On Feb. 1st, 2015, the new Condominium Act came into effect. The list of required condo documents to give to a buyer from a seller grew. The original 7 are still on that list, as follows:
Documents STILL required (and always had been);
1) Condo Disclosure
THIS is the most important item in the Condo Documents. It will show whether there are any increases in condo fees being planned, any major repairs or renovations being considered, and special assessments coming along the way, any law suits or insurance claims pending against the condo. Keeping in mind that as the buyer, you are buying a small percentage of the entire building (or buildings), this is most certainly information you should have.
The Disclosure Certificate has to be dated WITHIN 90 days of the offer.
This is the projected budget for the next year. Estimated costs of any repairs or improvements.
3) Financial Statements (including Auditors Report, if available)
This is usually a couple of pages long and shows where all the money has gone in the past year (or two) So it will show a total amount of money received thru the condo fees (and other sources, such as parking fees, laundry fees in buildings with coin-op laundry), and then shows all the items that had been purchased and repaired and maintained over the past year or more.
4) By-laws (and Rules) and all Amendments
A standard set of by-laws and rules/regulations for condo owners. For the most part, fairly standard, but as the condo grows and matures, owners can (and often will) update and add new rules. So looking at this a little closer is a good idea. Difference between “By-laws” and “Rules”? By-laws govern the entire building and property, whereas rules apply to the ‘common areas’, such as hallways and parking lots. By-laws require a majority approval of all owners (usually around 75%), but rules can be passed by the current board at any time.
5) Condo Declaration and all Amendments
Fairly standard legal jargon that was drafted at the time when the condo came into ‘being’. It tells you how the condo board meetings are to be held, and other legal issues. Fairly standard.
6) Management Agreement
This is the agreement between the condo corp. and the current management company. These usually runs for 1 and 5 year contracts. I consider this the least important, because as a single owner, you would have very little influence over the management company. Plus, if they really do a BAD job, the corporation simply does not renew the contract, which is why I personally think this is the least important part of the Condo Documents.
7) Building Insurance Certificate
This shows that the building insurance has been paid and is current. In cases of bungalow and side-by-side condos, the insurance may NOT be for the building itself, but should cover liability insurance for common areas, such as parking lots and walkways.
New Documents required as of Feb 1st, 2015
8) Statement about the cooling-off period
Standard form which explains the buyers right to cancel the purchase within 7 days of receiving all the documents
9) Statement of buyers right to cancel because of material change
This is a form which explains that, if there is a ‘material change’ in the documents between the time of purchase, and the time of possession, the buyer has another 7 days to cancel the purchase.
Example: Buyer purchases the condo in April, when condo fees are $325.00 per month. Possession date is to be July 15th. In June, the condo decides to increase condo fees to $360 per month. Now the buyer MUST be notified of this change, and he MAY have justification to cancel the purchase. (Whether or not he actually IS justified, may be up to a court to decide. I know…..don’t shoot the messenger, I dont like this part either)
10) Disclosure Statement by Owner
Different than the Disclosure Statement in Item #1 above, this one is made by the condo sellers, and 6 pages deep.
11) Proposed by-law changes
A statement of any proposed changes to the by-laws or rules that have not been put into effect yet.
12) Notice of Future Meetings to be held
Any notice for a meeting to be held after possession date. The new buyer must receive a copy of these notices!
13) Reserve Fund Study
This was actually always required, IF a reserve fund study had been done. Since these studies are now legally required (within the next 3 years) ALL condos must have these studies and the reports have to be handed to the buyer.
14) Excerpts of the Condo Plan
This is a set of drawings which show the exact location of the condo unit itself.
15) Status Certificate
Gives up-to-date/current information regarding the current condo fee, reserve fund amount and if there are any current legal proceedings with the corporation.
These are the bulk of the forms, although there are a couple of additional forms which may be required in certain, special situations. The new act also added a few twists and turns, making it essentially more onerous to sell your condo.
If you’re thinking of buying (or selling) a condo (or a house), please call me anytime for a free consultation. Any REALTOR® can send you listings via e-mail, but my buyers are among the best prepared in the market
Conversely if you’re thinking of SELLING your condo, please call me. As a condo owner, I DO understand them a fair deal better than the average agent, and this can come in handy when your prospective buyers have questions.
I'm Alison O'Toole and I want to be your REALTOR®