BUYING A CONDO: STATUS CERTIFICATE
Prior to any condominium purchase, it is imperative to request a Status Certificate. This certificate and accompanying documents are key to finding a property that is both financially and physically well maintained.
Are you thiking of purchasing a condominium but are concerned about rising condo fees and special assessments? How will you know if the condo you have in mind is in good financial and physical shape?
Every condominium complex is run by a management group. It’s this group’s responsibility to collect maintenance fees and oversee the maintenance and upkeep of the condominium complex. When you purchase a condo, your sale will likely be conditional upon the status certificate being reviewed by your solicitor, which is a package of documents prepared by the management office. These documents will outline all the details of the condo complex, it’s rules and regulations, it’s financial status, how much money is in the reserve fund, what maintenance fees cover, the details of your unit, and much more.
Generally, the seller will order this certificate and pay for it on behalf of the buyer. A status certificate typically costs $100. The most important parts of the status certificate are those that pertain to your particular unit, how much money is in the reserve fund, and whether or not the condominium corporation predicts any changes to your monthly maintenance fee. A well run condo complex will have an excess of money in their reserve fund in case of emergency repairs or upgrades. A poorly run condo with little money in their reserve fund may require all residents to pay a special levy if something happens and large repairs are required to the complex.
The corporation must issue a Status Certificate within 10 days of a reques. This document provides a wealth of information and it is essential to obtain the services of an experienced condominium lawyer to review it.
Purchasers who request a Status Certificate are on the right track. However, this is only the beginning. Don't forget to walk around the complex both inside and out. Does the lawn appear to be manicured and is the site clean of garbage? Is the paint peeling, are the shingles in bad shape? Did you talk to anyone who lives there to find out if he or she is content? Do the board of directors live onsite? Is the corporation self-managed or is there a management company? There is so much more to investigate than just financial security. If you research the property thoroughly you should be very happy with your final choice.
Source: Marilyn Lincoln, National Post Published: Saturday, November 28, 2009