November 25, 2017

Should You Get A Status Certificate?

With the current situation of house prices in the Toronto area, chances are first time buyers (and those of us downsizing) will be looking at purchasing a condo.  What is a Status Certificate.

Purchasing a condo or condo townhouse is very different from purchasing a detached home.  All condo buyers should be aware the unit’s status certificate as it provides important details about the unit you are interested in, as well as the condo corporation as a whole.  I strongly suggest you make your purchase conditional on a review of the status certificate.

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 But the certificate’s information could be out of date, and inaccurate.

Some questions about condos 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?  What are your 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?  If the seller is in arrears on their monthly fees, it’s the new owner’s responsibility to catch up the arrears, so find out beforehand.
  • What’s the financial status of the condo corporation?  Is there 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.  Read this info carefully.  I left it for my lawyer to investigate only to find out the reserve fund had minimal deposits
  • Will I have full ownership of the included parking space or locker?  Will you personally own the space, or is it 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.

And what if the status certificate reveals something that gives you pause? If you make your offer conditional upon its review, you should be able to walk away from the deal.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

https://www.thestar.com/life/homes/2017/08/12/a-current-status-certificate-is-a-crucial-piece-of-your-condo-purchase-joe-richer.html