Buying a new condo: part 2

When selling a unit, the developer must provide the purchaser with a disclosure statement, which must have a table of contents and contain specific information concerning the unit and project including:

• General description of the property (see above).
• The number of units the developer intends to lease.
• The estimated completion date for the construction of amenities.
• A copy of the proposed declaration and by-laws.

This table of contents helps purchasers find information quickly and easily in the declaration (see definition above), by-laws, rules or disclosure statement about such things as whether a building on the property has been converted from a previous use or whether the building has any restrictions on pets. Purchasers are encouraged to review the purchase agreement and the disclosure document carefully with an experienced condominium lawyer before the end of the 10-day cancellation period.

Purchasers will want to look closely at the types of facilities and services that are offered. The Ontario Human Rights Commission has ruled that adult-only buildings discriminate against families. However, some condos do aim to meet the specialized needs of families with small children, for example, by providing playgrounds. Others may be built with seniors in mind.

Reserve Fund

The corporation is required to establish a reserve fund for the major repair and replacement of common elements including the roof, exterior of the building, roads, sidewalks, sewers, heating, electrical, plumbing, elevators, laundry and recreational facilities.

Before any of the reserve fund is spent, the corporation must ensure a professional (e.g. architect, engineer) conducts a reserve fund study. The corporation is required to conduct studies at periodic intervals to ensure that the fund is adequate. The act stipulates that a qualified person, such as an architect or engineer, must conduct the study.

A physical site inspection must be done to provide an estimate of the expected life of the major components of the corporation, together with an estimate of the replacement cost of each component. This study shall be presented to the board. Within 120 days of receiving the reserve fund study, the board shall propose a plan for future funding so that the fund will be adequate to meet the requirements of the study.

Within 15 days of proposing the plan, the board shall send a notice to the owners containing a summary of the plan and areas, if any, where the proposed plan differs from the study. The board shall implement the plan 30 days after sending the notice to the owners. New condominiums must complete a study within one year of registration and the fund must be fully funded by the end of the following fiscal year.