Legal Mistakes to Avoid When Buying a Condo in Ontario

16 Jul Legal Mistakes to Avoid When Buying a Condo in Ontario

Buying a condo in Ontario can be an exciting step, whether it’s your first home, a downsize, or an investment. But unlike purchasing a freehold home, condos come with their own unique set of legal considerations. Overlooking critical legal aspects can lead to unexpected costs, disputes, and regrets. Here are five common legal mistakes to avoid when purchasing a condo in Ontario, and how to protect yourself along the way.

1. Failing to Review the Condo’s Status Certificate

One of the most important documents in any condo purchase is the status certificate. This certificate provides a snapshot of the condo corporation’s financial health, bylaws, insurance coverage, reserve fund, and any pending legal issues. Yet, many buyers skip a thorough review, or fail to have their lawyer review it, which may be a costly oversight. 

The status certificate can reveal any red flags, such as upcoming special assessments (extra charges to cover unexpected repairs), ongoing legal battles, or inadequate reserve funds. Always make your offer conditional on reviewing the status certificate, and ensure your real estate lawyer examines it carefully before waiving the condition.

2. Overlooking Hidden Costs: Maintenance Fees and Special Assessments

Condo living may seem more affordable at first glance, but ongoing maintenance fees can significantly impact your monthly budget. These fees cover shared building expenses such as landscaping, security, snow removal, and common area maintenance. However, they can also rise over time, especially if the condo’s reserve fund is poorly managed. 

In addition to regular maintenance fees, buyers may be subject to special assessments, one-time charges levied to cover major repairs or shortfalls. These are often unexpected and can cost thousands of dollars. Reviewing the condo’s financials and understanding its history of assessments can help you anticipate potential increases or surprises.

3. Not Understanding the Developer’s Obligations and Warranties

If you’re buying a new condo or a pre-construction unit, it’s essential to understand what the developer is legally responsible for. In Ontario, new condos come with coverage under the Tarion Warranty Corporation, which provides protection against construction defects, delayed occupancy, and other issues.

However, not all aspects may be covered under warranty, and some buyers mistakenly assume every issue will be the developer’s responsibility. Take the time to read the Tarion coverage details, understand what’s included – and what’s not – and get clarity on timelines, material finishes, and occupancy expectations. 

4. Ignoring Legal Risks in Pre-Construction Condo Agreements

Pre-construction condos come with enticing perks: brand-new features, modern amenities, and potential for appreciation. But they also carry more legal complexity. These agreements are typically developer-friendly, full of clauses which may not be in your favour, including rights to extend timelines, make design changes, or even cancel the project entirely.

Additionally, you may be on the hook for unexpected closing costs, such as development charges, utility hook-up fees, and legal fees not disclosed upfront. Having your lawyer review the Agreement of Purchase and Sale (APS) before signing is critical to understanding your rights, and what you’re actually committing to. 

5. Not Taking Legal Steps to Protect Your Interests

Before signing any purchase agreement, it’s essential to get professional legal advice from a lawyer experienced in Ontario real estate law. They’ll help you:

• Review and interpret the status certificate
• Understand the condo corporation’s rules and financial standing
• Identify potential risks or hidden clauses in your contract
• Explain your rights under Ontario’s Condo Act and Tarion Warranty
• Ensure all conditions (such as financing or status certificate review) are included to protect you

While your real estate agent plays a key role in guiding you through the buying process, it’s important to remember legal advice should always come from a qualified real estate lawyer. Their expertise ensures your rights are protected, allowing you to fully understand the legal aspects of your purchase.

Stewart Esten Law Firm

Condo ownership can offer convenience, community, and low-maintenance living, but only when approached with the right knowledge and preparation. By avoiding these common legal mistakes, you can make a smarter, safer investment and enjoy your new condo with confidence.

If you’re planning to buy a condo in Ontario, the real estate lawyers at Stewart Esten Law Firm are here to help. With trusted legal guidance and a deep understanding of Ontario’s condo laws, our team can walk you through every step, giving you peace of mind from offer to closing. Contact Stewart Esten today to protect your investment and make your condo purchase with confidence.