Navigating Year One in a New Condo Building

When you purchase a product in a store, ownership is immediate. But buying a condo unit in a new development is far more complex. Along with your suite, you acquire a stake in the building’s common elements — and initially, the developer holds full control.

As occupancy begins, owners find themselves with limited influence. The developer controls operations until turnover – when a board of directors, elected by owners, takes charge. This shift is vital and can shape the entire future of the condominium community.

The Importance of Turnover and Early Owner Organization

During the pre-turnover phase, owners are vulnerable. If the developer neglects repairs or fails to enforce rules, owners may need to escalate matters legally. While it’s tempting to rely on the developer’s appointed board, owners should instead proactively establish a steering committee. This committee acts as a unified voice, gathering concerns and presenting them to property management.

Forming a strong and communicative board early on can prevent many issues down the road. As part of your preparations, reviewing best practices for conflict resolution in condo communities is invaluable.

Role of the Steering Committee

The steering committee (usually 3–7 owners) is essential for representing owners’ interests. It can request access to the condo corporation’s records, monitor the first-year budget, and ensure transparency.

It’s also an excellent stepping stone for future board members. Active owner involvement at this stage ensures continuity and builds a community-focused culture, as highlighted in CityTowers’ tips on creating positive condo culture.

Legal Obligations Around Turnover

A condominium corporation is officially born when its declaration and description are registered – usually once over 50% of units are sold. The builder must call a turnover meeting within 21 days after no longer owning the majority of units, as outlined in Section 43 of the Condominium Act.

If this doesn’t happen, any owner or mortgagee can call the meeting. However, improperly conducted meetings can be deemed invalid, so it’s wise to consult a condominium management company in Ontario for guidance.

Goals and Actions at the Turnover Meeting

The turnover meeting has two main objectives:

• Elect the owners’ board
• Transfer essential corporate documents

The new board will hire professionals (lawyers, engineers, auditors), elect officers, and begin scrutinizing financials. Within 60 days, it must compare audited financials to the first-year budget. At this point, reviewing or terminating unfavorable contracts — a right granted under the Act — becomes a priority.

For advice on contract management, see how CityTowers helped reduce condo fees through experienced management.

Should You Keep the Builder’s Property Manager?

Not always. Boards should evaluate whether the current property management company:

• Has loyalty to the developer
• Offers proven condo management experience
• Employs certified on-site staff

Learn more about choosing the right condo management company in Mississauga or GTA-wide services to suit your corporation’s needs.

Five Critical Tasks for the New Board Must to Do

1. Carry out a performance audit on the building and file it with the builder and the Tarion Warranty Corporation within the first year after registration.
2. In the second year after registration, if it is a Tarion-covered building, have the performance audit updated to take advantage of the corporation’s two-year building envelope and mechanical-electrical warranty.
3. In the first year after registration, perform a reserve fund study and deliver a plan for contributions to the unit owners.
4. Before the end of the first year, but after the turnover meeting, review all contracts to which the corporation is a party and determine which of them the corporation wishes to continue and which of them the corporation wishes to terminate.
5. When the financial audit is done after the end of the corporation’s first year, determine the amount of the deficit, if any that there was in relation to the developer’s disclosure budget, and seek its recovery.

For deeper insight into financial health, review navigating first-year budget deficits and how to manage condo fees.

Planning for Long-Term Success

Once the immediate priorities are addressed, the board and property management should collaborate on a long-term strategy. The right management team can help reduce costs, improve operations, and foster a thriving community—an approach CityTowers emphasizes in its day-to-day operations and award-winning service.

Frequently Asked Questions