Ask A Realtor: What is Condo Registration?

When it comes to condo registration, the most important issue to you need to know is the difference between occupancy and ownership.

Take a traditional low-rise home. The property closes, you move in, and you officially own it. Now take a newly erected condominium, where you’ll typically enjoy occupancy long before you receive the title to your unit. Obviously this depends on when in the sales/construction process you bought, but the point remains. A “condominium” is not technically formed until it is completed and meets the approval standards that enable it to be registered with the Land Registry Office. Then and only then can the title of your unit be transferred to you.

The 35 Wabash sales centre taking registrations for the preconstruction project.

In the case of high-rise condos, you’re usually looking at tall structures where lower floors are finished before the upper ones. Once the interior is complete, upper level residents can move in too. The approval process however technically starts once the very first suite is occupied. This often takes upwards of six months, however it can be quicker.

Approval first goes to municipal council, then the regional planning department, and finally on to the Minister of Consumer and Commercial Affairs. The purpose of these checks and balances is to verify that the building upholds everything stipulated in the draft plan and Condominium Declaration. Once the parties are content that all the requirements are met, the condo registration is complete.

While most first-time buyers I deal with are familiar with the concept of a condominium being “registered”, they don’t always comprehend exactly what that means in regard to their ownership.

MAILMASTER Subject: Condos under construction On 2013-12-31, at 5:13 PM, Collins, Anthony wrote: Condo, condos, condo towers, construction, cranes, Toronto waterfront, waterfront condos. Dreamstime images. Waterfront condos 2012.jpg Condo under construction.jpg Condo towers under construction.jpg
Image via the Toronto Star.

When you move into a condominium — unless it comes after the condo’s official registration — you don’t outright own your unit. You actually enter into what is referred to as ‘interim occupancy’. This alludes to the period between the occupancy date that’s given to you once roof-topping has occurred, and when the condominium is registered and you’re presented with title to your unit. The unit is still owned by the vendor until that time.

After moving in, an occupancy fee must be paid to the developer until the condominium corporation is officially registered. How is this fee determined? Simple. It relates to the interest portion of the balance owing on the purchase price (usually payable on the registration date), which is based on a one-year mortgage rate of the Bank of Canada. Added to that are the unit’s estimated maintenance fees, plus its portion of the estimated real estate taxes.

If the procedure sounds familiar, that’s because it’s almost identical to paying rent until you own your unit… Although it’s important you recognize that it’s not actually considered rent, nor is it money that can be applied toward your mortgage.

Via Getty Images/Zoom Photographics.

You take out your mortgage once title is transferred. This is when the builder/developer receives the money. Your benefit as the unit owner is getting a speedy move in and not having to wait around until registration. You also have a substantial amount of notice before your occupancy date.

There are still interim closing costs to consider, including the amount of money that will bring all deposits to the required percentage of the purchase price, with adjustments, monthly occupancy fees, the price of upgrades, and enrolment of your unit with TARION Warranty Corporation added on top of that. During interim occupancy, it’s crucial to note that you must have your homeowner’s insurance in place, as well as arrange for utility hook-ups as though you already own the home. Lastly, because your appliances are being used and your TARION is in place, those
warranties activate upon occupancy too.

Buying into a new condominium is an invigorating affair. It’s one that homeowners look forward to with energy and enthusiasm. Honestly, what could be more exciting than being the first to settle into a modern, cutting-edge development? Plus, the interval between buying and moving in has many advantages, including the fact that your unit increases in value before you even take possession.

Always do your best to comprehend the configuration of condominium ownership before involving yourself. Informed purchasers are the best sort!