Tag Archives: agreement of purchase and sale
by Denise Lash
Karen and John have just bought their first condominium townhome. When they began searching, their main concern was with the location and the look of the home. They hadn’t really considered the legal issues and obligations surrounding their purchase.
It was only after signing the Agreement of Purchase and Sale that Karen and John started thinking about what they had bought. They were surprised to find that condos differ greatly from freehold townhomes.
Here are just a few of those differences:
â€¢ The purchase involves two stages of closing. First is the occupancy closing (or possession date), when the municipality approves occupancy. Not everything in the building may be completed at this point, and Karen and John may have to move in regardless of any deficiencies or unfinished items. The second (or final) closing occurs after the registration of the description and the creation of the condo corporation.
â€¢ During the occupancy period (prior to the final closing), Karen and John must pay an occupancy feeâ€”similar to rent.
â€¢ Upon final closing, Karen and John must pay monthly condo fees. These expenses are based on an annual budget and are subject to change with no restrictions on increases. The fees are in the hands of the board of directors of the condo corporation.
â€¢ Karen and John were surprised to learn that they needed different insurance coverage than what is required for a freehold home.
â€¢ The couple is required to maintain upkeep on portions of their home, including the back and front yards. Each condo corporation contains different maintenance and repair obligations.
â€¢ The townhome documentation places restrictions on altering or adding anything to the exterior of the building. Karen and John won’t be able to change a mailbox or exterior light fixture, re-landscape, or install a screen door without getting prior approval. There are also prohibitions on erecting fences, pools, hot tubs, decks, and satellite dishes.
â€¢ The documentation outlines rules on the use of the home, including what kinds of pets are allowed and prohibitions on skate boarding, hockey playing, rollerblading, and basketball playing on the driveway.
â€¢ The couple had no idea that, as owners, they would be involved with annual general meetings, voting and elections, budgets, financial statements, and other corporate matters.
Karen and John wish they had known these things before purchasing. It would have made a difference. At least now they’re prepared for their new life as condo owners, and this preparation will assist them with a smoother transition into the condo lifestyle.
Denise Lash is a condo lawyer with Miller Thomson LLP and the host of the television program MondoCondo. Visit www.torontocondoshow.com.
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