What Kind of Home Ownership Do I Want?
Jayson Schwarz for The Lawyers Weekly
Canadian consumers are constantly barraged by media displays of many different kinds of home ownership opportunities; experienced real estate lawyers can shed light on the realities of owning a home. Most people do not understand all the options that are out there.
Condominium Ownership in Canada
We all think of condominiums as high rise apartments. This is no longer true. Condominiums can include townhouses, of all shapes, sizes and heights, semi-detached or detached units and can be industrial, commercial or residential. In Canada, condominiums can also take the form of common element condominiums (i.e. a number of homeowners sharing a swimming pool, a common road or park), phased condominium corporations, vacant land condominiums or leasehold condominiums. Condominiums are created as, among other things, a means of consumer protection by the imposition of certain time, disclosure requirements on the purchase and sale of new condominiums and as a means of sharing common costs.
In a condominium you will pay a monthly fee that includes everything from contributions to a reserve fund, taxes, insurance, heat, hydro, television and maintenance. This amount can vary from year to year as the cost of running the building increases or decreases.
The operation of a Canadian condominium is carried out by an elected board of directors who operate the condominium corporation and these people decide on how things will run. As an example there may be bylaws or rules setting out the fact that there can be no pets in the units. In a condominium in Canada, you individually own your unit by deed and jointly through your proportionate share, the common elements (pools, tennis courts, hallways, elevators, etc.).
A condominium purchase in Ontario is protected and regulated under the provincial Condominium Act. Two of the big protections you should be aware of that do not apply to the other forms of ownership are the "10 day cooling off period" and "excess deposit protection". Sec 73(2) of the Condominium Act says that you may rescind the Agreement provided you give notice to the Builder within 10 days of the later of receipt of the Disclosure statement and the date you receive a copy of the Agreement of Purchase and Sale signed by the Builder. In other words all you have to do is send a letter to the Builder within the 10 days saying "I rescind my offer" and the builder will cancel the deal and refund your deposit. Deposits are protected by Tarion. everything after that is protected if it is paid to the Builder's lawyers.
These 2 protections are NOT available through other forms of home ownership.
Co-operative Ownership in Canada
Another form of ownership available in Canada is buying into a "Co-op". Co-ops cannot be looked at in the same way as condominiums as there is no real direct real estate ownership.
In this circumstance a corporation or trustee owns the property and you buy a share. You live in your unit, in effect as a tenant, generally with a lease or license for exclusive possession. In Canada, it runs similarly to a condominium in the sense that a board of directors elected by the co-operative members decide on how the facility will operate. The monthly fees however may include the cost of the underlying blanket mortgage and other costs. (a blanket mortgage is the mortgage covering or blanketing the entire property usually used to originally build the buildings)
This is the way that generally our parents and grandparents purchased their homes in Canada. This is the old fashioned "my home is my castle" concept. You are the King or Queen of your domain and what you do with your property is your choice. Insurance, heat, hydro, property tax, maintenance, etc. are your personal responsibility and you deal with them, as you deem necessary. In Canada, this is called ownership in fee simple and the land and structure are yours and everything related thereto, your responsibility. In other words you cut your own grass and take out your own garbage.
Jayson Schwarz is a lawyer with Schwarz Gillen LLP.
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