not. If it is separately deeded then you should describe it as such in the Agreement of Purchase and Sale.

The Declaration will also define what the common areas are, for example: common hallways, recreational facilities, lobby areas, elevators, etc. The Declaration will also provide for any restrictions in dealing with the unit, which may include restrictions of the uses of the unit such as pets or even the ability of the unit owner to lease out the unit. It is important that you or your client's lawyer review this aspect of the Declaration to make sure that the unit is compatible with the needs of your client. With the onset of buyer brokerage rules, if you are acting for a buyer of a condominium, it is certainly a good idea for you to check whether there are any restrictions on use that would make the unit incompatible with your client's needs.

By-laws
The By-laws of a condominium corporation set out further rules and regulations by which each unit owner is bound. These By-laws should be reviewed carefully by individuals buying condominiums, prior to signing the Agreement of Purchase and Sale, to ensure that they are willing and able to occupy the premises according to the guidelines set out in the By-laws.

Estoppel Certificate
The Estoppel Certificate is an important document which tells you whether the present owner of the condominium unit is in arrears for condominium expenses payments and whether or not there are any claims for liens which have been commenced with respect to common expense arrears. The Estoppel Certificate also sets out the exact amount of the monthly common expenses for the particular unit you are interested in and lets you know when the last payment was made and when the next payment is due. Some REALTORS find it a good practice to get the Estopple Certificate prior to finalizing the Agreement of Purchase and Sale. Certainly this is a good practice if you are a listing agent, as it allows you to provide one more level of comfort for prospective Purchasers. If you are acting for a buyer, it is also a good idea, especially in a situation where you have reason to believe that the unit may be fully encumbered with mortgages.

As seen in Today's REALTOR, February 1997