By: Jayson Schwarz LLM
When you finally make that offer, on paper, for that beautiful new condominium, the sales agent will hand you either a book, often bound, or a pile of different documents and will then tell you that have ten (10) days, to finalise your decision to go through with the sale. There you are with more legal papers then you have ever seen at one time and a huge question, what is all this stuff?
The law requires that the builder provide you with a number of documents in order that you can learn what is really going on with that new condominium before it is too late. They include the Disclosure Statement, and the documents that go with it being; a Budget Statement, a Proposed Declaration, the Proposed By-laws, a Proposed Insurance Trust Agreement, a Proposed Management Agreement, the Proposed Rules and the Proposed Condominium Plans.
The Disclosure Statement gives you a general description of the property, type of condominium, directors and officers, bylaws, rules, declarations, management and insurance trust agreements, conversion and whether Tarion applies, information about the portion of units that the builder intends to market to investors and/or lease, budget information, an amenities schedule of proposed commencement, completion and use dates and a review of all the other documents, as well as fees, charges and more.
What is a Budget Statement? This is a document or series of documents that provide a statement as to the budget for the current year and projected for after you condominium has been registered. This budget is for the year after the unit transfer date.
The Declaration sets out a significant number of the rights, privileges and restrictions that affect the lifestyle of your unit. It will talk about Common Expenses (payment of them, setting up a reserve fund (more later)); Common Elements (using them, restrictions on use and access, modifications and alterations to them, handling pets in common areas); Units (commercial and residential, who, what and how they can be occupied, changes that can and cannot be made, how parking works, how storage units work, and all the rights privileges and restrictions that go along); it deals with Maintenance and Repairs (who is responsible, i.e. you or the condo management, responsibility to each other for damages); Indemnification ( in other words if you messed up you have to protect the condo corp); Insurance (who has to insure what -more next week);and General and Administrative Matters (don’t miss these – all kinds of little things like keys, rights of entry, etc).
The By-Laws are best described as the operating manual for the condominium corporation. The condominium corporation has to run pretty much like any other company and the By-Laws provide for the way that happens. The easy way to demonstrate is to provide a list of some of the multitude of things the By-Laws cover – methods of setting annual and special meetings, how to give notices, quorums, right to vote, method of voting, proxies, duties of cc, powers of cc, election of directors, term of office, how to call meetings, conflict of interest, election of officers, banking arrangements, assessment and collection of common expenses, default and what to do about it, etc
The Insurance Trust Agreement provides for what happens in the event of the destruction of the common elements, ie. parking, pool, elevators, playgrounds, etc.
The Management Agreement establishes the property management group to look after the day to day operations of the condominium and may include maintenance, repairs, security, etc.
The Rules generally concern things like security, safety, visitors, parking, parties, elevators, garbage handling etc.
Ok, you now have a little better idea, I hope, about the various documents and please let me stress how important it is that you read the material provided, within the ten day cooling off period in order that you can make an educated decision.
Good luck and happy home hunting!!!!!!!!!!!!!!!!!!!!!