Q. What is a disclosure statement and how important is it regarding my new condo purchase? There is so much to learn and I don’t want to make any mistakes when making my final decision.
A. The purpose and contents of a disclosure statement are set out in Section 72(1) of the Condominium Act. This statement is essential and your sale is not binding without it.
The contents will inform you if the condo is freehold or leasehold, describe the property and amenities, tell you whether the project is new or converted from another use, if any units will be for commercial use, whether the developer intends to sell blocks of units to investors and the proportion of units the developer intends to lease, and restrictions on pets.
Also copies of the existing or proposed declaration, bylaws and an insurance trust agreement will be included, as well as a copy of the budget and other financial details.
If recreational or other facilities are not completed, the statement will inform you the schedule for completion. It will list the facilities and services the developer will provide during the period of interim occupancy, which is the period of time between you actually moving into the condo unit and the registration of the condo corporation.
It’s imperative that you go over the disclosure statement with your lawyer in order for you to make a well-informed decision. Ask all the questions you can and don’t assume anything. In order to avoid any unexpected disappointments you must research the condo before you buy, not after.
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Q. We are going to buy our first condo. Can you tell us what part of the condo belongs to us and what part belongs to the condominium corporation?
A. Each condo property is a little different. You will need to review the condominium’s registered description to find out what is included in your unit and what parts are common elements.
Private back yards and balconies are usually considered common elements, but are called exclusive-use common elements, because they are for the exclusive use of a particular unit owner. As well, there are obligations to maintain and repair parts of the units and the common elements outlined in the condominium documents.
In order to avoid any unexpected surprises or disappointments, do your homework prior to choosing your first condo. Buying a condominium is completely different then buying any other type of property. You will definitely require the assistance of a good real estate lawyer to review all your documents prior to signing on the dotting line.