When buying or selling a re-sale condominium, the most important document in the deal is the status certificate. It answers important questions that matter to most buyers, such as:
- Do I own the parking or locker unit?
- Are pets permitted in the building?
- When is the pool open for swimming?
- How much money is in the reserve fund to look after future repairs?
- Are there any special assessments being charged because there is not enough money to pay for needed repairs right now?
- Is anyone suing the condominium and is there enough insurance to pay for it? For example, someone slipped on the ice that was not properly cleared
- Who is the property manager, providing guidance to the board of directors?
Most condominium deals are conditional upon the buyer's lawyer being satisfied after reviewing all of the condominium documents, including the status certificate, the declaration, by laws, rules, most recent budget and reserve fund study completed by the condominium corporation. Even though lawyers are not accountants or engineers, they are asked to provide an opinion to the buyers as to the financial well being of the building.
In general, townhouse condominiums do not require as large a reserve fund as a highrise condominium, because they will not have as many future repair requirements, other than the repair or replacement of the roof. The unit owners are responsible for everything inside their units. It is thus important for everyone buying a townhouse to also include a condition for a home inspection, to check everything inside the home before you commit to buy.
Sellers, find out what your status certificate will say before you put your unit up for sale.
Buyers, ask what is in the status certificate because this will form the basis of your continued enjoyment of your home after closing.
Click here to read the full article in The Globe and Mail: Why a condo’s status certificate is important
More information about the status certificate: Condo Information Centre
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