Why you NEED a Lawyer to Review the Status Certificate Before You Buy!

Why you NEED a Lawyer to Review the Status Certificate Before You Buy!

A status certificate is a report on the current state of the condominium corporation that is more often prepared by the Board of Directs of the condominium corporation. It is basically the backbone of the building and all the information you need to look into before you invest.

Section 76 of The Condominium Act 1998, S.O. 1998, c. 19 outlines what the corporation shall give to each person who so requests a status certificate with respect to a unit in the corporation, in the prescribed form, that specifies the date on which it was made and what that contains,

(a)  a statement of the common expenses for the unit and the default, if any, in payment of the common expenses;

(b)  a statement of the increase, if any, in the common expenses for the unit that the board has declared since the date of the budget of the corporation for the current fiscal year and the reason for the increase;

(c)  a statement of the assessments, if any, that the board has levied against the unit since the date of the budget of the corporation for the current fiscal year to increase the contribution to the reserve fund and the reason for the assessments;

(d)  a statement of the address for service of the corporation;

(e)  a statement of the names and address for service of the directors and officers of the corporation;

(f)  a copy of the current declaration, by-laws and rules;

(g)  a copy of all applications made under section 109 to amend the declaration for which the court has not made an order;

(h)  a statement of all outstanding judgments against the corporation and the status of all legal actions to which the corporation is a party

When you make the informed decision of buying a condominium you have decided to buy one unit in a whole property, the building will be managed by other parties and the financial situation will be unknown to you until you and your lawyer decide to review the status. The status certificate is part of a comprehensive package to review, things to look into are the following:

1. Lawsuits/ Legal Proceedings and Claims

The condominium corporation may have legal claims filed against it. Simply reviewing the summary page of a status certificate is not enough. Going through the entire document can disclose the movement of funds and what debts and liabilities the corporation has. This can help prevent an unexpected hit with large common expenses or fee increase.

2.Budgets

Whilst the condo corporation may not disclose accurately the financial standing for the fiscal year at the time you review the status certificate you can continue to look for some of the following, the meeting of financial obligations, are there unpaid condominium fees, are property taxes for the unit and the whole corporation paid and up-to-date and will there be a budget increase after the date of purchase.

3.Reserve Fund

The reserve fund is kept in place for the upkeep of the building and a portion of the monthly common elements are paid by the owners into this fund. Reviewing the status certificate may potentially help you ascertain what corporation projects will taking place, what will need replacing or fixing. The budget for current years can project future expenses and help ascertain what expenses the board anticipates the condominium may face.

4.Leasing of Units

You may want more information about leased units on the floor you have decided to purchase a unit.

5.Insurance

Reviewing the insurance policy in place and the amount of coverage.

A really good lawyer will look for signs of increase in fees for all sorts of matters pertaining to the condominium and the unit you will be purchasing. The list above is just a few of the many things a good lawyer will take the time to review.

Typically, you must order a status certificate, this can cost anywhere from $80 – $100, who pays for the fee is negotiable, for example the seller typically pays the fee for the encouragement of a clean sale. This extra step can even come down your relator and their skills on negotiating for you. Once, you have received the status certificate you must have it reviewed in the first 48-72 hours from a real estate lawyer.

AYOUN LAW is a boutique style law firm with a five-star reputable community rating. Our lawyers strive to create a personal working relationship with their clients. They always answer all the questions and ensure clients are well informed before they sign any real estate documents. If you are in need of a quick service mention it at the time of calling and our team will work around the clock for your real estate needs.

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