Knowledge is power- Closing Costs

Closing Costs

Mortgage Term

Over the course of your amortization period, you may have many different mortgages. The term is simply the length of time that interest rates, payment schedules and obligations to the lender exist. When the term comes to a close, you will have the option to renew your mortgage at your current or new lending institution. You can also put a lump sum toward the principal without restriction, or pay off your entire mortgage without penalty. If you wish to change the structure of your agreement during the term you may have to pay a substantial fee to the lender. 

Choosing Security or Flexibility

Mortgages are available with closed, open and convertible options, with fixed or variable rates. The options you choose will reflect your beliefs about the market -- is it going up or down? -- and your short-term goals and desire for long-term security.

 
Amortization This is the amount of time over which the entire debt will be repaid. Most mortgages are amortized over 15-, 20-, or 25-year periods. The longer the amortization, the lower your scheduled mortgage payments, but the more interest you pay in the long run.

Open Mortgage This type of mortgage offers a great deal of flexibility, as it can be repaid in part or full at any time without penalty. This is a great mortgage if you believe interest rates are moving down or if you plan to move in the near future. The term may be limited to six months or one year.

 
Closed Mortgage Here the interest rate is fixed for the full term of the mortgage, and you will have to pay a penalty to change the agreement conditions. This type of mortgage is ideal for buyers who suspect that interest rates will rise and who are not planning to move in the near future. This type of mortgage is usually available in a wide variety of terms.

 
Convertible Mortgage With this mortgage, you'll enjoy the same peace of mind as a closed mortgage, plus the flexibility to convert to a longer closed mortgage at any time without penalty. If you think rates will drop, this will allow you to wait until you feel they have hit bottom, or if rates rise, you can lock in.

 
Additional Costs Before you calculate the amount of your down payment and determine what you can afford, it's a good idea to set aside a few thousand dollars to cover the extra costs that seem to spring out of nowhere. Here is an overview of costs you could encounter. The good news is that not all of them will apply.

 
Property Taxes If the Vendor has paid a portion of the taxes in advance, you will be responsible for reimbursing the Vendor on closing. Plus, if you have a high-ratio mortgage, your lender may require that you have your property taxes added to your mortgage payments.

 
Utility Fees Utility fees are calculated through a meter so you will be responsible for paying what you have used up on the meter. 

Survey Fee Your lender will require an up-to-date survey. You can make it a condition of the Offer to Purchase that the Vendor provide a survey, or you will have to have one done. If there is no survey available, you may purchase "Title Insurance" in lieu of a survey which saves you about $500 - 700.

 
Appraisal Fee A basic appraisal usually costs under $250.

 
Property Insurance Your lender will insist that you have insurance on your property because your home is used as security for the mortgage.

 
Service Charges You'll be charged for telephone, cable and a variety of other services that you hook up at your new home.

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Lawyer (Notary) Fees Each real estate transaction requires the assistance of a legal professional to review the Offer to Purchase, search the title, draw up the mortgage documents and take care of the details on the day of closing. Lawyers fees range widely depending on the complexity of the transaction. Ask your sales representative to recommend a lawyer. And remember, fees can be negotiated.

 
Mortgage Loan Insurance Premium and Application Fee Mortgage loan insurance will be necessary if you have a high-ratio mortgage (less that 20% down payment). The application usually costs $75 with a valid appraisal, otherwise it's $235. The actual insurance premium will range from .5% to 3.75% of the purchase price and is added onto the mortgage.

 
Mortgage Broker Fee Some brokers may charge as much as 2% of the total mortgage to find you a lender. In most cases though, the broker is paid by the lender. Buyers with good credit should not have to pay a fee.

 
Moving Costs Whether you've decided to do it yourself or hire a moving company, now is the time to budget for the costs involved.

 
Status Certificate If you're moving into a condominium (complex not necessarily a high-rise) this certificate outlines the condominium corporation's financial and legal state. It will cost you up to $100, usually paid for by the seller if agreed to in the Offer to Purchase.

 
Condominium Fees These monthly fees vary from complex to complex. The fees are applied to everything from grounds keeping and carpet cleaning to security personnel and health club maintenance. Depending on the type of structure, these fees will usually be a few hundred dollars.

 
Home Inspection Fee For around $300, depending on the size of your home, you'll receive a complete written report about the condition of the structure. Do your research and hire a reputable firm.

 
Renovation and Repairs Your home inspection may indicate the need for some general repairs or a major project. Have some money set aside, particularly if you are purchasing an older home. 
Redecoration Your taste will be different from the previous owner. Set aside money to paint and wallpaper. Prepare a list of things you can live with, for now, and decorating faux pas that need immediate alteration.

 
Water Quality Certification If you are purchasing a home with a well, you'll want to ensure the quality of the water. This will cost approximately $50 to $100.

Land Transfer Tax

Buyers in most areas will have to add Land Transfer Taxes to their closing costs.

 
Land transfer taxes are a part of the process unless you live in Alberta, Saskatchewan, or rural Nova Scotia. These taxes, levied on properties that are changing hands, are the responsibility of the buyer. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property.

 
Many provinces have multi-tiered taxation systems that can sometimes be difficult to understand. If you buy a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00. 

The following chart illustrates Land Transfer Taxes  

Ontario

Up to $55,000 X .5 % of total property value 

From $55,000 to $250,000 X 1 % of total property value

From $250,000 to $400,000 X 1.5 % of total property value

From $400,000 up X 2 % of total property value 

Where are Interest Rates Going?

Why Canadians can expect low interest rates for longer — much longer: Morgan Stanley

Weaker growth will be driven by further cuts to spending and production in the energy sector, which has already reduced capex plans by an average of 20% year over year.
Morgan Stanley says the central bank will have no choice, but to cut its forecast next week when it releases its monetary policy report, a move that will further pressure on Canada’s struggling currency.
The bank said it expects the loonie to fall to 80¢ US in coming months as currency markets fully price in the second round of effects of lower oil prices.

Morgan Stanley said it expects the loonie to fall to 80¢ US in coming months as currency markets fully price in the second round of effects of lower oil prices.

Don’t look for another interest rate hike for two more years; in fact, there is a one in three chance the Bank of Canada will actually cut rates before the end of this year, Morgan Stanley predicts.
The latest forecaster to take a stab at the impact of plunging oil prices on Canada’s economy, the American bank stands out for its bearish take.
The bank not only pushed its forecast for the first rate hike to 2017, it predicted others would soon follow suit.
“The fall in oil is undisputedly negative for Canada’s economy,” the bank wrote in its report Wednesday “Canada Outlook: Sands through the hourglass.”
“Rate differentials should continue to move against Canada, if, as we expect, the market pushes out expectations for tightening from the Bank of Canada into 2017, reflecting a later closing of the output gap.”
Until Tuesday, most economists have expected a rate increase in late 2015. But dovish comments by Bank of Canada Deputy Governor Timothy Lane, led some to reconsider. BMO Capital Markets, which has cut its 2015 growth forecast to 2.1% from 2.5%, said Wednesday it was now looking for the next interest rate hike to come in January 2016.

Why the Bank of Canada won't be rescuing the economy from low oil prices

Terence Corcoran: There’s very little that governments or the Bank can, or even should, do. The real rescue operation for the economy will come from elsewhere. Read on

Oil prices that have fallen by about 60% since June are threatening economies that depend on commodities exports. Wednesday, Brent crude fell to US$46.49, while WTI was trading at $46.04. A steep spike sent prices up more than 6% to around $48, but analysts doubted it would last.
On the back of plunging prices, Morgan Stanley has cut its forecast for economic growth 0.6 percentage points to 1.8% for 2015 and sees the malaise stretching into 2016, where it expects growth to slow to 1.5%, down almost a percentage point from its previous forecast.
That compares to the Bank of Canada’s October outlook which saw the economy gaining 2.5% in 2015 and 2.3% in 2016.

Weaker growth will be driven by further cuts to spending and production in the energy sector, which has already reduced capex plans by an average of 20% year over year.
Morgan Stanley says the central bank will have no choice, but to cut its forecast next week when it releases its monetary policy report, a move that will further pressure on Canada’s struggling currency.
The bank said it expects the loonie to fall to 80¢ US in coming months as currency markets fully price in the second round of effects of lower oil prices.

Source:  Financial Post

JULY NEWSLETTER

June Newsletter

7 questions to ask when choosing a home inspector

That "perfect" four-bedroom, two-bath house you stumbled upon in a beautiful suburban neighborhood could hide some serious problems. The best way for homebuyers to find out about potential issues is with a good home inspection.
In fact, you'll have to get a home inspection to meet mortgage lenders' requirements before you buy. But not all licensed inspectors will thoroughly inspect and report on your potential home's defects.
So before you hire the first home inspector you find on Google or whoever your Realtor or lender suggests, do your homework. It's acceptable to interview a home inspector before you decide to drop $300 or more on the inspection fee.

Here are the seven most important questions to ask before you schedule a home inspection:

1. Are you a member of a professional inspection organization?
Reputable home inspectors will be members of one of these organizations: the National Association of Home Inspectors, the American Society of Home Inspectors or the International Association of Certified Home Inspectors. Many states also have statewide associations, which are acceptable alternatives.
Each organization has certification and licensing procedures and requires members to follow procedural and ethical standards when conducting home inspections. Membership to one of these organizations doesn't guarantee a home inspector is an expert, but you should probably rule out any inspectors who aren't members of a respected professional organization.

2. What's your background?
The best home inspectors are typically those who have experience in the building industry. You want to work with an inspector who knows what's inside the walls of your home and understands the basics of local building codes and requirements. (Note: A home inspector will not be able to tell you if every single plumbing, electrical and/or structural aspect of your potential home is up to the latest codes. For this, you'll need a more specialized inspection by a licensed plumber, electrician or contractor.)
Background is especially important if you're planning to purchase an older home, as inspectors may need to look for problems in older homes that are uncommon in newer properties. So if you're buying an older home -- or a fixer-upper -- find an inspector with a background in inspecting similar homes.

3. How much experience do you have?
It's OK to work with a rookie home inspector who has a background in construction or home repair. But be sure you hire someone who has, at the very least, undergone extensive training -- or who will have the assistance of a more experienced inspector during the inspection.

4. How long will the inspection take?
On average, a home inspection should take two to three hours to perform. If you're dealing with a large home, a fixer-upper or an older home, the inspection should take even longer. Don't hire someone who promises to be in and out within an hour or two, as this is too short a time to thoroughly inspect a home.

5. What will you inspect?
Keep in mind that it's not a home inspector's job to inspect things that can't be seen. The inspection won't reveal any wiring problems hidden behind drywall or any mold problems under the shower tiles.
With that said, an inspector should evaluate every possible visible place in your home, including the roof, basement and attic. And the home inspector should be in physical shape to access these places, even if a ladder or flashlight is required.
An inspector should also look at things such as the water heater, furnace and electrical box. Again, the inspector may be unable to tell you if your home's systems are up to local codes. But the professional should have enough knowledge to inform you if the systems are safe or in need of major repairs.

6. Can I attend the inspection?
A refusal to this simple request is a red flag. A home inspection is a fabulous opportunity to learn about your home and talk about any possible repairs that may be needed. A good inspector will take you along on the inspection, if you wish. A great inspector will talk you through everything he sees.

7. What kind of inspection report do you offer?
Most inspectors will provide a report within 24 hours. It's important to be sure the inspector's reporting style will meet the requirements of your lender as well as your own personal preferences. Ask to see samples of their previous home inspections if you aren't sure.
Of course, you'll also want to ask about the inspector's fees and schedule. But before you get to those, find the right inspector by asking these seven questions.

Source:
Abby Hayes

Everything you need to know when buying a condominium

Location isn’t the only thing to consider when buying a condo. Buyers should look at things like the financial health of the condo corporation, the amenities, the maintenance of the common areas and the community rules. Buyers also need to understand the fees that come with living in a condo.  

Condominium Fees

Buying a condo means you must be aware of 2 key expenses:

• monthly common expense fees (condo fees)
• special assessments

Monthly Common Expense Fees

Monthly common expense fees (condo fees) cover the costs of keeping common elements in good repair. They also cover the operating costs of things like fitness facilities, party rooms and swimming pools. 

If the condominium has staff, like security, cleaners and concierge, these costs will be covered by monthly condo fees.

Monthly fees may cover all, some or none of the costs of your utilities. Condo buyers need to make sure they know:

• what services are and are not included in the monthly condo fees
• if they need to pay certain costs in advance
• what is included in the monthly operating costs (e.g. utilities, legal fees, property management services and landscaping)

The condominium declaration shows (in percentages) how much each unit must pay in monthly condo fees. Although it is not required by law, condo fee percentages are usually calculated by the size of a unit. For example, owners of a three-bedroom condo typically pay a higher monthly condo fee than owners of a one-bedroom condo.

You are responsible for paying your condo fees. They are your share of the operating expenses of the condo corporation.

Increases can happen at any time and for a number of reasons, like an unexpected major repair, a lawsuit involving the corporation, or just to keep up with rising costs.

These increases tend to occur when the annual budget is set by the board of directors. Check when the last increase took place to help you determine when to expect another. 

Owners of newly-built condos can experience a significant increase in condo fees in the 2nd or 3rd year of ownership. This is because fees to cover the cost of certain amenities, like a guest suite that a corporation may have to buy as an asset, might not take effect until year 2.

Also, although developers estimate monthly expenses for the first fiscal year of a condo corporation, it isn’t until the board of directors takes over and conducts the first reserve fund study that you begin to know the true costs of maintaining the building.

Reserve Fund

A portion of your monthly condo fees goes to build up a reserve fund. A condo corporation must set up and maintain a reserve fund for the major repair and replacement of common elements and/or assets. These can include the roof, exterior of the building, roads, sidewalks, sewers, heating, electrical, plumbing, elevators, laundry and recreational facilities.

The corporation must hire a qualified professional, like an architect or engineer, to conduct a reserve fund study. This study:

• recommends how much money is needed for the reserve fund  
• includes estimates of how long the common elements and assets will last and what it will cost to repair or replace certain parts of each
• is designed to help keep the condominium property in good repair
• reduces the risk that owners will need to pay a special assessment fee to make sudden major repairs
• helps ensure that the cost of future repairs is not passed on only to future owners
• must be presented to the board for approval

New condo corporations must complete a reserve fund study within one year of registration. The fund must be adequately funded by the end of the following fiscal year. The corporation must conduct reserve fund studies every three years.

The value of a condo unit can depend on the financial health of the reserve fund.

Special Assessments

Special assessments are a type of common expense fee. They can be charged by a condo corporation from time to time in addition to the regular monthly condo fees. Special assessments may be charged to help pay for unexpected major repairs or shortfalls in the reserve fund.

The condominium declaration sets out how much each condo unit will pay when there is a special assessment. It is the same percentage that is used to determine an owner’s share of monthly condo fees.

A special assessment is set by the condo board and does not need to be approved by all owners. You have the right to request copies of financial records from your board, as long as you put your request in writing and give reasonable notice.

Buying a Newly-Built Condo

When you buy a unit in a newly-built condominium directly from a developer, Ontario’s Condominium Act gives you specific protections.

Buyer Protections

• when you buy a newly-built condo, you have the right to cancel the purchase within a 10-calendar day cooling-off period. The clock on this 10-day period starts from the time you receive a copy of the fully signed purchase and sale agreement or the disclosure statement (whichever comes later)
• you also have the right to cancel a sales agreement within 10 days after any “material change” (i.e. a significant change) to the disclosure statement
• if you exercise your right to cancel, the developer must refund any deposit plus any interest that may be payable
• if you make a deposit, the developer must make sure that it is held in trust
• a developer can’t terminate your purchase and sale agreement without your consent or a court order
• like all new home purchases, newly-built condo units are covered by the Ontario New Home Warranties Plan Act, which is overseen by Tarion Warranty Corporation

Learn more about Tarion’s warranty for condo owners.

Buying a newly-built condo does not mean you should skip getting a home inspection. A quality home inspection will help you make an informed decision before buying a home. It will help you understand a home’s condition and value.

Developers’ Obligations

Developers must:

• take all reasonable steps to finish the condo project on time. You may have a right to compensation if your condo closing is unreasonably delayed
• register the legal documents that are needed to set up the condo corporation without delay

The developer must also provide you with a disclosure statement that includes:

• a general description of the property. For example, the land and building(s) perimeters and unit boundaries
• the number of units the builder intends to lease. If a builder intends to keep ownership of a block of units, he or she will also become a unit owner and can have control over some affairs of the condo corporation
• estimated start and end dates for the construction of amenities that are not completed
• the condo corporation’s current budget. The developer has to release the estimated revenue and expenses for the first year of operation. This information will allow you to plan for your monthly condo fees in that first year.
  
  The budget should show costs for things like staff, maintenance and utilities. Among other reasons, monthly condo fees can increase if the developer defers some expenses and does not include them in the first-year budget 

• the condo declaration. This contains the condominium’s fundamental rules, sets out the definition of units and common elements, shows the percentage of ownership each unit has in the common elements and shows how much each owner must pay in monthly condo fees
• condo by-laws, rules and restrictions. They will set out any restrictions on how you can use your unit or the common elements. For example, they may:
• restrict the size or number of pets
• restrict the colours you can use for shades or blinds
• require you to file certain documents with the corporation if you want to rent your unit

Be aware when buying a newly-built condo

New condo owners are sometimes unpleasantly surprised by large increases in condo fees. These increases can occur during the 2nd or 3rd year of ownership.

For example, fees to cover the cost of certain amenities, like a guest suite that a corporation may have to buy as an asset, might not take effect until year 2. Before you buy, find out if there will be any deferred costs and make sure that you can handle a rise in monthly condo fees.

Developers estimate monthly expenses in the disclosure statement. However, it isn’t until the board of directors takes over – and conducts the 1st reserve fund study – that you begin to know the true costs of maintaining the building.    

Buying a Resale Condo

There are 2 main differences between buying a unit from the developer and buying a resale condo:

• the Condominium Act gives people who buy a newly-built condo a 10-calendar day cooling-off period during which they can cancel the purchase. However, the Condominium Act does not provide buyers of resale condo units with a cooling-off period
• when you buy from a developer you are entitled to receive and review a package of materials called a disclosure statement. With a resale condo, you can review a similar package called a status certificate, provided by the condo corporation. However, you have to request and pay a fee to receive a status certificate. Both packages include copies of the declaration, by-laws and rules

If you decide to work with a real estate professional, know that in Ontario real estate salespersons and brokers must be registered with the Real Estate Council of Ontario (RECO).

Learn about the benefits of working with a registered real estate professional from RECO.

We recommend that buyers of resale condos get a home inspection. A quality home inspection will help you make an informed decision before buying a home. It will help you understand a home’s condition and value.

Learn more about home inspections.

Status Certificate

When you are buying a resale condo, be sure you receive and understand the status certificate.

You should consider making your offer conditional on your satisfactory review of this certificate. We also recommended that buyers get advice from a lawyer and accountant.

A status certificate should include:

• a statement on the status of the current owner’s condo fee payments. Is the current owner up-to-date in paying his or her condo fees? If not, you may owe these fees to the corporation if you purchase the unit
• the condo corporation financial status. This includes:
• the current budget
• the most recent audited financial statement
• the status of the reserve fund
• any special assessments that are in place
• if the corporation knows of anything that may result in future increases in condo fees.
  
  Note that if major repairs are planned, monthly condo fees are likely to increase.
  
  It is also important to check that a reserve fund study has been completed and that the reserve fund is not underfunded. Part of the value of the condo unit you are buying is the financial health of the reserve fund.

• the condo declaration. This sets out the legal definition of the units and common elements, shows the percentage of ownership each unit has in the property and shows how much each owner must pay in condo fees
• condo by-laws, rules and restrictions. The board of directors can pass rules and by-laws that will govern the condo corporation. These must be accepted by the owners and cannot conflict with the Condominium Act. The board of directors may also make rules to govern day-to-day living, like how the freight elevator can be used, if owners can have pets, or what colours can used for blinds or shades

Ask These Question Before You Buy

There are many things that you should consider before buying a condo unit. 

The advice of a lawyer, real estate agent or accountant can help you see the full picture and make an informed decision.

All condo buyers:

Here are some questions that all condo owners should discuss when reviewing the condo declaration, by-laws and rules with their lawyer, real estate agent or accountant.

Keep in mind that this is not an exhaustive list. Also, it also does not include questions related to the agreement of purchase and sale.   

• How are my condo fees determined?
• Do the declaration, by-laws and rules of the condominium suit my lifestyle? For example, some condominiums limit the size and number of pets. Some prohibit certain pets altogether.
• What are the boundaries of my unit? Are the windows and doors part of my unit? Is the roof part of my unit in a townhouse complex? Are any of the pipes behind the drywall part of my unit? In most cases, you will be responsible for and required to maintain and repair your own unit.
• What are my repair and maintenance responsibilities? Am I responsible for the maintenance of my heating and cooling equipment? If a pipe leaks behind the wall, is it my responsibility to repair? If I have exclusive use of a yard, deck or fence, am I responsible for maintaining and repairing them?
• Should I consider getting extra insurance? What does the corporation's standard insurance cover? It is important to understand the corporation’s insurance coverage so that you understand:
• what you are responsible for
• if you would like to get your own insurance coverage

• Is there enough money in the reserve fund? Are there any planned expenditures? It is important to know the financial health of the corporation to help assess what your condo fees will be.
• How many rental and/or mixed-use units are there? Remember, condo owners who rent out their units as an investment may not share the same interests as owners who live in the building.
• Is there a shared facilities agreement with another condominium or property? Some condominium properties may share amenities with others.
• Are there commercial units? This means that residents will need to share the building with stores and businesses.

Buyers of newly-built condos:

On top of the questions above, here are questions that buyers of newly-built condos should discuss when reviewing the condo budget and disclosure statement with their lawyer, real estate agent or accountant.

Keep in mind that this is not an exhaustive list. Also, it also does not include questions related to the agreement of purchase and sale.   

• How might my condo fees increase in the 2nd fiscal year of the condominium corporation?  Are there any deferred costs?  For example, will the condominium corporation have to buy an amenities unit (e.g. a recreation centre) where costs don’t kick in until the 2nd fiscal year? If so, will that result in a fee increase to condo owners?
• Do the condo fees seem comparable to other buildings of the same size and with similar amenities?
• Are all utilities for the unit included in the maintenance fees? If they are not, they will be an additional expense that you will need to budget for.
• Is the reserve fund contribution for the 1st year only at 10% of the corporation’s budget for the 1st fiscal year?  This is the bare minimum. It also means the reserve fund contribution may have to be increased fairly quickly in the 2nd fiscal year. This could affect your condo fees.
• How many units does the developer intend to own and lease? Remember that at owners’ meetings, an owner gets one vote for each unit that he or she owns.  
• Are there any restrictions for owners looking to rent their units? Some corporations may have some restrictions on renting condo units.
• Did the builder put in place a standard unit by-law and an insurance deductible chargeback by-law? They may spell out:
• how the condo corporation’s insurance works when there is damage to your unit
• how the condo corporation’s insurance works when damage to other units or the common elements originates from your unit

Owners need to understand how a corporation’s insurance coverage works because the cost of damage and repairs could be significant. This may help you determine if you would like to get your own the insurance coverage.

If these by-laws are not in place they can be passed later, but will require approval of a majority of owners. This can be hard to get.

Buyers of resale condos:

Here are questions that buyers of resale condos should discuss when reviewing the condo budget and status certificate with their lawyer, real estate agent or accountant.

Keep in mind that this is not an exhaustive list. Also, it also does not include questions related to the agreement of purchase and sale.   

• Is the budget in a deficit or a surplus? It is important to know the financial health of the corporation to help assess what your condo fees will be.
• Has the budget increased in the past few years? Are the increases due to things other than inflation or utility costs? What are the reasons for these increases? Past budget increases may help you see if more future increases are likely to happen.
• Are there plans to increase condo fees during the current fiscal year? Does the corporation know of anything that may lead to an increase in the condo fees? Has the corporation levied any special assessments? A special assessment is a type of common expense fee that is in addition to the regular condo fees and help pay for things like unexpected major repairs or shortfalls in the reserve fund.
• Are all utilities for the unit included in the condo fees? If they are not, they will be an additional expense that you will need to budget for.
• What services (e.g. security, maintenance, staffing) does the budget include? How much do they cost?                     
• What is the amount in the corporation’s reserve fund? Sometimes, when a condo corporation has a large reserve fund in relation to its operating budget, it could mean that major repairs may be needed soon. Keep in mind that this is not necessarily a bad thing. It could mean that the corporation planned well and saved money in advance.

It’s also not necessarily a bad thing if the reserve fund is low. It could mean that the corporation just spent money on major repairs and is now replenishing the fund.

• Is there a standard unit by-law and an insurance deductible chargeback by-law? They may spell out:
• how the condo corporation’s insurance works when there is damage to your unit
• how the condo corporation’s insurance works when damage to other units or the common elements originates from your unit

Owners need to understand how a corporation’s insurance coverage works because the cost of damage and repairs could be significant. This may help you determine if you would like to get your own the insurance coverage.

• Is the corporation involved in any lawsuits? If so, what is the case about and how much money is at stake? Are there any judgments against the corporation? If so, does the corporation have to pay any money, etc., to another party?
• How many parking spaces and locker units come with the unit?  Are they owned by individual unit owners or are they exclusive-use common elements? It is important to understand if you will have a parking spot or locker space, and if you or if the corporation will be responsible for maintaining and repairing it.

Source: Ministry of Consumer Services

MAY NEWSLETTER