Are you planning on buying or selling a condo in Oakville?
Most people think the 3 rules of real estate are location, location, location… While location is always important, the status certificate (it used to be called the Estoppel Certificate) is arguably the most important documents to be aware of when buying a condo.
What is a status certificate?
Think of it as a ‘snapshot’ of the condominium corporation at a specific moment in time. The status certificate includes all of the crucial documents pertaining to the condominium; the declaration, by-laws, rules and regulations, budget and financial statements as well as the building’s insurance certificate. It tells you the number of units in the condominium building as well as whether there are any units that are leased out. The status certificate discloses the monthly common element expenses payable by the unit owner and tells you if they are in arrears.
It will tell you how much money is in the condo’s reserve fund at that point in time as well as any special assessments levied or even proposed as of that date. The condominium corporation’s reserve fund is very important when buying a condo. In older condo buildings, a healthy reserve fund is often a sign of good management and good management helps protect owners from surprise expenses and adds value.
Ask yourself if you would like to close on your dream condo only to be levied a special assessment of $5,000 (as an example) to retrofit elevators in your first year of living in the building. Condominium corporations must set aside at least 10% of the common element fees for the reserve fund.
The condo corporation is also required to report any legal proceedings that the building is currently involved in as well as any judgements against the corporation. This will all be in the status certificate.
When making an offer to buy a condominium, I always advise my clients to make the Agreement of Purchase and Sale conditional on you or your lawyer reviewing and satisfying yourself with the contents of the status certificate.
Anyone can order the status certificate, the Seller, the Buyer or even someone with no direct interest. I recommend to my sellers to order the status certificate in advance of listing their condo for sale. This helps make sure that you are aware of anything in the status certificate that could affect your condo’s value before listing the property. The status certificate is ordered in writing from the management company of the condo corporation along with the applicable fee (to a maximum of $100 including H.S.T). The condo corp. then has up to 10 days to provide the status certificate and accompanying documents.
Have you had a problem with a purchase because of the status certificate? Would you like further information? Let me know your thoughts or how I can help… Thanks for reading!