10 Questions you should ask about the Disclosure Statement
When you buy a newly built condo, the developer is required to provide a disclosure statement about the property. This should include a description of the property with details about the unit boundaries and perimeters of the property and buildings; how many units the builder will keep; estimated amenity construction start and ends dates for any parts of the condo not yet completed; the condo corporation’s budget for the first year of operation, the condo declaration with general rules such as how much each unit will pay in condo fees each month; and any condo restrictions.
Whew, that is a lot to read. Here’s a quick summary of 10 important questions you should ask about your condo’s Disclosure Statement before closing the deal.
1. What is the short-term rental policy?
Although you own your condo, you may not be allowed to sublet or lease the unit. Some condos allow for long-term rentals while others will allow short-term rentals. It’s important to know the policy for your condo if the unit is an investment property.
This information is covered in your Disclosure Statement. Fail to read the fine print before listing your condo for short-term rental may result in a court fight for violating the condo rules.
2. What is the pet policy?
Condo pet policies are as diverse as condo properties themselves. One condo may ban pets that need to be taken outside since it causes wear and tear shared areas while another offers doggie daycares and washing stations.
If you’re a pet lover, this is an essential question. You may find the size or number of pets are restricted, or even the type of pet allowed. You don’t want to move into your new home only to find out that Fido needs to find a new home of his own.
3. Who is allowed to rent lockers?
When you buy your condo, you may not be able to buy a locker with the unit. In this case, you may be able to rent a locker from another condo owner.
Also ask about the size of lockers in your building. There’s no standard size and some may even be irregular in shape to take advantage of space. Your condo board may be able to point you toward an available rental locker if there is no information board available in the condo.
Locker rentals are almost always restricted to residents. A locker can be a smart investment since it can help the resale value of your unit. If you can, try to purchase one when it becomes available.
4. Who is allowed to rent parking spaces?
Your ability to rent a parking space—or rent it out—will be determined by rules in your condo’s Disclosure Statement and municipal by-laws in your city. You also need to know if the parking spots are common elements for the owners and occupants or if they are exclusive-use common elements, used by specific units. Like lockers, parking space rentals are almost always restricted to residents.
5. What happens to lockers and parking that are left over?
Since fewer buildings actually have a one-to-one ratio for parking spaces to units. This means that there are usually far fewer spaces than units, making leftover parking spaces extremely rare.
That being said, your condo may offer these spare spots or lockers for rent. This may be to your advantage since the money from rentals may go toward improvement or upkeep for the building and common elements.
If you’re interested in extra storage or a parking space that has no owner, you may be able to rent or buy any leftover spaces. It never hurts to ask.
6. Is there a communication control unit?
If your condo property has a communication control unit, paying for it will be a part of your monthly maintenance fees. It may include wires, pipes, ducts, and other mechanics that help supply utilities or services.
7. Are the retail units part of the condo or in separate title?
Living above retail space can be extremely convenient when you buy a condo. A grocery store or market, a few cafés, and other retail makes your neighbourhood walkable and helps you run errands close to home, saving time and money. A grocery store attached to the building may mean you can buy your dinner wearing shorts and flip flops on the coldest winter day.
If the retail unit is a part of the condo title, the retail space is purchased, just like your condo. This means that maintenance fees are being paid by the owners, as are any hydro or other bills associated with the space.
Sometimes, the developer will register the retail space as a separate condo corporation, that will be governed separately. This lets the retail space owners develop their own Disclosure Statement, reserve fund, budget, maintenance fees—all the boring details that left you half asleep while reading your condo Disclosure Statement.
Worried that a floor of retail is shirking its share of expenses for shared expenses like utilities or landscaping? Don’t be. There’s usually something called a Shared Facilities Agreement with your condo corporations so both organizations pay their fair share for upkeep.
8. Is there visitors parking?
Visitor parking is usually just that—for visitors only. With the exception of emergencies, residents are never allowed to park there. You may need to meet your visitors and help them obtain parking permits for the visitor parking area.
Ask if there’s a different permit for overnight parking or if there’s a limit on the number of permits available. You may discover that you’re only allowed a certain number of overnight permits a month. If this is the case, your Disclosure Statement is trying to prevent residents from getting around the parking agreement by repeatedly parking in the visitor lot.
9. Does the building have a superintend unit?
Some condo buildings offer a condo unit as an incentive for a live-in superintendent. There are many advantages to having a superintendent living onsite, since a good superintendent can have an impact on your condo’s resale value. After all, no one wants to buy a unit in a messy building.
Your building superintendent helps to maintain mechanical equipment, reducing repair costs, along with cleaning common areas and acting as a point of contact if you have a problem in the building.
10. What are the rules and regulations of the condo?
This is the most obvious, and most important question that you need to ask about the Disclosure Statement.
Your first stop should be the website of your condo board or association. That makes it easy to search for terms related to specific questions you may have.
If you’re a first time buyer, be sure to read the rules and regulations carefully. This is the area where there may be unwelcome surprises later if you haven’t done your homework. Rules and regulations can include restrictions on the curtain or blind colours allowed, pet restrictions, or even restrictions or preferred contractors for renovations.
In Ontario, you have the right to cancel your condo purchase within 10 days of receiving the Disclosure Statement or receiving the signed purchase and sale agreement—whichever arrives the latest. That’s how important your new condo’s Disclosure Statement is—it can literally be a deal breaker for you.
Before you buy a condo, know what’s important to you and go through the Disclosure Statement with your real estate agent or a lawyer.