Glossary for the purchasing process of a new condo

Co-ownership, down payments, fractions, HBP, transfer or “welcome” tax, the purchase of a new condo has its share of specific terminology, which may seem confusing to the novice. As such, we have put together this glossary so you can become well versed in the subject matter.

a

After-sales service

To ensure complete satisfaction, our after-sales service team is responsible for guiding buyers through each step of the purchasing process.

To read more on the subject:

Customer satisfaction

b

Board of directors or condo association

Made up of co-owners appointed during a general meeting, the condo association is responsible for managing the property. Decisions are made democratically: during general meetings, each co-owner is entitled to a number of votes based on the relative value of their condo.

To read more on the subject:

Divided Co-Ownership 101

The ABCs of Co-Ownership Life

c

Co-ownership fees or condo fees

Condo fees are paid monthly by each co-owner. These fees serve to cover the cost of running the building, and are calculated for each unit based on the relative value of your share or fraction.

Common areas

In a divided co-ownership, the common areas are shared by all owners. This may include corridors, elevators, but also urban chalets, fitness centres or pools. Prével was one of the first developers to focus on these areas to create living environments with residents in mind.

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Our expertise

Conseil d’administration ou syndicat de copropriété

Formé de copropriétaires élus lors d’une assemblée générale, il s’occupe de la gestion de la copropriété. Quant aux décisions, elles sont prises comme dans une démocratie : lors des assemblées, chaque copropriétaire dispose d’un droit de vote qui est fonction de la valeur relative de votre condo.

To read more on the subject:

A Project For Every Budget

Construction

The construction phases of a new condo project include, among others, the foundation, structural, envelope and finishing work.

To read more on the subject:

The Phases of Construction

Contingency fund

Established by the board of directors of the co-ownership, the contingency fund is a sum of money set aside to cover any future building upkeep of major renovations. Each co-owner must contribute annually to the fund.

To read more on the subject:

Divided Co-Ownership 101

The ABCs of Co-Ownership Life

d

Delivery date

The date on which you take possession of your unit.

To read more on the subject:

A Project For Every Budget

 

Divided condo or co-ownership

A divided co-ownership means that you are the owner of a share of the building’s common areas (e.g. elevator, terrace, etc.), while your condo or private area is exclusively yours. Contrarily to an undivided co-ownership, your apartment has its own lot number with cadastre and its own school and municipal taxes. You can also sell or mortgage your property as you please.

To read more on the subject:

Divided Co-Ownership 101

The ABCs of Co-Ownership Life

A Project For Every Budget

Down payment

We require a 15% to 20% deposit of the total unit price paid in three instalments: the first is due when signing the contract, the second three months later, and the third three months after that.

To read more on the subject:

A Project For Every Budget

f

Finishes

Every condo project offers co-owners a selection of unique finishes to personalize their home. This includes flooring, cabinets, countertops, and ceramic tiles.

To read more on the subject:

Selection of Finishes 101

Fraction

The relative value of your fraction (your unit in proportion to the property as a whole) determines, among others, your number of votes and your condo fees.

To read more on the subject:

Divided Co-Ownership 101
A Project For Every Budget

 

h

Home Buyer’s Plan (HBP)

The HBP program allows buyers who have not owned a property in the last four years to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) without penalty to buy or build a qualifying home.

Buyers then have 15 years to pay back the withdrawn funds.

To read more on the subject:

A Project For Every Budget

 

 

m

Management company

Initially chosen by Prével, the management company is responsible for maintaining common areas and overseeing operations. The board of directors made up of elected co-owners can then opt to keep the same management company, replace it with a different one, or manage the condo themselves.

To read more on the subject:

Divided Co-Ownership 101

 

Mortgage loan

The amount lent by the bank to buy your condominium. You must pay back this loan according to the frequency (monthly, bimonthly, etc.), term, and interest rate agreed upon with your bank.

To read more on the subject:

A Project For Every Budget

 

Mortgage loan insurance

Banks will lend up to 80% of the purchase price of a home. If your down payment is less than 20% of the purchase price, you must get mortgage loan insurance. This premium is added to your mortgage loan and the insurance policy is subject to a 9% tax, which must be paid on the day you close the sale.

To read more on the subject:

A Project For Every Budget

Municipal and school taxes

These taxes will vary according to the value of your property and the rates determined by the city where you live.

To read more on the subject:

A Project For Every Budget

o

Off plan condo

A condo that is purchased before it is built. The buyer relies on the project plans, model units, photos and 3D renderings to choose their unit.

To read more on the subject:

The Benefits of Buying Off Plan

s

Sales tax

As with most products and services, the purchase price of a new home is subject to GST and QST, which is just under 15%.

To read more on the subject:

A Project For Every Budget

t

Transfer or “welcome” tax

Every new owner must pay a municipal property transfer tax in the months following the purchase of their home. The amount will vary according to the purchase price of the residence and the municipality where the property is located.

To read more on the subject:

A Project For Every Budget