What is a Condominium?

The word ‘condominium’ refers to a form of property ownership that is made of two fundamental parts:

1.Individual units – the suites themselves, and any or all parts of the property available for individual ownership and title transfer, plus

2.Common elements – any part of the property that is not a unit element, which is owned by all of the unit owners as tenants in common.

Together they comprise the condominium property, which is governed by a Condominium Corporation created to manage the affairs of the property. Control over the Condominium Corporation is jointly held by the “shareholders” or owners of the individual suites and is led by a Board of Directors which is elected by the owners.

A condominium’s affairs are regulated by the Condominium Act, 1998, and documents known as the Declaration, Description, By-laws, and Rules.

What are the common elements?

Common elements are those parts of the condominium development that are outside the boundaries of the individual units.

Common elements may include, but are not limited to parks; roads and landscaping – gardens, lawns, and trees; the elevators; corridors; lobbies; parking areas; garage; onsite mail room; plus entertainment, recreation and/or fitness facilities.

Other common elements include the mechanical and electrical systems and structural parts of buildings. The maintenance and repair are typically the responsibility of the Condominium Corporation.

What are exclusive use common elements?

Exclusive use common elements are those common elements of a building to which ONLY the unit owner or owners have exclusive use. The most obvious are balconies, terraces, patios, backyards, a parking spot or locker. Dependent on what is provided in the condominium’s Declaration, exclusive use common elements may be maintained or repaired by either the owner or owners who have their exclusive use or the condominium corporation.

As a rule of thumb, any feature that is within a suite is owned by that unit, unless stated otherwise in the Declaration.

What are monthly common maintenance fees/expenses?

Also referred to as Common Area Expenses, Maintenance fees are a monthly charge (your proportionate share) for the utilities, regular upkeep, management, administration, reserve fund contribution and insurance for the common element areas. The fees vary according to the project and the size of the unit.

Each homeowner’s portion of these expenses is set out in the Budget Statement, which lists the percentage for which each unit is responsible. The Condominium Property Manager runs the day-to-day operations and uses the funds collected to pay for the common operating expenses of the condominium.

What is an annual budget?

Each fiscal year, the Board of Directors approves a budget that is prepared by management and is based upon expected revenues and expenditures for the next 12 months.

What is a reserve fund?

A Reserve Fund is a separate trust account which all Condominium Corporations are required to establish. A portion of the Common Expenses paid by the owners is transferred monthly to this account. The Reserve Fund is the unit owners’ savings for the major repair and replacement costs of the Common Elements which occur as a building gets older.

What is a reserve fund study?

The contributions made to the Reserve Fund must be based on a Reserve Fund Study which establishes the amount the Board of Directors must ensure is contributed. Under the Condominium Act, all Condominium Corporations must carry out a reserve fund study by a qualified professional every 3 years.