The following general information is intended for the purchase of a condominium unit.
A
Condominium is similar to a house in that your ownership is evidenced
by a
"title" for the condominium unit.
However, with a house, your
title includes ownership of the land
whereas
with a condominium, the land and the building "shell" are owned by a
Condominium Corporation under a separate title called the "Master
Title".
As an owner of a unit, you
become a shareholder in the Corporation.
As a shareholder, you have a
certain amount of say in how the
Condominium is administered.
As with
any Corporation, you delegate much of your authority to a Board of
Directors
for which you vote.
The
fundamental rules for the running of a Condominium are found in the
Condominium
Act of Manitoba.
More specific rules,
requirements and provisions relating to your particular condominium are
found
in the Condominium Declaration, Condominium By-laws, Rules and
Regulations,
Management Agreement and Insurance Trust Agreement.
These documents are often
lengthy and sometimes difficult to
obtain.
If you are purchasing the
unit
with cash, you do not, strictly speaking, require the documents, unless
for
your own information.
However, if you
are mortgaging the property, many Lenders require some or all of these
documents for lending purposes.
If such
documents are required, you should obtain them or, alternatively,
advise us to
do so on your behalf.
Most Condominium
Corporations or management companies charge a fee for providing these documents,
the usual range being $50.00 to
$70.00.
Please note also, that we do
not review or render any opinion with respect to these documents. The
time for such review would be prior to
or at the time of making an Offer to Purchase.
Certain
provinces and some U.S. states have a "deed" system.
In Manitoba, ownership is
evidenced by a
certificate of title.
The
"title" system has certain advantages, primarily that the government
certifies accuracy of the title thereby eliminating the necessity of
title
insurance.
Unfortunately, this system
involves processing time by the Land Titles Office and creates delays
in
document registration and issue of your new title, of 2 - 4 weeks.
Title Description
You
must decide and advise our office as to the manner in which you wish to
take
title.
We need the full legal names
of
all persons who wish to be on title.
Most
married couples take title as "joint tenants". Joint
tenants have what is called a right of
survivorship, which means that upon the death of one of the parties,
ownership
passes to the surviving joint tenant.
Another form of co-ownership
called "tenants in common" is
available, and may be preferred by persons buying property for business
reasons.
Tenants in common do not have
a right of survivorship.
On occasion,
it may be desirable for a married couple to take title in only one
person's
name in order to protect the home from creditors of the other. We
will discuss these issues further at your
request.
Possession
and Keys
While
there is some disagreement among lawyers and Realtors as to what time
of day a
purchaser is entitled to take possession, it is generally accepted that
the
seller can move out on the day of possession.
As a result, you should
arrange for movers, deliveries, etc., to
arrive
at a time when you know the home will be vacant. The
practical thing to do is speak to the seller directly
regarding his or her moving plans. If
you wish to change the possession date, and the seller is agreeable,
please
advise us of the new date and we will make the necessary arrangements
with the
seller's lawyer.
The
exchange of keys does not follow any definite pattern.
Sometimes keys are exchanged
through the
lawyers, sometimes through real estate agents, and sometimes between
the seller
and buyer directly.
If you have not
arranged for the exchange of keys directly form the seller by the time
you
attend at our office for closing, we will endeavour to obtain the keys
for you.
If
you are purchasing a previously occupied unit, you may wish to change
the locks
on the door as there is no way to ensure that all existing keys will be
provided to you.
Contingency
(reserve) fund / Common element fund
Most
Condominiums maintain two types of funds which unit holders must
contribute to.
(a)
Contingency or Reserve Fund
This
is a "savings account" which owners pay into for a rainy day. Its
purpose is to cover unusual or one-time
expenses (e.g. roof repair, installation of satellite dish, etc.). Usually,
there is a credit balance in this
fund and you will have to reimburse the amount of such credit unless
your Offer
to Purchase indicates otherwise. This
"adjustment" to the price will increase the amount of funds required
on possession.
You will then pay into
the contingency fund on a monthly basis, or otherwise until the fund
reaches a
level as determined by the Condominium Corporation.
(b)
Common Element Fund
This
is a fund which is used to pay recurring monthly expenses and general
upkeep and
maintenance (e.g. snow removal, cleaning costs, utilities, etc.). Generally,
there is only a small balance in
this fund and no adjustment is made in favour of the seller except when
possession falls on a date other than the first of the month. In
this case you will reimburse the seller
for the portion of the month from possession date to the end of the
month as
the seller will have paid the fee until the end of the month. Common
element fee are paid on a monthly
basis.
Insurance
While
there is existing insurance on the Condominium "shell", you are
required to arrange your own coverage for interior improvements and
contents.
Do it well in advance of
possession date.
Coverage must be
effective as of the date you expect to receive keys.
If
there is to be a mortgage on your unit, you must ensure that the amount
of
coverage is at least as high as required by the mortgage lender. "Loss
Payable" must be made in
favour of the mortgage lender, so be sure to provide your insurance
agent with
the full name and address of your mortgage lender.
Written confirmation of
insurance coverage should be sent to our
office prior to possession.
Utilities
Utilities
should be arranged by you, and in order to assist we provide the
following
telephone numbers for you to call. You
will receive further instructions upon calling each utility.
Centra
Gas Company.
947-2000
Hydro (central
Winnipeg)
986-2344
Manitoba
Hydro (rural and suburban Wpg.)
474-3311
City
of Winnipeg Waterworks
986-5858
Closing Appointment
You
should call our office no later than two weeks before possession date
to set up
our closing appointment.
The closing
appointment should be scheduled to take place at least two working days
before
the date you expect to receive keys. At
that time you will sign such documents as may be required, and will
remit the
funds which are required to close the purchase transaction.
Funds
The
funds which you will remit upon your closing appointment will consist
of the
balance of your downpayment together with all applicable adjustments
and
closing costs.
We will estimate this
amount once we have received the necessary information and will advise
you of
the amount prior to possession date.
We
have enclosed an explanation of closing costs and adjustments. It
is useful but not essential for you to
understand how the various adjustments and closing costs work, as we
will do
all the necessary calculations.
It is
important however, for you to have a rough idea of how much money you
will need
and to have sufficient funds available as of possession.
If you have any reservations
at all or feel
you need further explanation, we strongly recommend you make an
appointment
with our office immediately, and we will take you through a detailed
analysis
of adjustments and closing costs. There
is no extra charge for this interview.
The
funds which you remit at your closing appointment will be an estimated
amount.
Final figures will be
available
only upon completion of Land Titles Office registrations and may result
in
either a refund to you or a balance owing to our office.
The
funds which you remit must be in the form of a CERTIFIED
CHEQUE or
BANK
DRAFT payable to Timothy A. Martin, Barrister and Solicitor.
Final Report on Title
Upon
completion of Land Titles registrations and the payment of all funds
required,
we will provide our final report to you.
The final report consists of
a 4 - 5 page letter which
summarizes the
transaction, accompanied by copies of various documents.
It is important that you
retain it in
safekeeping for future reference. You
should expect to receive the final report between one and two months
after
possession date.
Summary
To
summarize, you must do the following things prior to receiving keys and
possession:
1.
Arrange Unit Insurance, and
ask the agent to send us
confirmation;
2.
Attend our office to:
a)
Provide your certified cheque
or bank draft;
b)
Sign all required documents.
Remember
that you will not
receive keys at the time you bring in your
funds and
sign documents, but rather only after we have courier funds and our
trust
condition letter to the seller's lawyer.
That is why we ask that you
attend at least a couple of days
before you
expect to receive possession.
Your Next Step
Thank
you for reading the foregoing.
If you
have not done so, we would ask that you call our office to confirm how
you wish
your name to appear on title and to provide certain information we
require.
From the desk of Timothy A. Martin, Barrister and Solicitor