What to Know Before Buying a Condo in Nova Scotia: A Buyer's Checklist

Buying a condo is different from buying a house. You own your unit, but you also share a building and its costs with other owners, and you are bound by rules the condo corporation has made. What you are really buying includes the health of that corporation.

This article lists what to check before you make an offer, how resale and new units differ, and what happens at closing. Details vary by building, so use this as a starting point for questions.

This article covers the law of Nova Scotia.

How a condo purchase differs from a house

With a house, you mainly care about the property and its condition. With a condo, you also care about the rules, the budget and the savings of the corporation, because those affect what you pay and what you may do in your unit. The province lists several documents you should see before you buy.

The rules for houses differ, and the condo-specific points in this article do not apply to a house purchase.

Documents to ask for before you buy

Condo buyers should get these before buying:

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

Read them for use limits too. The province says to ask whether the declaration prohibits any use, such as pets or running a business. If you plan to rent the unit, work from home or keep a pet, that question matters before you offer.

The reserve fund and the building's finances

The reserve fund is the corporation's savings for major repairs. The province suggests asking whether a reserve fund study has been conducted, whether finances match its recommendations, what the reserve fund balance is, and whether major repairs are expected.

A CMHC summary describes the funding rules: 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. Funding rules can change over time, so it is worth confirming the current rules for your building with a lawyer.

A thin reserve can mean higher fees or special charges later. A lawyer can help you read the figures in light of the building's age and condition.

Resale units and new units

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.

On a new unit, the ten-day right applies if the documents materially affect enjoyment of the property and the vendor will not fix or waive the issue. Rescission must be in writing and in the vendor's hands within the ten-day cooling-off period. Whether any similar right applies to a resale unit depends on your situation, so it is worth confirming with a lawyer before you sign. The developer's lawyer also holds in trust money equal to 10 percent of the budget from the first unit's sale, to cover first-year costs that exceed the budget by more than 10 percent.

Closing costs and your lawyer

Buyers also pay a separate fee to record the deed. Municipal deed transfer tax is a separate municipal tax with rates set by each municipality, and it is collected through Land Registry when the deed is registered. The purchaser files the Municipal Deed Transfer Affidavit of Value.

If any buyer is not a resident of Nova Scotia, a provincial non-resident tax may also apply to residential property with three dwelling units or less. Most documents are submitted electronically by authorized lawyers, and the province recommends a lawyer for real property transactions, including identifying the correct PID and matching the legal description to the parcel.

What to do next

• Ask the listing agent or seller for the condo documents before you write your offer.
• Make a resale offer conditional on receiving an estoppel certificate.
• Read the reserve fund information and ask about expected major repairs.
• Check the use rules against your plans for pets, rentals or a home business.
• Have a lawyer review the agreement before you sign.

Frequently asked questions