First-time buyers, read the reserve-fund fine print
Q. My brother is buying a condo and he wants to know if each condo is obligated by law to have a reserve fund study completed? If so, how does he know if the property he is looking at has completed their reserve fund study or not? A. Each condominium corporation is responsible under the Condominium Act of Ontario to complete a reserve fund study every three years. This study must reflect the projected expenses for current and future repair and replacement of the common elements.
The corporation hires an engineer, who looks at each separate component, calculates the life expectancies and estimates the cost of each replacement or repair and in what year the work will be required.
Once your brother has made an offer on a condo (in the case of a new-build), he will be able to read all the information regarding the condo’s finances, budget, re- serve fund study, rules, regulations, common expenses, etc., by reviewing the corporation’s documents. If he is buying a resale condo he will be given a Status Certificate, which outlines all the financial history of the property in question.
The condo corporation must provide a Status Certificate to a prospective buyer within 10 days of receiving a request and the prescribed fee. The regulations permit any corporation to charge up to $100 including taxes for providing the certificate.
Your brother should review all the information with his real estate lawyer. He or she will help him avoid any unexpected surprises or disappointments. Your brother is on the right track and I wish him a successful condo purchase.