#TerminologyTuesday: Co-op

In your real estate browsing, you might come across an occasional listing that looks like a lot like a condo, but is described as a "co-op"..  just what is that?

Well, first off, it's not a condo. With a condo, an owner legally owns their unit and it is registered in the land titles system the same as any other piece of property you might buy. The rest of the property (hallways, elevator, etc, in an apartment condo) is called "common element" and is owned and taken care of by the condominium corporation.  As a condo owner with share in that corporation, all the 'common element' is essentially owned together by all the owners, and maintenance is paid for through the monthly fees.

Community ownership

Co-ops are an earlier community-ownership option that predates the laws that allowed the development of condominiums and the registration of condo unit ownership in land titles.  In a co-op, the entire property is owned by the co-op corporation and an owner owns SHARES in that corporation - not any physical property itself - which allow use of the unit as part of those shares' rights.

Otherwise, co-ops operate on a day-to-day basis in a similar fashion to condos. There is a board of directors responsible for the management and maintenance, and monthly fees that pay for that. Legal requirements around management of co-ops are not quite the same: management may be done almost entirely by the co-op board of directors, whereas a condo should have a professional and licensed condominium management company. This means that quality of management can easily vary from building to building.  But, as long as management is well-run, this is not a significant concern.

Financing

One of the biggest practical differences from a real estate market perspective is that the type of ownership greatly affects the financing that is available. Because you are not buying a property that will be registered in the land title system, you will not be able to get a mortgage when buying a co-op. Yes, you read that correctly, no mortgage. 

There are some financial institutions that will offer financing in a share purchase agreement format, but the amount you can get will be significantly less. With the one I am familiar with, you can only get 40% loan-to-value. This means if you buy a co-op at $300,000, your loan will only be $120,000 maximum. You have to come up with the other $180,000 yourself.  With a condominium and a mortgage, you can usually get at least 80% loan-to-value (depending on income qualification, appraisal, etc, of course).

The other option for buying a co-op is all cash, whether your own savings or borrowed from somewhere else like a line of credit or family member.

Occupancy Rights

Some other factors that are important to understand about co-ops is that the shares bring a right to occupancy in a specific unit, but those rights are not unlimited.  

For one thing, many co-ops require approval of a new buyer by the co-op board. In theory, this shouldn't be a problem if the buyers are financially stable enough to buy the co-op, but it is at least a step in the sale process that needs to be taken care of.

Another important factor is that occupancy is granted to the owner who owns the shares and their family, and no one else. So in general, co-op units can not be rented out to anyone else. This obviously reduces the market interest in it compared to condominium ownership, as most condos can be rented fairly easily.

Affordability

The combination of the factors above generally translates into a lower market price for a co-op compared to an otherwise similar condominium. When it's easier to finance and easier to rent, higher prices are more feasible for condos. There is more demand for a condo simply because there are more buyers qualified with the easier financing.  However, if you are going to be a largely cash buyer anyways, a co-op might give you more bang for you buck, and possibly less competition depending on the market.  

As always, make sure you're working with professionals and do your due diligence. With that, a co-op just might be the right fit for your needs.

Market Media Monday - November 10, 2025

A curated list of recent headlines relevant to real estate in Canada, with short excerpts. Click each headline link to read the full article on the source site.

[ Toronto housing market is dying and here's how much average prices have dropped ]
"The latest data from the Toronto Regional Real Estate Board (TRREB) highlights continued market challenges affecting homeowners and sellers, while the ever-falling cost of a home in the region offers a ray of hope for would-be homebuyers who have been priced out of the market throughout the last decade of runaway land values."

[ Home purchased for $875K sells for a 44% loss in Ontario ]
"Housing prices are down in Hamilton. The unadjusted benchmark price was $747,200 in October 2025, which is similar to the price from last month and nine per cent lower than the same period in 2024, the Realtors Association of Hamilton-Burlington said in its monthly report."

#Terminology Tuesday: What is a final walk-through?

 A final walk-through is exactly what it sounds like: a final walk through the property so the buyer can take a last look before closing.

It's pretty common practice, but there is a standard clause that should be in the offer to ensure the buyer will have an opportunity to take this final walk-through:

The Buyer shall have the right to inspect the property one further time prior to completion, at a mutually agreed upon time, provided that written notice is given to the Seller. The Seller agrees to provide access to the property for the purpose of this inspection.

Although the standard wording refers to it as "inspecting" the property, it is important to note that this is NOT a condition, like a home inspection condition, so there is no automatic right to cancel the deal if there is some problem found.  But it does provide an opportunity to make sure there have been no significant changes to the property. If there was some major new damage or issues revealed, the buyer would want to immediately discuss the situation with their lawyer.

This opportunity to revisit the property is also often used by buyers to make some measurements for new furniture or renovations they have decided to do in between when they made the offer and closing.  Unless it is a short closing time frame, I usually write the clause in to include "two further times" so that buyers can take an opportunity to measure if they need to make orders sooner, and still be guaranteed a final walk-through closer to actual closing.

Market Media Monday - November 3, 2025

A curated list of recent headlines relevant to real estate in Canada, with short excerpts. Click each headline link to read the full article on the source site.

[ Bank of Canada announces new rate cut ]
"The Bank of Canada has lowered its benchmark interest rate, cutting by 25 basis points amid continuing signs of a softening national economy. The central bank said on Wednesday morning it was bringing that policy rate, which directly impacts variable mortgage rates, down to 2.25% in a decision widely expected by most economists."

[ How do lower interest rates impact your life? ]
"Ahead of this latest change, CBC News spoke with economists, mortgage experts and financial planners who explained how interest rates work and what they watch for with every Bank of Canada announcement. Here's what lower interest rates mean for you, small businesses and the Canadian economy."

[ Canada faces $400 mortgage payment spike: How banks are preparing for the renewal storm ]
"Canada’s banking sector is entering what may be the most significant mortgage renewal cycle in decades. By the end of 2026, nearly half of Canadian homeowners will renew their mortgages, trading the rock-bottom rates of the pandemic years for noticeably higher payments."

[ Mortgages in arrears in Canada – what the numbers mean ]
"Mortgages in arrears in Canada remain very low compared to historical and international standards. While an increase in arrears rates remains possible if the employment market in Canada softens, banks remain committed to supporting their customers through periods of financial stress, as they have in the past."

#Terminology Tuesday: Irrevocable

When making or looking at a real estate offer, there are several important deadlines and timeframes to consider. One of the least intuitive of these might be the irrevocability clause.

The word IRREVOCABLE means "not able to be changed, reversed, or recovered".  And that is basically what it means in reference to a real estate contract.

When you make an offer, there is a clause in the standard OREA form to make it irrevocable for a specific period of time.

"This offer shall be irrevocable by (Seller/Buyer) until (time) on the (date) day of (month), 20xx, after which time, if not accepted, this offer shall be null and void and the deposit shall be returned to the Buyer in full without interest."

Until that deadline has passed, the offer can not be changed or withdrawn by whoever made it (typically the buyer first, but this applies to counter-offers from the seller to the buyer as well).  The party to whom the offer has been made has until that time to accept it and communicate acceptance.

While not technically required for a contract in general, the nature of real estate makes this a pretty standard part of the process.  It gives the seller assurance that the buyer will be bound but also gives time to consider other offers that might come in.  And it gives the buyer an idea of when to expect an answer, not held in indefinite limbo while a seller considers it and possibly waits for other offers to come in.

On that note, a shorter time period can put pressure on the sellers and is generally better for buyers, while a longer time period works in favour of the sellers as they can bide their time a little to see if anything else does come in.  In practice, it's a balancing act between giving what is necessary and trying to protect your own interests as well.  The listing may ask for a 24 hour irrevocable, but the buyer is not strictly required to oblige that request, just like they're not required to give full price or any other terms outlined in the listing.

But then, the seller may be from out of country, in hospital, or any of a bunch of other possible scenarios that might require some time to respond, and a shorter deadline may not be feasible. You might just be shooting yourself in the foot and irking the seller for no reason.  And even if there is no 'good reason', it's still one thing the seller is looking for that you're not giving them, so it all has to be considered strategically and with an overall view of the rest of the offer.

Make sure you work with a competent and experienced real estate professional, and trust their advice.

Market Media Monday - October 20, 2025

 A curated list of recent headlines relevant to real estate in Canada, with short excerpts. Click each headline link to read the full article on the source site.

[ Canadian Real Estate Sellers Flooded The Market With Record Inventory ]
"Canadian real estate sellers all had the same brilliant idea last month: list before inventory surges. Canadian Real Estate Association (CREA) data shows September sales hit a multi-year high, but the volume remained tepid—especially in contrast to the record flood of new listings. Market balance is now the weakest since the ’90s real estate crash, helping push prices even lower."

[ September home sales up 5% as real estate association expects strong end to the year ]
"The Canadian Real Estate Association has upgraded its forecast for home sales in 2025, saying it now expects a softer decline this year as activity continues to rebound. It comes as September home sales rose 5.2 per cent from a year ago, marking the most activity for the month since 2021."

[ No recovery yet as housing sales in Canada decline in September ]
"However, this was the best month of September for sales since 2021, CREA senior economist Shaun Cathcart said. “While the trend of rising sales that began earlier this year took a breather in September, activity was still running at the highest level for that month since 2021, and that was true in July and August as well,” Cathcart said. Compared with August, home sales in Canada declined by 1.7 per cent, marking the first monthly decline since April."

[ GTHA condo market falls to 35-year low, report shows ]
"Once the country’s hottest real estate region, the Greater Toronto and Hamilton Area condo market hit a 35-year low this year, according to a new report by real estate research firm Urbanation."

[ Canada’s big banks diverge on 2026 rate forecasts as easing cycle nears its end ]
"For most of this year, the markets have been focused on how quickly interest rates might come down. But a quieter conversation is starting to take shape, one that’s less about how far rates will fall and more about when they might start rising again."

#Terminology Tuesday: Closing Day

More formally referred to as Completion Date, or sometimes Date of Possession, the Closing Day is the day the sale "closes" - when the buyer pays the seller and ownership is transferred.

Closing can happen any time during the day, usually up to about 4:00pm.  My experience is that many sales close earlier in the day, but one of the more typical delaying factors is how promptly the buyer's mortgage lender gets the funds to the buyer's lawyer (the lawyer obviously can't pay the seller's lawyer until this happens).