What Should a Lawyer Check Before You Buy a Condo in Nova Scotia?

Buying a condominium is different from buying a house. You are buying your unit and also sharing ownership of common areas and a corporation's finances and rules. A lot of what matters is in documents you may never have seen before.

This article walks through what Service Nova Scotia and other sources say condo buyers should collect and ask about, so you know what to bring to your real estate lawyer and what to raise before you sign or firm up an offer. It is general information, not advice on your own purchase.

This article covers the law of Nova Scotia.

The documents to get before you buy

Service Nova Scotia says condo buyers should get several documents before buying. Ask for them early, since reading them takes time and they may raise questions.

• The declaration
• The bylaws
• The common elements rules
• The reserve fund status certificate
• The audited financial statements

Hand everything you receive to your lawyer. The province also advises having a lawyer review the agreement before you sign.

Check what the declaration allows

The declaration can limit how you use your unit. Service Nova Scotia says to ask whether it prohibits any use, such as keeping pets or running a business.

If you plan to work from home, rent the unit out, or bring a pet, read these rules before you make or firm up an offer. A rule that conflicts with your plans is much easier to deal with before you are committed.

Resale units: the estoppel certificate

For a resale condo unit, the province advises making the offer conditional upon receiving an estoppel certificate. A condition is a term written into your offer, so how it would work in your situation is worth confirming with your lawyer before you sign.

On a resale, the estoppel certificate must state the corporation's insurance coverage: fire insurance, public liability and directors' liability insurance, and the amount or value of each policy. Have your lawyer check that these are all listed and that the amounts make sense.

The ten-day rescission right the province describes applies to new units bought from the declarant, so do not assume it carries over to a resale. Whether you could cancel a resale deal depends on your agreement, so confirm it with a lawyer before you firm up your offer.

Reserve fund questions to ask

The reserve fund pays for major repairs and replacements to common elements. Service Nova Scotia suggests asking these questions:

• Has a reserve fund study been conducted?
• Do the corporation's finances match the study's recommendations?
• What is the reserve fund balance?
• Are any major repairs expected?

CMHC's Nova Scotia fact sheet describes the funding rules this way: corporations with fewer than 10 units must keep the reserve fund at 100 percent of the amount assessed annually, while those with 10 or more units base contributions on a reserve fund study covering at least 20 years, and the fund must be fully funded within five years of creation. That summary is several years old and the condominium legislation has since been revised, so ask your lawyer to confirm the current rules.

New units bought from the declarant

Buying a new unit from the developer (the declarant) has some extra protections. You have ten days to rescind if the documents materially affect your enjoyment of the property and the vendor will not fix or waive the issue. The rescission must be in writing and in the vendor's hands within the ten-day cooling-off period.

On new developments, the developer's lawyer holds in trust money equal to 10 percent of the budget from the first unit's sale. The corporation can claim against it if first-year costs exceed the budget by more than 10 percent.

A new home warranty is not required by law in Nova Scotia. Some builders offer a warranty or provide one through a third-party home warranty program. If a warranty matters to you, ask the builder in writing what is included.

What to do next

• Ask for the declaration, bylaws, common elements rules, reserve fund status certificate and audited financial statements
• Read the declaration for limits on pets, rentals or home businesses
• On a resale, make your offer conditional on an estoppel certificate
• Check the insurance listed and the reserve fund answers
• For a new unit, note the ten-day deadline and put any rescission in writing
• Have a lawyer review the agreement before you sign

Bring your questions and any documents to your lawyer before you firm up your offer, not after.

Frequently asked questions