When shopping for an apartment, you must find out if it is in a divided or undivided co-ownership. Even though both concepts are similar in that their ultimate goal is the partition of an immovable between several persons called co-owners, the financial and legal commitments are different.
By purchasing a condo (apartment) in a residential tower, you automatically become an owner in a vertical co-ownership. You can also be in a divided co-ownership, if you purchase a house (semi-detached or townhouse), built on the same lot than other individual homes. It is then called a horizontal co-ownership.
The essence of divided co-ownership (condo) is to divide the building into private portions for the exclusive use of a co-owner, and into common portions for the common use of all the co-owners or of one or more co-owners.
The private portions are the fractions of the immovable in which the co-owners have an exclusive right of property. They are described in the part of the declaration of co-ownership dedicated to the cadastral description of the fractions. These portions are physically identifiable. It can be an apartment, a parking space or a parcel of land in the case of townhouses. Each private portion has its own cadastral designation.
The purchase of a condo gives you easier access to property, on account of lower costs compared to a single family home. Young couples and tenants take advantage of this formula. An increasing number of them opt for condo life, which allows them at last to become owners.
You have taken the decision to purchase an apartment in a co-ownership. It is often an excellent investment and an easy way to have access to home ownership. In many instances, it will be the investment of a lifetime.
You have found the apartment of your dreams. At last, you will buy the property you have coveted. But before signing the offer to purchase, nagging doubts are in the back of your mind, you have many questions:
It is indeed a rare occurrence when a buyer pays its condo, in one single payment. Most of them must obtain a mortgage loan to finance their purchase. What are the criteria and conditions to get a mortgage loan? Whom should you get it from? Banks, credit unions or other sources? What are the policies of the major financial institutions in this market? What are the limitations when planning the financing of your new property?