Contents

The Complete Guide to Buying a Condo in Toronto

Buying a condo in Toronto can be a stressful undertaking. It’s an expensive market with a lot of competition. To help ease the burden and make the process go as smoothly as possible, we’ve created this comprehensive guide.

You’ll find information pertaining to each element of the condo-buying lifecycle. From beginning your search to handling the ongoing expenses of your new home, this guide outlines everything you need to know about buying a condo in Toronto.

Buying a new condo: the search begins

This section of the guide provides advice that makes the condo-hunting process efficient and painless. It helps ensure you find a condo you love by identifying tips to follow and common mistakes to avoid.

Setting your price range

Before you set out condo hunting, it’s important to identify the amount you’re able and willing to spend. This won’t just help you set realistic expectations, it will also save you a lot of time, since you won’t be looking through listings or attending open houses for units out of your range.

How do you accurately determine your spending limit? It can be a little tricky. The important thing is to understand how much your new home will cost - not just in terms of sale price, but inclusive of the additional and associated fees of purchasing and owning a condo unit.

We’ll get into these expenses in the subsequent sections, but here’s a brief overview to give you an idea of what these costs entail:

  • Down payment
  • Mortgage
  • Mortgage insurance
  • Mortgage interest
  • Land transfer tax(es)
  • Agent/legal fees
  • Moving costs
  • Condo fees
  • Utilities
  • Renovations, repairs and maintenance
  • Insurance coverage

Not all of these costs are applicable to every transaction, but the breadth of the list should get the point across: when you buy a new condo, the cost invariably exceeds the sticker price.

Be aware of the total cost of your purchase when setting a price range. It may help to talk it over with a real estate agent, as they will provide estimations for different charges. Having this knowledge early on in the process will help you avoid unwelcome surprises - e.g. getting declined for a mortgage - and prepare you for the financial pressures of home ownership.

Regulatory restrictions to know

In 2017 and 2018, the federal government put in place wide-sweeping changes to the regulations that govern mortgages. These regulations were primarily introduced to combat Toronto’s runaway housing market and artificially low interest rates. Known as a "stress test," these regulations are meant to insure that anyone who buys a new home will be able to keep up with mortgage payments if interest rates increase by 2%, or reach the BoC's prime rate, whichever is higher.

While 2% may not seem like a lot, it really adds up over the amortization period of a mortgage, and thus makes procuring the mortgage significantly more difficult. It also means there is a stricter limit on the value of a condo you're able to purchase, based on your income and debt.

Because the borrowing power you have is very much determined by your own financial situation, providing examples here will give you little information of value. Instead, we advise you talk to a bank, mortgage broker or real estate agent to determine what exactly the new stress test means for your chances of buying a new condo in Toronto. Because even if you believe you're in a place to afford a $750,000 home, it's what mortgage lenders think that actually matters.

Identifying your ideal condo

Choosing the right condo means different things to different people. What makes a “good home” is a personal and subjective thing, so there’s no way we can offer you a comprehensive guide to ensure your satisfaction. Instead, we’ll touch on some of the major considerations that should be at the forefront of your decision-making process.

  • Size: Bigger isn’t always better, especially when square footage in the GTA comes at a premium. But it is, of course, important to have enough room. Whether you like it cozy or spacious, take the space of a unit into consideration. Also be sure to consider what you can do with the space. It’s amazing how much roomier one condo can feel than another of the same size. Layout really matters.
  • Unit features: Conventional house-hunting wisdom states that it’s a good idea to make a list when you start out, defining what’s a must-have, and what’s a nice-to-have. This is a good idea, since it helps you limit the scope of your search. For example, if you must have an in-home washer-dryer, you can look only for units matching that criterion. If you want a spa-style tub, you can look for that feature without completely discounting units that lack it. Making a list of this nature is tremendously helpful, but don’t feel beholden to it; if your must-haves turn out to be too expensive, or your wants evolve into necessities, update your list - getting it right is better late than never.
  • Condo amenities: Most new condos come with a litany of amenities, like patios, barbeques, gyms, outdoor pools, children’s play areas and more. As with unit features, decide which you need and which you want, and limit your search to buildings that match up. But remember, condo fees pay for these amenities. If communal features don’t matter to you, a building with few communal amenities might be the way to go.
  • Outdoor space: If a balcony is essential to you, consider the size and layout of each unit’s exterior. Also consider which way the balcony faces - east gets sun in the morning, west gets it at night. If you want outdoor space, but don’t care about a private area, consider a building with shared space, such as a patio or outdoor lounge. Balconies cost money, so if you’re indifferent, going without is a good way to save.
  • Decor and style: Perhaps the most subjective of all, the interior design and layout of the unit will strongly influence your opinion of each potential home. Something to remember is that there are certain things you can change in condos and others you can’t. Understanding which renovations the condo board will allow lets you determine whether an unwanted or missing element is an extra cost or a flat out deal-breaker.

This list merely identifies common things condo-hunters prioritize. Your own set of priorities may be different, and that's fine. The important thing is that you set your priorities early on so you can act decisively when the right opportunity comes along.

Choosing the right location

Toronto may be a single city, but it's composed from an amalgam of housing markets. What goes in Parkdale doesn’t go in The Core, which doesn’t go in The Beaches.

Formulating an idea of the neighbourhood(s) you want to live in is strongly advised because it informs some key decisions. For example, when it comes time to choose a real estate agent, you’ll want someone knowledgeable about your area of interest, and you can’t find that person unless you know where your interest lies.

Honing in on certain markets will also help you establish realistic expectations for your budget. Your concept of cost will be way off if you look at listings for two-bedrooms in Scarborough when you really want to move to The Core. Prices vary dramatically among the city’s neighbourhoods, and localizing your search will help you understand the market(s) that matter to you. That’s why it’s important to check out neighbourhood profiles (examples linked above) when you’re looking to move to a new part of the city.

Using online condo listings

Listings are the natural place to start your condo search. They're great because they let you set parameters, like a price range or location.

Searching Google for “Toronto condos” is the obvious place to start, but keep in mind that the different databases you find may have different offerings and functionalities. Not all are created equal.

Once your search becomes a bit more serious it’s a good idea to get in touch with a real estate agent. While there’s no harm in continuing a simultaneous manual search, an agent will help you search more efficiently, using their experience to find the places that match up with what you’re looking for.

Working with a real estate agent

It's entirely legal to buy a home without representation from a real estate agent, but doing so forfeits access to a great deal of knowledge, experience and negotiating leverage. This section provides advice for choosing the right agent, and explains the perks of working with an agent throughout your condo hunt.

Finding a real estate agent

It’s not challenging to find a real estate agent. When ads are plastered over benches and buses, you’re hardly at a loss. But even though the sheer volume of options out there makes it easy to find an agent, it simultaneously makes it difficult to find the right agent.

You have to narrow your search. Look for agents that operate in the neighbourhood(s) you’re looking to buy in. Googling terms like “real estate agent Yonge-St. Clair” may be more useful than “real estate agent Toronto.”

From there, much of the choice comes down to logic. For example, you’ll want to sift out those that don’t have much of a presence in the area. You’ll also want to be wary of those with websites that look like they were last updated in 1998.

If an agent is easy to find online, has recent marketing material and operates where you’re looking to buy, they may be worth your consideration. But even then you may be facing numerous options.

The main alternative to finding an agent online is through a referral. If you know someone that recently bought a place in the area you’re interested in, you can ask them about their agent. The same holds true if you know a local agent personally, like a friend or family member. But even in these cases due diligence is required.

Choosing the right real estate agent

You have a lot of options when it comes to real estate agents. How do you distinguish between them?

We've touched on some ideas already, like current marketing materials and quality websites, but while these things often represent professionalism and success, they are only superficial. To really feel confident that an agent is capable and has your best interests at heart, the best thing you can do is meet them in person.

Setting up an interview will give you the chance to ask questions and get a sense of the way an agent operates. This list of questions is worth asking because it will reveal the agent’s style, their recent track record, whether they have the team and resources to give you their full attention, and whether they know the local market.

It's also important to ask whether the agent has any questions for you. An agent that’s eager to learn about your wants and needs is more likely to find the right home, plain and simple. If they spend 20 minutes marketing themselves without spending time to learn about the job you’re hiring them for, they think of you as a lead, not a client.

You should take time to meet with an agent, even if they come personally recommended. Just because they did a good job for your friend doesn’t mean they’re right for you.

Beyond talking with different agents to determine which ones will provide the best possible service, the other major consideration is cost. While the seller of the condo will pay your real estate agent’s commission, the size of their commission may play a role in determining whether the seller accepts your offer. You will also be required to pay additional, non-commission fees.

Most real estate agents charge about 5% commission. However, the precise rate is usually negotiable. It’s important to feel comfortable with the agent you choose, but you'll also want to make sure you’re not overpaying.

Why work with a real estate agent?

Agents cost money, but they’re always worth it. Buying a home is a massive financial transaction and the process is rife with complexities. This section breaks down the key services that agents provide when you’re looking for a new condo.

During the condo search

The majority of condo hunters begin with MLS listings. By offering a comprehensive list of homes available in the area(s) you’re looking to buy, these listings make a natural starting point.

But while this list can start a buyer out on the right foot, it's far from the only tool available. If your entire approach is to scan through these listings, you’re making the process more difficult and time-consuming than it needs to be.

Rather than scouring the listings and checking back every day to see what’s new and what’s off the market, you can simply define your criteria to an agent and let them do the leg-work. A good agent will learn your needs and expectations during the early stages of the search, and track down potential matches. They'll then alert you when a condo meets your criteria, while screening out those that don't.

Education and advocacy

Beyond helping to find what you’re looking for, a real estate agent should get to know you as a client. This process involves both learning your priorities and helping you establish realistic expectations based on your finances and borrowing power.

The agent should also function as your home buying tutor. If you have questions about the process, taxes, legal fees or any other aspect of condo-hunting, your agent is the person to ask.

Once you’ve found the right place

Your real estate agent should leave no stone unturned. They’ll complete an extensive search and relay all of the available condos that match your criteria. Once you've looked over your options, you'll have the opportunity to view condos in person.

During your visit to a property, your real estate agent will provide you with all the relevant facts and details, laying out the advantages and disadvantages of the building and its location. They will show you the home's desirable features, elements that may require maintenance, and answer any questions that spring to mind. If there’s something they can't answer off hand, they'll make it their business to find out and get back to you.

Preparing to make an offer

A real estate agent is your greatest advocate throughout the home buying process. They understand key concepts, such as home values, market fluctuations and sales conditions, and use this knowledge to strengthen your bargaining position.

The agent will advise whether the condo unit you want is a reasonable price, relative to the market, and assist with determining your offer. The agent will also provide you with an accurate estimate of how much the home will cost inclusive of mortgage interest, maintenance and upgrades, legal fees, condo fees, inspections and taxes.

After signing a purchase agreement

The best real estate agents don’t say goodbye once the purchase agreement is signed. They do everything they can to resolve any problems with the property to the buyer’s satisfaction. Whether this means examining legal recourse in the event of a dispute, or simply finding the most efficient and cost-effective solutions to issues that arise, the agent should continue to work on your behalf.

How much do agents cost?

Technically, the seller is responsible for paying the real estate agents - both their own and the buyer’s. Of course, this fee may be factored into the sale price of the home. Therefore, in a roundabout way, the buyer may end up paying for their own, or both, real estate agents.

Typically, a real estate agent will charge about 5% of the sales price. There may be other costs that buyers are responsible for, like legal fees, but this will vary from case to case.

Buying the condo you want

Once you’ve honed in on a condo that ticks all the boxes, it’s time to buy. This section will help you navigate the process of making an offer, and planning your finances for homeownership.

Making an offer

Buying a condo isn’t like buying bread from the corner store. You don’t just look at the price tag and hand over your money; there’s a lot that goes into determining the value of your offer. Common factors to consider when purchasing a condo include:

  • The property condition: will the buyer need to pay for repairs?
  • Were any improvements recently made: not only does this mean better features, it means imminent repairs and maintenance costs are lower.
  • Market conditions: is the location in demand? How do other units and buildings compare?
  • Seller’s motivation: how eager is the seller? Do they have the luxury of waiting until a great offer comes or are they looking at a hard deadline to sell?
  • Competition: is there a bidding war, or is interest low?

A realtor is an invaluable resource when deciding the amount you’ll offer. They have data and experience sizing up property value and understand whether the asking price is reasonable, high or a steal.

When buying a condo unit, comparables are essential. Is another unit in the building up for sale? Did another one recently sell? If so, was it the same size as the one you’re looking at?

Of course, you can’t always take a previous sale to represent current market value. Markets in Toronto are volatile, so what happened a year ago has little bearing on what happens today. Stick to recent history - the past three or four months - when comparing.

It’s also important to acknowledge that some factors may have changed, even within the past couple months. For example, maybe when a couple of units sold two months ago, they went for $500,000 because buyers had options. This time around, there’s just one unit available. Now the seller has leverage, and the buyer will have to pay more.

Determining the amount you will offer is a fine balance between overpaying and being outbid. It requires research, planning and weighing your personal interest in the home.

Understanding the full cost of your offer

If you offer $500,000 for a condo unit, be prepared to spend a great deal more than $500,000. There are numerous auxiliary fees involved in buying a property, which we'll break down later in this guide. For now, just keep in mind that it’s important to budget for more than a down payment and mortgage.

Making a down payment

The initial major expense of buying a condo is called the down payment. This section explains how a down payment works, and gives advice for determining how much to pay.

What is a down payment?

A down payment is the money you pay upfront for a condo. If, for example, you buy a condo unit for $700,000, your down payment would be a just a portion - say, $100,000 - with the amount owing being paid via your mortgage loan.

How much is a down payment for a condo?

Your down payment will be determined by a few different factors. Most prominent among those factors is the sale price of the condo. In Canada, a down payment must be at least 5% of the total price, though in Toronto, it’s almost always more than this. In most cases, a down payment will range from between 10-20%.

As an example, if you were to purchase a condo for $450,000, you would be legally obligated to make a down payment of at least $22,500. However, you could opt to make a larger down payment if you wished.

What’s the best down payment I can make?

All financial situations are different, but generally speaking, large down payments are better than small ones. This is the case for two main reasons: 1) a larger down payment means a smaller mortgage, which means fewer payments and less interest, and 2) down payments of less than 20% require the buyer to purchase mortgage insurance, which adds to the overall cost of the purchase. Over the life of the entire mortgage, the cost of this insurance can run you several thousands of dollars.

Getting a mortgage

Once your offer is accepted and your down payment has been made, you'll need a mortgage to pay for the amount owing on your condo. This section examines how mortgages work, and delves into the important terms and conditions all homebuyers should be aware of.

What is a mortgage?

A mortgage is a loan that's used to pay for a property. A borrower will usually acquire their mortgage in one of the following ways:

  • Applying online
  • Visiting a bank/lender for a consultation
  • Talking to a mortgage broker

Mortgages are secured against the property you are purchasing, because in essence, you're buying the home back from your mortgage lender. If you start missing your scheduled loan payments, which are negotiated at the beginning of your mortgage term, your lender can legally repossess the house they helped you buy, as well as any other property tied to the loan as a security.

Mortgages in hot condo markets like Toronto are usually at least a few hundred thousand dollars, but can escalate into the millions, depending on the purchase price (and down payment) of your unit. Saving for a large down payment will help you pay off your loan faster, as can negotiating optimal mortgage terms, like repayment schedule and interest rate.

What is a mortgage term?

Mortgages can be understood as both a loan and a legal contract between lender and borrower. Contractual obligations are legally binding and both parties entering into the agreement must be explicitly aware of the document’s clauses.

Real estate lawyers are crucial. Having a lawyer on your side will allow you to better understand complicated legal terms and definitions before you agree to terms with your lender.

The mortgage term is one such section that requires comprehensive understanding. It refers to the length of time that your contract is valid. Your lender can offer a mortgage term ranging from 6 months to 10 years; most Canadians settle on a five-year term.

After that five-year term expires, you're able to either renew your mortgage with the same financier, either under the same or renegotiated terms, or pick a new lender.

What is a mortgage amortization period?

The mortgage amortization period is the time it takes to pay off the principal of your loan, as well as the accumulated interest - i.e. the full amount of your mortgage.

A portion of your mortgage payments go toward paying the interest on your loan, while the rest goes towards paying down the principal sum. As you reduce the principal, your interest decreases alongside it. At the conclusion of the amortization period, your mortgage will be paid off in full. The shorter the amortization period is, the less interest you pay, but the higher each payment will be. The standard amortization period is 25 years.

Fixed vs variable mortgage

One of the key decisions a homebuyer must make is whether to select a fixed or variable mortgage. A fixed rate means that the interest stays the same for the duration of the mortgage term. A variable rate (also known as a floating rate) means that the interest rate is liable to fluctuations, depending on market conditions.

If your lender’s rate, or the Bank of Canada’s rate goes up, the interest rate of your mortgage loan might go up as well. This doesn’t always happen though, and variable rates have historically been a better deal than fixed. Of course, this trend is not guaranteed to continue in the future.

Open vs closed mortgage

Whether a mortgage is open or closed defines the level of flexibility permitted by your mortgage agreement.

When your mortgage is open, it means that you’re able to prepay or renegotiate your loan at any time, without penalty. If your mortgage is closed, you cannot prepay, renegotiate or renew your mortgage earlier than the term defines without penalty.

Closed mortgages will typically have lower interest rates than open ones. Lenders want to know that you’ll stick with them for the length of the mortgage term, and will therefore provide an incentive for choosing the closed option.

Mortgage prepayments

Mortgage prepayments refer to payments that are made ahead of schedule. For example, if your mortgage stipulates a monthly payment of $2,000, making a prepayment would mean you make 13 payments over the course of the year rather than 12. Borrowers may do this to shorten the amortization period of the loan. However, lenders may penalize borrowers for making prepayments.

Prepayment charges can end up costing homeowners (with closed mortgages especially) thousands of dollars over a single term. These charges are enforced because prepayments reduce the amount of interest owed during the mortgage term. In other words, paying your mortgage back quicker means a smaller profit for your lender, and they don't want that.

Consider an open mortgage and/or discussing prepayment options available to you when negotiating the terms of your deal. Sometimes, conditions can be included in an agreement to allow unpenalized prepayments.

How to qualify for a mortgage

To qualify for a mortgage you have to prove to a lender that you’re loan worthy. Essentially, this means that you'll pay them back, plus interest, within the agreed upon amortization period.

Much like any other substantial loan, lenders and financiers will look over:

  • The amount of debt you have
  • Your credit report and credit score
  • Your gross income (before taxes)
  • The size of the mortgage loan you’re asking for
  • How long your amortization period will be

How big should my mortgage be?

Your lender might suggest that the amount you borrow aligns with the amount of debt you have, combined with your income before taxes. The Canadian Mortgage and Housing Corporation’s “gross debt service ratio” (GDS) is a guideline followed by most lenders.

The GDS stipulates that no borrower can take out a loan that would make their monthly housing costs more than 39% of their gross monthly income. However, it's important to remember that no one nets their gross monthly income because Canadians pay income tax.

Next, there's the “total debt service ratio” (TDS), which calculates your total debt and loan payments to see whether you can absorb the financial stress of a mortgage on top of any outstanding loans, like a student loan, car loan and any miscellaneous monthly bills.

In January, 2018, new guidelines were enforced that affected 18% of prospective homebuyers. The new stress test was introduced by the federal government, one that now forces potential buyers to prove that they can handle an interest rate of two percent above the interest rate they qualify for, or, the Bank of Canada’s five-year benchmark rate (whichever is higher). These new rules were implemented to negate the potential of a real estate market crash.

Two percent may seem like a small test, but when you’re talking about condos that cost more than half a million dollars, that’s an extra $100,000 you must prove you're able to pay.

Mortgage pre-approval

Getting pre-approved for a mortgage is essential. Not only does it speed up the buying process, it makes you more attractive to sellers because they have no fear your offer will fall through.

Getting pre-approval involves talking to a bank or mortgage broker before you officially need the mortgage. The meeting uses factors like credit history, gross income, GDS and TDS, to establish what the lender is willing to provide when the time comes. It does not, however, bind you to a lender or a mortgage rate. Think of it as more like a quote.

Real estate costs

In this section, we break down the cost of condo-buying, beyond the down payment and mortgage.

Valuation, inspection and survey costs

Before you make a down payment and start your mortgage, you may incur the fees below prior to purchasing the home

  • A property valuation fee (~$200 or less)
  • Home inspection fee (~$500)
  • A property survey ($750 to $1,000)
  • Legal fees (~$500)

These fees are not always mandatory, but are very common during the homebuying process.

Property taxes

The amount you pay in property taxes will vary depending on the value of your property and your location in the province.

Because property values are so high in major markets like Toronto, you may end up paying thousands of dollars per year in property taxes, every year. This tax is an essential fee of homeownership, so it’s a good idea to look into the averages of your area or talk to your real estate lawyer so you’re prepared.

Land transfer tax

The land transfer tax applies whenever you purchase a property. In Ontario, the land transfer tax is either waived or rebated if you’re a first-time homebuyer.

The land transfer tax will be based on the price of your home and the regulations of your province. In Toronto, for example, you should be prepared to pay both the municipal and provincial land transfer taxes.

Insurance

Condo insurance is available for homeowners looking to protect their property from damage, their person from liability claims, and their contents from theft.

Though insurance isn’t required by law, most condo boards will demand you insure your unit before you’re allowed to move in. This will probably end of costing you a few hundred bucks per year.

The costs of owning a condo

This section of the guide outlines the costs associated with moving into and setting up your condo. Some of these fees are one-time payments, while others are recurring.

Condo fees

Monthly condo fees are part and parcel with condo living. These costs are established by the condo board, paying for the maintenance, upkeep, communal amenities and staffing of your condominium building, as well as its emergency fund. The amount you pay in condo fees is directly correlated with the square footage of your unit. The exact cost per square foot will vary by building. In new buildings, for example, fees tend to be lower because builders want to avoid vacancies.

Moving expenses

Between renting a truck and buying boxes, moving can be expensive. To keep costs down, you can always enlist help from family and friends. But if you can't sucker anyone in, you can hire professionals to get the job done.

You can expect rates from expert movers to be as much as $125 per hour, while some independent movers can be found through online classified sites like Craigslist for a little as $30 per hour, including a van.

Parking fees

If you buy a unit in a condo that has its own garage, you may be able to purchase a parking space. The cost of the parking spot will vary greatly depending on the location of your building, but on average, you can expect to pay $150 to $300 per month to rent the spot, which translates to $1,800 to $3,600 per year.

If you’d like to include a parking spot in the purchase price of your condo unit, and your building allows it, you can expect to pay anywhere between $26,000 and $50,000 to have ownership. Even if you move, some buildings will allow you to keep the parking spot, sell it, or rent it out afterwards.

Storage

Storage lockers are usually included in the Purchase Agreement of your condo purchase, while some buildings include the storage locker in the cost of a parking space. Others allow you to purchase or rent the storage space on an as-needed basis.

The cost to rent could be as little as $50 per month, but the purchase of a storage space as an investment could cost as much as $5,000 in downtown Toronto.

Utilities, internet and cable hookups

Assuming you want heat and electricity - which, we're going to go ahead an assume you do - you'll need to pay bills that recur in perpetuity. There’s utilities to consider, which can run close to $200 monthly. There’s also installation fees for services like cable and internet, which will usually add up to about $100-150 bucks, depending on the packages you select. Then, of course, there's the monthly fees that follow, though you're likely to be paying those regardless of where you live and whether or not you just moved in.

Tax Rebates, Refunds & Credits for Condo buyers

This section of the guide explores opportunities to save money when buying a condo. Talk to your real estate agent or lawyer to determine whether you're eligible for any of the savings mentioned within our guide.

First time home buyer tax credit

This non-refundable credit helps home buyers recoup some of their closing costs, which may include legal inspections and home inspections. If you qualify as a first-time home buyer, you can claim up to $5,000 on your personal tax return for your purchase year. In terms of actual savings, you could receive about $750 as part of your return.

To qualify, you cannot have lived in a home either you or your partner owned within the previous four years. If you are eligible for the disability tax credit and/or have purchased the home to improve accessibility, you do not have to be a first-time home buyer to receive this tax credit.

GST/HST new housing rebate

This incentive provides a rebate on some of the GST (federal tax) and/or HST (GST + PST) you paid for your new home, provided it is your primary residence and you’ve met all eligibility requirements.

Land transfer tax refund

As a first-time home buyer - e.g. you and any co-owners have never purchased a home before - you can qualify for a refund on your land transfer taxes for the first $368,000 of the home. The maximum refund is $4,000.

Municipal land transfer tax rebate

If you're a Canadian citizen or permanent resident living in Toronto, you can register for the land transfer tax credit when you're ready to buy your first home. You can couple this municipal rebate with the provincial refund and recoup up to $4,475 of the land transfer tax. Your application must be received by the City of Toronto before a 10-day deadline expires, so make sure to stay on top of your due dates.

Insuring your condo

If you think insurance is simple, think again. There's no single catch-all policy that's makes a condo owner invulnerable to damage or liability; you need to understand which type of policy protects what. This section of the guide will provide the necessary education, so you can confidently protect your home and possessions.

Condo board insurance

“I don’t need condo insurance because my condo board provides coverage.”

It’s a mistake a lot of people make. While every condo board (we hope) has insurance for the building, their policy doesn’t protect your unit or any of the stuff inside it.

What it covers

  • General areas
  • Shared amenities
  • Structural elements

This means that if a delivery person slips and falls in a hallway, your condo’s insurance covers the liability. If an elevator is damaged, that’s covered too. If pipes burst, or termites chew threw a tenant’s wall, or an elephant escapes from the Toronto Zoo and stampedes through the courtyard - that’s all under the condo board’s coverage.

What it doesn’t cover

  • Damage caused to your unit
  • Liability within your unit
  • The contents within your unit
  • Damage you cause to neighbouring units
  • Damage or injury caused by your pets

In order to get protection from these potential expenses, you’ll have to have your own insurance policy. Exactly what that policy entails depends on whether you rent or own the unit, and whether or not you have tenants.

Personal condo insurance

If you own the condo unit, you’ll need condo insurance. Though it's not a legal requirement, most condo boards in Toronto will need proof of insurance before letting you move in.

What it covers

Much like homeowners insurance, condo insurance will protect your property and possessions from a gamut of hazards. Depending on your policy, you’ll typically be covered against damage (like fire, smoke or water) to contents and personal possessions; theft; damage during upgrades; personal and premises liability; and storage locker protection. Additional coverages are negotiable.

What it doesn’t cover

Your personal condo policy, which provides protection for the items within your unit proper, will not extend into the shared spaces of the building as a whole. It also does not cover damage caused to, or by tenants renting the condo unit from you. If you rent the unit out, you'll need landlord insurance.

Landlord insurance

As a condo owner and landlord, you’ll need to have a landlords insurance policy that protects your property. You can also require any tenants to have their own insurance policy for personal contents and liability coverage.

What it covers

Typically, landlords insurance will cover any damages made to improvements on your property, from new flooring to fixtures to countertops.

Next, the premises will be covered for liability in case someone gets injured on the property and decides to sue you for negligence.

Any contents that you provide for your tenant’s use can also be covered, including furniture and appliances.

If damage occurs (like a fire) that prevents you from receiving income from your rental unit, your landlords insurance policy will reimburse you for as long as the condo unit remains inhabitable.

What it doesn’t cover

Landlords insurance will not cover any of the tenant’s personal possessions or provide liability protection for them or their guests. To ensure that all parties and possessions are protected, you may require your tenants to have an insurance policy of their own - i.e. renters insurance.

Renters insurance

If you're renting a condo unit from a landlord, the insurance policy you'll need is renters insurance. This mostly covers liability and personal possessions. It is the cheapest form of property insurance.

What it covers

Renters insurance (also known as tenants insurance) covers damage to their personal property and provides liability protection for themselves and their guests. In the event that the rental unit becomes inhospitable, many of the expenses incurred, such as the cost of a hotel room, will be covered by your renters insurance policy.

What it doesn’t cover

Renters insurance will not cover accidental losses (such as misplacing your phone); damages caused by pets or neglect; rare items or collectibles; your roommate’s or guest's possessions.

Since renters coverage is individual, anyone sharing the unit with you will need to have their own policy.

Customizing your condo unit

This section of the guide examines what can and cannot be renovated in a condo building. Do be aware that not every building has the same rules; the information provided within this section should be considered general.

What can be renovated?

There are limitations on what can be renovated in a condominium. Space is finite, which makes total overhauls challenging, and major changes have to be approved by the condo board.

Common areas and elements

Even though you own your property, you don’t necessarily own all of the structural aspects in your unit - these things are owned by the condo corporation. Usually this includes things like supporting walls or columns, which are often vital to the structural integrity of the building. Common areas also include the hallway outside your unit, your front door, exterior windows and balcony. You cannot renovate these areas without

Renovating any of these areas without expressed permission can lead to a number of undesirable issues, including being forced to pay to have the alterations changed back to their original form.

Plumbing and electrical work

The structure of a condo building plays a huge role in how much work you’re able to do to the more technical aspects of your unit, including plumbing and electrical work. Plumbing systems and drainage are often built to service more than one apartment, which means changes can impact your neighbours as well. If you have a big bathroom overhaul in mind, it's a good idea to speak with your condo board before you plan anything. They may be able to allow you to extend piping surrounding your unit, or alternatively move pieces to the location you desire.

Electrical work is less likely to affect your neighbours, but still must be approved by your condo board. If you hope to add or move any electrical outlets, you may face some limitations.

Building materials

Some condo buildings will have rules concerning the kind of materials you can bring into the building. For example, hardwood flooring has been known to cause problems with vibrations and noise levels. Some condo boards may even be concerned about introducing materials that do not go with the overall “aesthetic” of the building. As with any renovation, it's best to speak with your condo board before beginning any significant changes to your home.

Ensuring that you obtain the proper permissions before engaging in a renovation may spare you significant stress and financial damages. If you're unsure whether your plans are permissible, ask; when it comes to making renovations in your condo, it's invariably a case of better safe than sorry.

Who decides if renovations can be made?

No matter the building, it's the condo board that approves or rejects a project. So while it may be tempting to start a project before you receive permission, just assuming everything will be fine, this is never advisable. Because different buildings have different standards and rules, don't assume the renovation your friend was allowed to make in their building will be allowed in your building. It's your condo board that makes decisions about your building. Always check with them first.

The first step to gaining permission from your board is to submit a proposal. Get in touch with the property manager and they will fill you in on the approval procedure. You can speed up the process by ensuring you are organized and have all of your plans and paperwork in order before approaching them.

While some projects require a building permit from the city, others do not. Regardless, your condo board must grant approval for work to be performed. Your board may consult other tenants if the renovation may cause noise or debris, but the decision is ultimately their own.

Customization options for pre-construction condos

If you purchase a pre-construction condo early enough, you may have some leeway when it comes to renovations. Because really, renovations to an unbuilt home are not so much renovations, as they are new constructions. Buying pre-con also allows you to determine certain aspects of your condo that buying off the market won't. This section of the guide examines some of these opportunities.

Location of the unit

Where your unit is within a building can actually make a huge difference. While some people dream of having the penthouse suite, others loathe the added requirement of an extended elevator ride to the top of the building, or have accessibility needs that make the ground floor more suitable. You may also be picky about the direction your condominium faces: if you want to wake up to blazing sunlight, an easterly facing window will be the perfect pick.

Layout of the unit

You’re going to be spending most of your time in your unit, so you want to make sure that not only the layout is in line with your desires, but also that it's practical and easy to get around inside. If you’re someone who loves to cook, then a large kitchen with some classic amenities might be the direction to go in. If your bed is your sanctuary, maybe a large bedroom completes the ideal home for you.

Many condominium corporations will offer a variety of layout options, and you may even be able to tweak them slightly if it works for the construction firm.

Like with most home buyers, the number of bedrooms is often the main thing under scrutiny. If you are living alone, a one-bedroom might be enough, but if you’re hoping for the pitter patter of tiny feet soon, you might need to consider a two- or even three-bedroom unit. Naturally, the larger the unit and the more bedrooms it has, the higher the price will be, so it is important to consider your budget as well.

Decor of the unit

Decorating a home is a long, arduous process, but with pre-constructions you can often skip this altogether and move into an already perfectly finished home. Most developers will outline how the decor of the unit will look upon completion. In most cases, they’ll stick with a neutral palette that is tasteful for all residents. In some instances, however, developers may be willing to modify decor to any specification you have, so long as you run it by your property manager first, and let them know in the early stages of planning.

A neutral colour palette is ideal for condominium buyers who plan to rent out their unit at a later date, as this will allow the tenant to accessorize the apartment to their own liking without having to worry about wallpaper or paint.

Some condos also offer the option of upgrading certain features of the unit, so that you can bag your ideal home with minimal effort on your part. Whether it’s a specific type of blinds, or you’re desperate for granite worktops, your condo developer may be able to include optional features or finishes for an additional fee.

Planning your renovation

As soon as you get the green light from your condo board you may be eager to kick off the work right then. However, there will likely be some rules governing the renovation process, including hours of operation, noise levels, maneuvering materials and cleaning up debris. These regulations should be outlined for you, and it's incumbent upon you to ensure that all work meets their standard.

The cost of renovating

Before beginning work on your renovation, your board may require you to get special insurance or pay a deposit to the condo. This is usually to cover potential damage to common elements and areas.

The good thing about a deposit is that if no damage is incurred during the construction process you get your money back. Of course, insurance premiums are forfeit.

The building’s permitted work hours

Most condo boards will outline a timeframe for when work can and cannot be performed - this includes both hours and days of the week. The sooner you find out these specifications, the easier it will be to make plans with your construction team and contractor.

Often, noise will be the main factor restricting working hours, and while many boards will allow work to occur around common working hours of residents, regulations are also determined by the Toronto Noise Bylaw. The Toronto Noise Bylaw only allows the use of construction equipment between 7:00 a.m. and 7:00 p.m., Monday through Friday, and from 9:00 a.m. to 7:00 p.m. on Saturdays. Many condo boards restrict this even further to assuage their residents, often enforcing hours from 9:00 a.m. to 5:00 p.m., Monday to Friday, and no work on weekends.

Reserving parking and elevators

Many renovations require logistical planning. Whether it's the delivery of materials and equipment, or parking the vehicles belonging to the construction team, you'll need to be prepared. This may involve reserving parking spaces or an elevator at different times during the renovation. It may also mean finding space for other equipment, like waste bins.

Materials transport and disposal

Booking an area is just one of the steps involved with moving materials. Many condominiums have their own rules about how materials must be transported and disposed of, and it's vital you adhere to these provisions. This may involve using certain entrances only, and maintaining predefined cleanliness standards.

Your condo board will also outline which materials can be disposed of at your particular garbage zone on-site, and which materials are the responsibility of the construction company. A respectable construction firm will ensure that all materials are disposed of correctly.

Will renovating increase the value of my condo?

Renovating will undoubtedly cost you money, but many people make upgrades to, at least in part, increase the resale value of their home. However, there is no definite answer as to whether a renovation will pay for itself in resale value, or whether it will be a lost investment.

Generally speaking, renovations that involve the kitchen and bathroom have the most upside in terms of resale value, but even then there is no guarantee the alterations won't cost more than the eventual return. Assuming you plan to live in the condo for even just a little while, the primary reason for renovations should be to improve your own living arrangements.