Introduction to Condo Status Certificates
Ready to buy your first condo? From the neighbourhood that’s right for you to the amenities you’ll most enjoy, there are many factors to keep in mind during your search. While it’s easy to get caught up in the more enjoyable details, one thing no condo buyer should forget is due diligence. That means double-checking details, weighing pros and cons, and ensuring you know what’s inside your status certificate—and what that means for your purchase.
If you’re about to buy your first condo, here’s what you should know about status certificates…
What you’ll find inside
Your status certificate is a document containing pretty much everything you need to know about the unit you’re thinking of buying. Most importantly, it provides in-depth financial background on your potential future building—and its management. Here’s a brief list of what you’ll find inside:
• The condo declaration
• Rules, regulations, and bylaws
• Insurance information
• Maintenance fee details
• Board meeting minutes (most recent)
• Current budget & relevant financial statements
• Reserve fund study
• Potential special assessments & lawsuits
It’s a common misconception that the condo declaration simply contains the building’s rule. This section actually outlines the boundaries of individual units and common areas. It also lays out what owners are responsible for versus the condo corporation.
The reserve fund study can also be a source of confusion. Prepared by a specialist, it tells you how much money is needed for future repairs—and whether the fund contains enough to cover them. These studies are carried out every three years, and you’ll be provided with the most recent one.
Lastly, special assessments are one-time fees levied for major repairs that the reserve fund can’t tackle. They may not be a reason to avoid a building, but knowing about them can help you make a more informed financial decision.
Together, these items will provide a complete picture of your potential future condo.
Why it matters
Of course, it’s important to have a copy of your rules and regulations—and a breakdown of your maintenance fees. That said, your status certificate goes far beyond providing basic information.
From board meeting minutes to your reserve fund study, this document speaks to the financial health of a building—and the competency of its management. It can also provide clues as to whether fees are likely to rise. To get the most from it, you should give it your legal counsel for review.
How to get your status certificate
A status certificate can be obtained from the condo corporation through a written request and a fee of up to $100. Your agent should ask that the sellers obtain and pay for the document on your behalf.
Basic due diligence
Pre-construction is always inspected by Tarion, but it’s a different story for resale units. While some buyers of previously-owned condos opt for an inspection, the status certificate can (in many cases) eliminate the need for one.
The truth is, having a professional assess a condo may not always make sense. Unit inspections tend to be limited, as they don’t extend to common areas or major systems (the HVAC system may or may not be included, depending on whether you’re responsible for its upkeep). For this reason, many condo buyers depend on their lawyer’s review of their status certificate to make an informed decision.
We highly recommend that you make your purchase conditional on a successful review of this crucial document. Including this stipulation in your offer protects you if anything is amiss.
Buying a condo is unlike purchasing a house, and the necessity of obtaining a status certificate is one of the key differences. To ensure that every step of your transaction is smooth, work with an agent who understands every step of the condo purchase process!
Looking for an agent with first-time buyer expertise in Etobicoke? Get in touch! We can discuss what you’re looking for—and how we can help you find it.
