A look at co-ownership

 

This was taken from Vicki Borenstein’s website in 2017

“Virtually identical to condominium ownership in most respects, co-ownership offers you all of the advantages of a traditional real estate  acquisition except one: price!

Imagine owning a one bedroom apartment at Yonge & Bloor, Yonge & Eglinton, Spadina Village, The Annex or prestige Forest Hill for UNDER $250,000.  Well with co-ownership you can.

Co-ownership is one of the great real estate secrets in the Toronto real estate market place. A market that has seen borderline absurd increases in property prices during the past 20 years.  

 Prices that have put well-located, spacious apartments in beautifully appointed buildings out of reach for most middle-income individuals and families wanting to live in Toronto.

Co-ownership is the answer.

There are about 50 Toronto prime location co-ownership buildings which are listed below. Many of them are small buildings with virually no owner turnover but half of them have regular availability. Many are sold exclusivley and are not offered on MLS or realtor.ca.

And as one of the few real estate agents in Toronto specializing in this extraordinary niche market, I am in the best possible position to help you find that affordable Toronto central apartment of your dreams.

The City of Toronto prohibits the conversion of apartment buildings to condos in order to protect the number of affordable and mid-range rental units in the city. Many developers have got around the issue by converting rental buildings to co-ownership. Legally, there’s a difference but owners wouldn’t see any difference in the day-to-day operation which is primarily the same as a condo.

The board of directors, building management, common expenses, maintenance fees, yearly financial audits, individual mortgages and the right to sell, lease or mortgage units without consent of other residents, are the same. One slight difference is that condominium owners receive individual tax bills. Co-owners pay their share of property taxes as part of their monthly maintenance fees.

While this can make co-ownership monthly maintenance fees appear higher than those of a condominium, the difference is largely illusory.

An important difference is that traditional bank financing is impossible to get for co-ownerships. This has nothing to do with their soundness as an investment. But since only about 50 buildings in Toronto are co-ownerships, they represent too small a sector for the big banks to cover.  

Co-ownerships do not qualify for CHMC high ratio mortgage insurance. The theory is that CHMC being a government backed insurance underwriter don’t want to encourage the practice of taking rental units out of the residential home market.

The good news is that several reputable trust companies and credit unions will provide  mortgages for co-ownerships, and at interest rates often better than those offered by the banks. DUCA, Equitable, Alterna, Italian Credit Union and the Toronto Star Credit Union have the biggest share of the co-ownership mortgage market in Toronto. The Italian Credit Union, The Toronto Star Credit Union and T.D. Canada Trust also offer financing to selected unique properties.

Do not confuse Co-ownership with Co-op!

Martin Rumack, is a Toronto lawyer with years of experience in co-ownerships. He teaches a course on the topic for Toronto real estate agents. He explains the differences between condo ownership, co-operative ownership and co-ownership: 

With Condos, you purchase a unit in a building and gain a percentage interest in the common areas.You receive a deed to the unit you have purchased. With Co-ops, you purchase shares of a private corporation that owns and manages the building. You also receive a leasehold occupancy interest in a specific unit and the exclusive right to use it. You do not receive a deed; you receive shares in the corporation.

With Co-ownership you purchase an undivided percentage of the building that is registered on title (your name is on the legal ownership document), along with the exclusive right to occupy  a specific unit and you receive a deed setting out the percentage interest you have acquired.

With condos and co-ownerships (but not co-ops), you can mortgage your interest in the property without getting consent from the board of directors. Co-ownership is a hybrid between co-op and condo,” Mr. Rumack says. Buyers don’t have to be concerned as long as they do their due diligence and review disclosure documents carefully with a lawyer knowledgeable about co-ownerships.

 

LIST OF ESTABLISHED CO-OWNERSHIPS AS OF 2013

 

1840 Bathurst Street

2400 Bathurst Street

2550 Bathurst Street

2603 Bathust Street

1901 Bayview Ave.

21 Benlamond Avenue

580 Christie Street

160 Donway West

358,360,362,370 Dundas Street East

1011-1045 Dundas Street East, Mississauga

660 Eglinton Aveune West

707 Eglinton Aveune West

717 Eglinton Aveune West

30 Elm Avenue

28 Glen Manor Road

1521 Glenfern

30 Gloucester Street

335 Lonsdale Avenue

291 Ontario Street

480 Oriolle Parkway

71 Jonesville Crescent

1377 Lakeshore Drive, Burlington

355 Lonsdale Avenue

60 Montclair Ave.

323 Queen Street East

35 Raglan Avenue

516 Riverside Drive

170 Roehampton Avenue

23-25 Scarborough Beach Blvd.

35-37 Scarborough Beach Blvd.

22 Shallmar Blvd. (converted to condo)

58 Sherwood Avenue

1275 Silver Spear Road

148 Soudan Ave.

720 Spadina Ave.

114 Vaughan Rd.

78 Warren Road

46 & 50 Wineva Aveue

5949 Yonge Street

 

Understanding condominiums and co-ownerships

Prepared By:

Martin K.I. Rumack – Barrister & Solicitor

2 St. Clair Avenue East, Suite 202

Toronto, Ontario, M4T 2T5

(416) 961-3441 Fax (416) 961-1045

Condominiums and co-ownerships are legal structures that define both the exclusive rights and the shared rights of individuals who purchase portions of buildings registered under these structures.

The following are important features of condominiums and co-ownerships for the purchaser:

 

CONDOMINIUM

CO-OWNERSHIPS

  • Purchaser obtains ownership of individual unit (deed)
  • Purchaser obtains ownership of individual unit (deed)
  • Purchaser gains a percentage interest in the common areas of the building.
  • Purchaser gains exclusive right to occupy a specific unit through a registered Co-ownership Agreement and the provisions of the The Co-ownership Agreement
  • Purchaser gains a percentage interest in the common areas of the building.
  • Purchaser obtains ownership of a percentage interest in the common areas of the building.
  • Purchaser becomes a member of the Condominium Corporation which:

(a) manages the affairs of the building according to the Condominium Act, and more particularly the Declaration and the By-laws;

(b) represents the interests of the owners

  • Purchaser becomes a member of the Co-ownership Corporation which:

(a) manages the affairs of the building according to the Co-ownership Agreement, and more particularly the corporation by-laws and or private contracts;

b) represents the interests of the owners

  • Purchaser can individually finance his/her own unit
  • Purchaser can individually finance his/her own unit
  • Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of common expenses
  • Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of common expenses
  • Condominium Act requires a reserve monetary fund to be established for maintenance of building
  • Co-ownership agreement requires a reserve monetary fund to be established for maintenance of building
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting at Annual General Meeting
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting at Annual General Meeting
  • Purchaser is subject to the Declaration, rules and bylaws of the Condominium Corporation
  • Purchaser is subject to the Co-ownership Agreement rules and by-laws and other contractual documentation of the Co-ownership Corporation
  • Purchaser does not need consent of the other owners or the Condominium Corporation to sell, rent or mortgage his/her unit
  • Purchaser does not need consent of the other co-owners or Co-ownership Corporation to sell, rent or mortgage his/her unit. (Only a few Co-ownerships require a financial approval.)
  • Sale of unit is subject to receipt of an estoppels certificate which identifies any outstanding or pending payments, assessments or legal actions, re: the unit or Corporation
  • Sale of unit is subject to receipt of an estoppels certificate which identifies any outstanding or pending payments, assessments or legal actions, re: the unit or Corporation
  • Condominium Corporation has yearly audited financial reports issued to all owners and is managed by a professional Management Company.
  • Co-ownership has yearly audited financial reports issued to all owners and is managed by a professional Management Company

 

 

 

Vicki Borenstein, Broker of Record

Direct Line: 416-566-7795

Vicki@VickiBorenstein.com

www.VickiBorenstein.com

Vicki Borenstein Real Estate Inc.,

2 Bloor Street West, Suite 700, Toronto, On. M4W3R1

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *