Your Next Steps After Registering A New Condo Unit
New condo units are unique transactions as they have two stages to their closing procedure. After the first step, known as an occupancy closing, you would then register your condo, and then pay any additional balances due.
At Blackburn Lawyers, we know it can be frustrating coordinating with the builders and condo corporations, as well as brokers and banks and lending institutions. Based in Richmond Hill, Ontario, the goal of our real estate legal team is to ensure you avoid any pitfalls or issues as you purchase your new unit.
Receiving Ownership Of The Condo Unit
The second closing that occurs takes place shortly after the condominium has been registered. At that time, you must pay the builder the balance of the purchase price together with the builder’s adjustments. You will then receive the ownership of the condominium and will be able to register your mortgage against the condominium and receive the money you have borrowed. Land transfer tax must be paid at the time of the final closing.
Obtaining Condo Owner Insurance
You must arrange for your own condominium owner’s insurance. The insurance obtained by the condominium will not replace the improvements within your unit (cabinets, floor coverings, etc.) nor will it protect you from an act of negligence that may cause damages to other unit owners or injuries that may be sustained by someone visiting your unit. Your own insurance will also protect you from the loss of your contents.
Understanding Maintenance Fees And Common Expenses
You should also be prepared for an increase in your common expenses or maintenance fees at the end of the first year following closing. The original proposed budget is seldom large enough to meet the actual operating expenses for the condominium. The original budget is set by the builder and tends to be based on very conservative estimates of the expenses.
However, when the unit owners elect their own board of directors and take over the management of the condominium the current actual expenses can be determined and an increase can be expected to meet these actual operating expenses. Also, the portion of your common expenses that is paid to the reserve fund may be determined not to be adequate which would result in a further increase to the monthly maintenance fees.