Condos vs Co-ops
Condominium Advantages in Toronto
Condominiums in Toronto are governed by the Condominium Act, which offers protection to condominium owners. Co-ops are not, and are instead governed by rules and regulations drawn up by the corporation and shareholders.
Condominium owners, just like when owning a home, have a mortgage and property taxes to pay, whereas co-ops may instead have one mortgage and tax payment for the whole building. If a problem were to happen and a co-op owner can’t pay, the rest of the owners have to make it up.
Selling your condominium is done using methods and paperwork governed by the Condominium Act, but no such provisions exist for the co-ops. This can make selling your condominium easy, and selling a co-op more tricky.
Anyone can buy a condo, and they can then sell their condo as they wish. Co-op owners must get approval from the Board of Directors in order to sell or rent their condo.
Condominiums are legally required to have a reserve fund for maintenance to the building, and co-ops are not. However, some co-ops will still have them.
Co-Op Advantages in Toronto
The bank cannot foreclose on a co-op apartment because the “owner” does not actually own the unit, and this might be construed as an advantage for the owners, but certainly not for the lender. This might make getting a loan difficult when purchasing a co-op unit and often necessitates much higher down payments, sometimes as high as 50%.
While anyone can buy a condominium, co-op owners are usually put through an interview process to see if they’re up to snuff. Depending on what you’re bringing to the building, this can be seen as an advantage (your neighbours will all have gone through the same process and generally won’t be problematic) or a disadvantage (if you don’t qualify after the interview, there’s usually no appealing).