Everything You Need to Know About Condo Status Certificates
Thursday Dec 03rd, 2020Share
You may be someone interested in buying a Toronto condo for sale because you either wish to move into a better place or have great amenities. They are usually located in places that let the dwellers enjoy easy access to a range of facilities like retail outlets, schools, workstations, etc.
Toronto Condos are more economical than separate homes. They are cooperative living arrangements, which means you will be sharing the building with a large number of other residents.
What is a Condo Status Certificate?
Most of them who move into a condo life never complain that community life is intruding their day-to-day lives.
Toronto Condos are managed by a directors’ board. They help in overseeing the residences’ legal side and making budgets for the complex. Wherever you have legal and financial matters involved, you will have to go through some paperwork. This paperwork is of extreme importance when you consider a condo for buying. In other words, it is known as A Condo Status Certificate.
Prepared by the Board of Directors, a status certificate is a document that includes the necessary information about the individual unit. It offers a report on the property management company and the finances of the building.
Formerly known as Estoppel, it is always better to understand how the management of the building and check if they have any pending lawsuits with their financial situation. This certificate is issued following Section 76 of the Ontario Condo Act.
Why is the Certificate Important?
If you consider buying a resale condo, get your status certificate and check with your lawyer before you settle on a decision to buy the resale condo. We can say that a status certificate provides you with complete data declaring the status of the condominium. It is a report that states the unit’s rules and regulations with financial statements, by-laws and the current fund reserve of the building.
What can you find in the certificate?
A status certificate discloses all the information you, as a potential buyer, need to know about the condominium. A few factors that include in the report are the management structure of the unit, any continued legal issues, current budget, reserve fund, future repairs, everyday expenses, insurance, unit leases, etc.
The fiscal report provides a quick insight into the budget of the current year with the expenses made so far for the condominium. It helps to know if your condo is financially strong.
The directors of the condominium study the reserve fund after every quarter of the year. This works to determine any emergency maintenance that is to be done along with the time limit for finishing it and estimating if the saved budget covers the repair cost.
So, if the building is old and if there are repairs to be done, then the possibility of a price increase is likely. Consequently, when you have the status certificate, you and your lawyer can check into the same.
Additionally, you can find whether the corporation is involved in any lawsuits and get better clarity in the building’s insurance policy. You can see if the building currently has any restrictions like “no pets” and can check out all the rules you need to follow while using any common areas of the condominium amenities.
So, the status certificate is the one document that will give potential buyers the details of both the condominium building's financial and legal circumstances and the particular unit they are interested in. It is also an essential document for those who are lending money to finance the condominium unit.
What are the important parts of the certificate?
Essential pieces of information in the certificate:
- Names and addresses of the Board of Directors or whoever has the managerial powers
- Information regarding the ordinary expenses of the building
- Any special assessments levied by the Board
- Management contract
- Minutes of the last general meeting of the Board
- Copies of the condominium declarations, by-laws, rules, and regulations
- Current budget for the condominium corporation
- Copy of the most recent reserve fund study
How to get the certificate?
Write a request and pay a fee, and bingo, any buyer can order a condo status certificate. The price is negotiable for either the buyer or seller, and the standard cost varies with the area. Once the request is submitted, you should receive the certificate package within the next ten days.
In most cases, buyers and lenders will order a status certificate to disclose additional or unanticipated liabilities. Many prudent vendors will also order a status certificate when they list their units. It helps them give it readily to the purchaser who shows keen interest.
Why is it needed?
A condo unit is always subjected to additional rules and regulations. Also, since a Board of Directors manages it, it still concerns you as a buyer to purchase a house. Your decision should be based on ensuring that the Board of Directors is responsible, their budget is well balanced, and they have enough reserve funds for any repairs. That being said, a depleted budget or an unbalanced reserve fund is always a sore point. They may cover the repair costs by increasing the maintenance fees. And, you will have to bear that extra cash.
You also get it to find if they have any prevailing lawsuits against the unit. Say you get to know that there is any continued scrutiny. It might be possible that the problem has been settled, but there is no official record if the case is closed. This says there is no big concern. Read the declaration fully and thoroughly to make sure that you understand all the clauses they have incorporated.
As we conclude, we understand that a status certificate outlines all the information mentioned above and more for you upfront so that there are no surprises later on down the line.
This means you need to always work with your realtor to ensure that the Toronto condo offer is conditional upon the proper review of the status certificate package. So, when you see the sign ‘Toronto condos for sale,’ do not just jump into them, do the fieldwork, and you will know