Condominiums come with their own set of terminology. You may be new to condos or you may have lived in one for 40 years. Here’s a review of the most common terms you may (or may not) have heard before! With the help of CCI, we’ve put together this list:
Board of Directors:
The governing body whose responsibility it is to ensure the smooth running of the Condominium Corporation. The Directors are generally elected by, and from amongst, the unit owners.
One of the governing documents for the Corporation which supplements the Declaration, covering the day-to-day operational aspects of the Condominium, and outlining the responsibilities of the Board of Directors. By-laws can be created or revoked by a majority vote of the owners and must be registered on title.
Refers to all the property of the Condominium excluding the units (e.g. recreational facilities, hallways, elevators, roof, etc.)
Common Element Fees:
A monthly payment made by each unit owner to cover the maintenance of common elements and other common expenses. Also known as a Condominium Fee or Maintenance Fees.
The provincial legislation that creates Condominiums and outlines how they are to be administered.
A type of property ownership, not a style of building. In a Condominium the owners own their units or parcel of tied land (POTL), as well as an interest in the common elements. There are Standard, Common Element, Bare Land/Vacant Land Condominiums and Leasehold Condominiums, depending on the province.
A Condominium Corporation is a legal entity that is created at the time of registration, and whose members are the building owners. The mandate of the Corporation is to manage the property and any other assets of the Corporation, which is done through the election of a Board of Directors.
Generally, the developer of the Condominium Corporation who is the owner of the property before registration of the Declaration and description and who, following registration, is also the owner of the individual units prior to their sale.
One of the governing documents of the Condominium Corporation, functioning as the equivalent of its constitution. It must be filed with the description to create the Condominium Corporation.
A pictorial record like a plan of survey of the Condominium setting out the boundaries of the units, common elements and exclusive use common elements. It includes architectural and structural plans, along with certificates of qualified professionals.
Exclusive use common elements are common elements used exclusively by one (or more) designated owners such as balconies and terraces. In some cases, underground parking spaces are exclusive use common elements, meaning only the person assigned to that space can use it, but it is the responsibility of the Corporation to maintain the whole garage.
A performance audit identifies deficiencies that the performance auditor believes should have warranty coverage under the terms of the Ontario Home Warranties Plan Act. The auditor compares the as-built condition against applicable codes and the building design documents. In the first year of operation, it is a requirement for any Corporation with at least one residential unit to engage the services of a qualified independent expert to perform the performance audit. The audit must be completed and filed with Tarion before the Corporation’s first year anniversary of registration.
The Condominium Corporation must establish and maintain at least one reserve fund. The reserve fund can only be spent for the purpose of major repair and replacement of the common elements and assets of the Corporation. The Corporation collects contributions from the owners as a part of the owners’ monthly fees to the Corporation.
Reserve Fund Study:
A study that recommends the contributions to be collected from owners to adequately fund the cost of future major repairs and replacement of the common elements and assets. A reserve fund study will include an inspection, by qualified persons, of the common element areas, and dialogue with the Board of Directors and Property Management. Most Corporations follow one of the cash flows recommended on the reserve fund study. You can have 3 different classes of studies.
One of the governing documents of a Condominium Corporation, passed by the Board of Directors and generally relating to the appropriate use to be made of the common elements and units by owners, tenants and others. Also referred to as Common Element Rules.
A fee paid by all owners to cover extraordinary expenditures when the Corporation does not have enough funds.
A written statement that prospective purchasers of a resale unit should request, which contains pertinent information that may influence the closing of a real estate or financing transaction. Also referred to as an estoppel.