Co-Ownership

The following article is written by Chris Kapches, Chestnut Park Real Estate Ltd.

Co-Ownership

- Co-ownership as a form of housing tenure bears similarities to both co-ops and condominiums, however, it also has some unique characteristics.

- A co-ownership Buyer acquires a percentage interest in the co-ownership building and lands upon which it is located. This interest, which is a freehold interest, is registered on title. The Buyer's interest is expressed as a percentage of the entire co-ownership property, i.e. 2.56 percent.

- As in the case of a co-operative Buyer, the Buyer also acquires the exclusive right to occupy a particular unit within the building. This right is embodied in an occupancy agreement. As in the case of co-operative purchases, owners of co-ownership interests should be extremely cautious when renting their unit. It is recommended that owners of units consult their solicitors prior to leasing their units to ensure that the owner is in a position in the future to obtain vacant possession, either for their own use, or for sale purposes.

- A co-ownership project's affairs are managed by a Board of Directors that are elected from amongst the co-owners. The day-to-day management of the co-ownership is usually entrusted to a management company that is responsible for maintenance, the payment of all accounts, landscaping , housekeeping, etc.

- Buyers of a co-ownership unit generally do not require Board Approval, although there may be instances where the co-ownership agreement requires some form of approval. If this is the case, your agreement of purchase and sale should provide for an appropriate time to allow the approval process to take place.

- As in the case of condominiums and co-ops, the Buyer should obtain an Estoppel Certificate.

- The Land Transfer Tax as it applies to co-ownership units is the same as any other freehold transaction. Land Transfer Tax is paid on the value or the consideration, i.e. sale price.

- The problems of financing of a co-ownership unit is similar to that of co-operative units. There are lenders that will provide financing, however, the lending limits that lenders use are generally lower than freehold or condominium purchases. As in the case of co-operative unit Buyers, Buyers will be required to make greater equity deposits in these types of acquisitions.