If you have ever purchased a condominium or condominium townhouse, you likely have heard of a Status Certificate.
If you are in the process of purchasing a condominium, you may be wondering why your realtor is suggesting that you make your offer conditional upon a lawyer’s review of the Status Certificate.
This is a package of documents prepared by the condominium corporation that includes quite a bit of information about the condominium corporation, including by-laws and the corporation’s financial statements.
So what could you learn from the Status Certificate?
- The Status Certificate will confirm the true condo fees (the standard form condominium Agreement of Purchase and Sale only requires an “approximate” number), any planned increase in the fees, and it will confirm whether the current owner of the condominium is behind in paying their condo fees. This is important as unpaid condo fees can result in a lien on the unit.
- The Status Certificate will also confirm whether there are any Special Assessments that have been levied or planned and the reason for them. A Special Assessment is an additional fee that unit owners are required to pay when the condominium corporation requires funds for unforeseen repairs. For example, I saw one Status Certificate which indicated that there had been a Special Assessment levied recently on the unit owners because of a rampant mold problem in the building. If there have been a lot of Special Assessments for routine repairs, it indicates that the condominium corporation may not be planning or budgeting well.
- The Status Certificate will disclose whether there are any pending legal claims that the condominium corporation is a party to. For example, I saw one Status Certificate where it was disclosed that the condominium corporation was a party to a lawsuit related to the fact that it had been built on top of a creek which had been causing flooding and erosion problems for the building.
- The package will often contain a document summarizing all of the rules of the condominium – you will want to review this to ensure that none of the rules are “deal-breakers” for you. Often clients want to ensure they may have their pets in the condo.
- The financial statements and budget of the condominium corporation would tell you where it was spending its money. This can also give you an idea of upcoming projects and those that have just been completed.
This article is not meant to be an exhaustive review of Status Certificates. While I have summarized some of the important items that could be included in a Status Certificate, there is much more one could learn from it.
If you have a specific question about condominiums or Status Certificates, contact Burlington lawyer, Emma O’Donnell, today at 905-637-5641 or click here to fill out a contact form.