realcondolife

We used to think of relationships when we heard the word ‘status’. Then we shifted cognitively to Facebook, an update feature for us to share our thoughts and location with our friends. For those of us in real estate however, the word tends to make us think of condominium resale. A status certificate, like your Facebook status, is usually short and generally gives pertinent information (about your condo) without going into too much detail. As a condo owner, it’s important to understand why and when you’ll need one.

In most ways, particularly physically, living in a condo brings you close to your neighbours. And when you literally share space with others, you also share responsibilities. Along with the shared role of owners in a condominium setting, also comes a level of transparency that you don’t often get the luxury of having in other physical environments. This extends to the owners, the Property Management and even to the Board of Directors with whom you share your day to day.

When thinking of buying or selling an existing condo, this level of transparency even extends to potential purchasers and their realtors, lawyers and lenders. If there’s one critical document that captures the relevant information essential to the decision making in the resale of a condo, it is 100% unarguably and unequivocally the Status Certificate. Particularly since a resale condo doesn’t allow for a ten day cooling off period (as in a new condo sale), this is an important step not to be missed, whether to expedite the sale or appease the instant gratification mindset. You want to make the smartest, most well informed decision possible.

This document funnels down the abundance of information to a digestible (though they can often be lengthy) size and discloses the most important pieces of information, without feeling as though you’re drowning in TMI (Too Much Information).

For those selling, it’s smart to acquire one before you list your suite. You’re selling more than your suite and you don’t want any surprises that could affect your sale. You’re selling your individual home’s financial well -being as well as that of the Corporation as a whole. For those buying, it is a MUST, giving you information (and hopefully confidence) in the most important aspects to consider, specifically:

• The management of the condominium corporation
• The associated costs of living in your condo

It’s a wise decision as a buyer, to have a lawyer review the status certificate as well, particularly one that is familiar with Condominium Law. So what it is exactly? The Status Certificate is actually part of a larger package referred to as the “Status Package” and provides you with following:

• Detailed suite information – Confirmation that the current owner is up to date on all of their maintenance fees and doesn’t have any arrears that will be passed on to you. You should also be advised of permission granted to the existing owner to alter the common element areas of their suite. If they didn’t have permission, they are required to restore the suite to its original condition.

• Overview of the condo corporations’ financial status – A healthy financial picture will (or won’t) be painted through a current budget, audited financial statements, reserve fund status and special assessments. Pay attention in particular to the last two, i.e. Reserve Fund study and any Special Assessments, as overlooking these could be costly.

Reserve fund – This is a fund used for major repair and replacement of common elements such as elevators, roofs, electrical, underground parking, driveway paving. You should be aware of the current amount of the reserve fund as well as major future work to determine if it’s sufficient. The Corporation will have a reserve fund study and resulting plans to increase if any. A healthy reserve fund should ensure the value of your condo, in terms of your particular suite and the community as a whole.

A special assessment is an additional fee, above and beyond your maintenance fees that is collected to account for necessary repairs and/or improvements to the common elements, the cost of which cannot be covered by the reserve fund for various reasons (ie. shortfall). If the corporation is replacing windows in the near future, this cost burden should appear within the Status Certificate so that you’re aware.

• Condo Declaration showing allocation of ownership for each suite and the associated proportionate share of each unit owner’s interest in the common elements, the repair and maintenance obligations on the part of the Condominium and each respective unit owner (e.g. standard unit by-law) and common elements. (Do I own my balcony?)

• Management contract.

• Current agreements to which the condominium corporation is a party to.

• Corporation insurance information. ( Is the Corporation adequately insured ? What is the policy and the amount of coverage? )

• Minutes of the last AGM (Annual General Meeting).

• Condo by-laws, rules and restrictions. (Can I bring my dog with me?) When a developer hands over a building to the condominium owners, the original framework for the rules and bylaws are set in place. Once the community is settled however, the Board of Directors and owners can decide to revise those any existing ones and/or implement new ones. Day to day living can be effected by the rules set in place, so be certain you’re aware of what they are.

• Information about any lawsuits and claims against the condominium corporation ? Are these covered by the Condo Corp’s insurance?

• Number of units leased in the condominium.

Status certificates are generally prepared by Property Management, but ultimately are the responsibility of the Board. If you’ve heard the word “estoppel certificate” in the past, this is the same thing, just renamed. It’s mandatory as per section 76 of the Condo Act, and must be given to the person asking for it within 10 days of requesting and paying the prescribed fee ($100.00 inclusive of tax.) Make sure you shop (& sell) “smart” when it comes to condo resale. And when it comes to comparing some of your favourites – remember there’s a lot more to comparing condos than meets the eye. The Status Package is a large component that should weigh in on the decision making between your top contenders.

Images Source: freedigitalphotos.net