Get a current status certificate before you buy
I’m buying a condo, and my salesperson wants to include a condition about the status certificate. What does that mean?
There are a few additional wrinkles in a condo purchase, compared to buying a house, that you should be aware of.
All condo buyers should be aware of the unit’s status certificate. It provides important details about the unit you are interested in, as well as the condo corporation as a whole.The info in the status certificate is crucial, and I strongly recommend making your purchase conditional on a review of the status certificate by both you and your real estate lawyer.
Keep in mind that the condo corporation can take up to 10 days to provide the certificate, and a typical legal review, once you’ve received it, could take three to five more days.
Sometimes the seller will offer to provide you with a version of the status certificate that they previously obtained. But the certificate’s information could be out of date, and inaccurate. It’s always a good idea to get the document directly from the condo corp.
Some questions about condominiums and the answers a status certificate will provide:
What’s in the condominium’s declaration, bylaws and rules? Often condos have rules regarding pet ownership, noise, balcony furniture, decorations, and even curtains and flooring material. Make sure you’re comfortable with these rules.
What kind of fees can I expect to pay? It’s important to know how much you’ll pay in monthly fees for maintenance, landscaping, utilities in common areas, and other upkeep. As well, are there special assessments that owners are still paying into.
Is the seller up to date on their fees? We’ve come across cases where new owners are surprised to find that the seller was behind on monthly fees. In these cases, it’s the new owner’s responsibility to catch up the arrears. It’s a situation that’s easily avoidable, because the info is on the status certificate.
What’s the financial status of the condo corporation? These details are included in the status certificate, and can indicate whether there is enough money in the reserve fund to cover future repairs. If the reserve fund isn’t large enough, you could end up facing a sudden hike in your condo fees or paying a special assessment.
Will I have full ownership of the included parking space or locker? The certificate will tell you whether you will personally own the space, or whether it’s a common element that the condo corporation owns, and assigns to you. Be sure to confirm, with your lawyer, that the declaration documents match with the purchase and sale agreement in details such as the unit number, parking space number and locker number.
Always know what they’re buying in a real estate purchase. Just like a home inspection can help you understand the physical condition of a home, a review of the status certificate helps condo buyers ensure they are making a purchase that suits their needs.
And what if the status certificate reveals something that gives you pause? If you make your offer conditional upon its review, may be able keep your deposit if you decide to walk away from the deal. Joe Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to askjoe@reco.on.ca. Find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at youtube.com/RECOhelps.