Condominium purchases are booming.
Its an affordable way for young people to get in to the housing market and a great alternative for busy professionals and retirees are looking at lifestyle changes to afford them more free time.
Before finalizing a deal to purchase a condominium, it is essential that you obtain and review a Status Certificate. The review is usually done by your lawyer. A condition to review the status certificate is usually put into the Agreement of Purchase and Sale by your Realtor.
What Is A Status Certificate
The status certificate is a document that provides information about the condominium corporation and the unit you are purchasing. It is produced by the Condominium Corporation or the property management company that takes care of the complex.
The status certificate provides information on the following:
- the current condo fees,
- whether payments of condo fees are up to date,
- whether a lien has been registered against the unit (usually for non payment of condo fees),
- whether the corporation’s budget and reserve fund are accurate and adequate
- whether there are or likely to be any special assessments by the condo corporation to pay for extraordinary expenses,
- when the last reserve fund study was completed (one must be carried out every 3 years),
- notice of any increase in fees scheduled to come into effect,
- whether the corporation is involved in any current litigation,
- whether the unit you are buying has any obligations under a “Section 98 Agreement” relating to changes previous owners have made to the common elements. (Hint: it is usually a good thing if a Section 98 Agreement is in place.)
The certificate will also provide you with copies of the condominium’s declaration, by-laws and rules, detailing what restrictions there might be on renovations, decorations, occupancy and uses of the property. Also included will be a copy of the building insurance policy, minutes of the last general meeting, and what proportion of the common expenses you will be responsible to pay. This document can easily be over a hundred pages.
Status Certificates are ordered directly from the condominium corporation or property manager. The maximum fee that can be charged for a status certificate currently is $100 (HST included).
In some cities it is common practice for the seller to order and pay for the Status Certificate and in some cities, the opposite is true.
It is actually better if the certificate is ordered and paid for in your name (the seller could always be asked to agree to reimburse the cost), since only the person who orders the certificate has the right, under the Act, to require the condominium corporation to provide copies of certain additional background documentation.