Declaration of Co-ownership: Read it before buying
Thinking of buying a divided co-ownership property, more commonly known as a condo? You should be aware that there is a charter setting out all the regulations for the building. It’s called the Declaration of Co-Ownership.
In this notarized document, you’ll find information about the building’s ethics and aesthetics, for example, whether animals are allowed or whether barbecues are permitted on the balcony. It will also include the condo fees, what the payment includes and who it must be made out to.
The Declaration of Co-ownership basically includes three sections:
- The incorporating documents, which define, for instance, what the private portions are (living units) and what the common portions are (main building), as well as the terms of the building insurance and the number of voting rights each member has at the general meeting of the co-owners;
- The regulations, including those regarding life in the building and those on the functioning and administration of the co-property;
- The descriptive summary, which contains the number of private and common lots (cadastral description) and other more technical details, such as encumbrances.
To avoid unpleasant surprises down the line, it’s important to read and understand this official document before buying a condo… even if it’s not the most entertaining reading material!
A condition on the offer to purchase
There is a clause in the Offer to Purchase that specifies that the purchase of the condominium is conditional on the reading of the Declaration of Co-ownership. This means that the promise to purchase can be cancelled if the potential owner is so dissatisfied with an item in the Declaration that they no longer want to buy a unit in that building.
Administration of the co-owned property
You can also ask the current co-owner to show you the financial statements and operating budgets, as well as the most recent minutes of the co-owners’ meetings, which is overseen by a board. These will give you a better overview of the building’s history.
Looking at all these documents will allow you to be well informed about the building you want to purchase as well as the shared rules for living there. If need be, call on the services of a lawyer or notary to read and analyze the documents and give you a summary.