Condo Glossary
Plain-English definitions of 20 Ontario condo terms, from assignment to turnover meeting. Alphabetical order.
Assignment
The transfer of the right to purchase a pre-construction condo unit from the original buyer (the assignor) to a new buyer (the assignee), before the building is registered as a condominium. The developer remains the seller of the unit, and the assignee completes the final purchase directly with the developer at closing. Assignment sales cannot be listed on MLS under CREA rules because there is no property title to list. Developer consent is required in most cases under the standard BILD APS. Since May 7, 2022, the CRA's position is that HST applies to the profit portion of an assignment sale. See the assignment sales guide for full detail and the CRA guide GI-120 for the tax treatment.
Caveat Emptor
Latin for "buyer beware." In Ontario real estate law, the principle that the buyer is responsible for investigating the property they're purchasing and cannot generally sue the seller after closing for defects the buyer should have discovered through reasonable diligence. Caveat emptor applies to patent defects (those visible on inspection) but not to latent defects that the seller knew about and deliberately concealed. In a condo purchase, caveat emptor is part of the reason that the status certificate condition and a thorough lawyer review are so important. The buyer's ability to walk away is at its peak during the conditional period and essentially disappears once the deal is firm.
Common Elements
All parts of the condominium property that are not part of any individual unit. Common elements typically include the building structure (exterior walls, roof, foundation), mechanical and electrical systems serving the building, hallways, stairwells, elevators, lobby, parking garage, amenities (gym, pool, party room), landscaping, and in most declarations, exterior windows and balconies. Common elements are owned jointly by all unit owners proportionally and are managed and maintained by the condominium corporation. The costs of maintaining common elements are funded through monthly maintenance fees and, when needed, special assessments. Your declaration defines exactly what is a common element in a specific building.
Common Expenses
The costs incurred by the condominium corporation in the management, maintenance, and operation of the common elements, plus contributions to the reserve fund. Common expenses include property management fees, building insurance, utilities for common areas, landscaping, cleaning, security, elevator maintenance, and all other operating costs shared across the corporation. Each unit owner pays a proportional share of common expenses each month based on their unit factor, the same percentage used to allocate all shared costs. What most buyers call the "maintenance fee" is their monthly contribution to common expenses. The term "common expenses" is the one used in the Condominium Act.
Condominium Corporation
The legal entity created when a condominium is registered with the province. The corporation is not-for-profit and is controlled by unit owners through an elected board of directors. It owns and manages the common elements, collects maintenance fees, maintains the reserve fund, hires the property management company, and enforces the declaration, bylaws, and rules. The corporation can enter contracts, own property, and sue and be sued. Every unit owner is automatically a member of the corporation. The board of directors is elected at the annual general meeting and is responsible for fiduciary management of the corporation's finances and assets.
Declaration
The founding document of a condominium corporation, registered with the Province of Ontario when the condominium is created. The declaration defines the boundaries of each unit, establishes the common elements, specifies each owner's unit factor (their proportional share of common expenses and voting rights), and sets out any restrictions on the use of units. It's the most fundamental governing document in a condominium and takes precedence over bylaws and rules. Amending a declaration requires a vote by unit owners, typically an 80% majority, making declaration provisions far more stable than rules, which the board can change with 30 days' notice.
Disclosure Statement
A document that developers of pre-construction condominiums must provide to buyers under the Condominium Act. The disclosure statement describes the proposed condominium, the common elements and amenities, the projected first-year budget (which under section 75 the developer must fund for the first year if actual costs exceed the budget), the reserve fund contributions, and a description of the unit. The developer must give the buyer the disclosure statement before or at the time of signing the Agreement of Purchase and Sale. Receipt of the disclosure statement, along with the CAO's purchaser guide, starts the 10-calendar-day cooling-off period during which the buyer can rescind the agreement for any reason.
Final Closing
The completion of a pre-construction condo purchase, which occurs when the building is registered as a condominium with the Province of Ontario. At final closing, the buyer takes title to the unit, the mortgage begins, and any adjustments between the interim occupancy fees paid and the actual first-period maintenance fees are settled. Closing costs itemized in the Agreement of Purchase and Sale, including development levies, utility connection fees, and education levies, are also paid at final closing. These costs are disclosed in the APS but are often not emphasized at the sales centre, and buyers can be surprised by amounts ranging from $10,000 to $40,000 or more depending on the project and municipality.
Interim Occupancy
The period between when a pre-construction buyer takes possession of their unit and when the building is registered as a condominium. During interim occupancy, the buyer can move in and use the unit but does not own it. Legal title has not transferred because there is no condominium title to transfer yet. The buyer pays an interim occupancy fee (phantom rent) to the developer under the formula in section 80 of the Condominium Act. Interim occupancy periods in Toronto have ranged from a few months to over a year, depending on the pace of registration. During this period, the buyer cannot sell the unit as a resale property; assignment is the only exit option and requires developer consent.
Lien
A legal claim registered against a property as security for an unpaid debt. In the condo context, the most common lien is a common expense lien registered by the condominium corporation against a unit whose owner has defaulted on maintenance fee payments. Under section 85 of the Condominium Act, the corporation can register this lien within 3 months of the default date. The condo lien has priority over most other encumbrances on the property, including a registered mortgage, which is why lenders treat them seriously. A lien must be discharged before any sale can close. Buyers' lawyers check for liens as part of the title search during the status certificate review period.
Maintenance Fee
The monthly payment made by each unit owner to the condominium corporation for their proportional share of common expenses, including the reserve fund contribution. In Ontario, maintenance fees range from roughly $0.59 to $1.50 or more per square foot per month, depending on the building's amenities, age, utilities inclusion, and management. A 700 square foot downtown Toronto unit with mid-range amenities runs approximately $875 per month at the current mid-range rate. Maintenance fees are not fixed; the board can increase them with 60 days' notice. They are not tax-deductible for owner-occupants. For investment properties, they may be deductible against rental income. See the maintenance fee guide for a full breakdown.
Material Change
In the pre-construction context, a change to the disclosure statement that is significant enough to require the developer to notify the buyer and reset the 10-day cooling-off period. Under section 74 of the Condominium Act, a material change includes things like a substantial reduction in unit size, removal of a promised amenity, or a significant change to the terms of the condominium. Minor changes, such as slight adjustments to finishes or specifications within permitted tolerances in the APS, do not qualify. When a material change occurs after the original cooling-off period, the buyer receives a new 10-day window to rescind the agreement and receive a full deposit refund. What constitutes a material change in any specific situation is a legal question for your lawyer.
Phantom Rent
The colloquial term for the interim occupancy fee paid by a pre-construction buyer during the period between taking possession of a unit and the building's registration as a condominium. Under section 80 of the Condominium Act, the fee is calculated as: interest on the unpaid balance of the purchase price at the Bank of Canada conventional one-year mortgage rate, plus estimated monthly property tax, plus estimated monthly common expenses. None of the phantom rent payment reduces the purchase price or builds equity. The unpaid balance that drives the interest calculation is the purchase price minus deposits paid. On a $700,000 unit with $150,000 in deposits, interest is calculated on $550,000. See the pre-construction guide for more detail.
Pre-Construction
A condo unit purchased from a developer before or during the construction period, before the building is registered as a condominium. The buyer commits to purchasing a unit based on plans and a disclosure statement rather than a finished physical space. Deposits are paid in installments over the first year or more after signing. The buyer has a 10-calendar-day cooling-off period from the later of the signed Agreement of Purchase and Sale or the receipt of the disclosure statement and CAO purchaser guide. Pre-construction purchases involve unique risks including permitted occupancy delays, developer changes to the unit or amenities, and the interim occupancy (phantom rent) period before final closing. Deposits are protected under Ontario law and held in trust or in a prescribed account until occupancy or refund.
Reserve Fund
The savings account maintained by a condominium corporation to fund major repairs and replacements to the common elements. Under sections 93-94 of the Condominium Act and Ontario Regulation 48/01, every corporation must maintain a reserve fund and conduct regular reserve fund studies. New condominiums must contribute at least 10% of their first-year budget to the reserve fund. The reserve covers items like elevator modernization, roof replacement, underground garage waterproofing, window programs, and mechanical system replacements. The fund is invested prudently, typically in GICs or government bonds. When the reserve fund is inadequate for a needed repair, a special assessment is levied. See the reserve fund guide and the CAO reserve funds guide for more detail.
Special Assessment
A one-time charge levied on unit owners by the condominium corporation to fund costs that the reserve fund cannot cover. Under section 84 of the Condominium Act, the board can levy a special assessment without owner approval in most cases. The exception under section 97 is when the assessment exceeds 10% of the annual budgeted common expenses, which requires notice to owners and a meeting before proceeding. Special assessments are apportioned by unit factor. Under section 85, unpaid special assessments become the basis for a lien registration after 3 months of default. The status certificate discloses any assessment that has been approved or is being contemplated by the board. An assessment approved but not yet levied is particularly important for buyers to catch, because whoever owns the unit when the levy notice goes out is responsible for paying it.
Status Certificate
A document produced by a condominium corporation that discloses the financial and legal state of the corporation at a specific date, as it relates to a particular unit. Under section 76 of the Condominium Act, the corporation must provide the certificate within 10 calendar days of a written request, for a maximum fee of $100. The certificate covers: the unit's monthly common expenses, arrears attached to the unit, reserve fund balance and most recent study results, the corporation's insurance, any active or threatened litigation, and any pending special assessments. Attached to the certificate are the full governing documents: declaration, bylaws, and rules. Every resale condo buyer should make their offer conditional on satisfactory review of the status certificate and have their lawyer review the full package. The full status certificate guide explains each section and what red flags to look for.
Strata
The term used in British Columbia and some other Canadian provinces for what Ontario calls a condominium corporation. A strata corporation in BC is functionally equivalent to a condominium corporation in Ontario: it owns and manages the common property, collects strata fees (equivalent to maintenance fees), and maintains a contingency reserve fund (equivalent to a reserve fund). The governing legislation differs by province. If you're buying in Ontario, the relevant law is the Ontario Condominium Act 1998. If you've previously dealt with a strata property in BC, the structure and concepts are similar but the specific rules, disclosure requirements, and governance procedures differ.
Turnover Meeting
The first meeting of unit owners in a new condominium corporation, at which control of the corporation is transferred from the developer to the unit owners. Under the Condominium Act, the turnover meeting must be held within 21 days of the developer losing majority ownership of units in the corporation. At the turnover meeting, owners elect their own board of directors for the first time, replacing the developer-appointed interim board. The developer is required to deliver to the new board all records of the corporation including the declaration, bylaws, and financial records. The turnover meeting is a significant milestone for any new building, as it marks the point at which owners begin governing their own corporation rather than the developer making those decisions.
By-Laws
The second tier of governing documents in a condominium corporation, below the declaration but above the rules. Bylaws govern the internal management structure of the corporation: how the board is elected, what qualifications directors must have, how meetings are run, voting procedures, quorum requirements, and similar matters of corporate governance. Bylaws are amended by a vote of unit owners, typically requiring a majority of all units, not just those voting at the meeting. This makes them more stable than rules but easier to change than the declaration. Bylaws are attached to the status certificate package and are part of what your lawyer reviews during the conditional period. Any bylaw that restricts how you intend to use or manage the unit is material to your purchase decision.