Do you know the answer to ‘what is a status certificate’? Well if you are in the market to buy a condo right now or soon or one day far off in the future, you’re going to thank your lucky stars that you read this.
A status certificate is a report on the current state of a condominium corporation, prepared by the building’s Board of Directors, which offers a financial snapshot of the well-being of the building and information on those who run it. Since you’re buying a unit in a building and not a whole property, it’s a good idea to see how the building is managed, if there are pending lawsuits and what the financial situation is like. Like it or not, you share a responsibility with all the other owners in the condo for upkeep of the property’s common areas and condo corporation future.
When buying a resale condo, it’s extremely important your Realtor helps you to obtain a copy of the status certificate. Many offers on resale condominiums are conditional upon the review of a status certificate package by the buyer and his or her lawyer. This clause is not part of the standard agreement, however, and should be added to an offer by your Realtor.
Typically, the status certificate includes the condominium declaration (outlining the building’s by-laws, rules and regulations), a copy of the insurance certificate, financial statements and a summary of the most recent reserve fund study.
Thing’s you’ll be looking for as the prospective buyer of a condo unit?
(1) how fiscally healthy the property is looking at current year’s budget.
(2) whether or not the cooperation is involved with any lawsuits
(3) whether or not any special assessments are being considered
(4) what the pet clause is (if you have one for example)
(5) special rules for yourself and neighbours to abide by
(6) what the reserve fund looks like for future projects
For timely reading about the importance of status certificate’s, read this: “Why A Condo’s Status Certificate Is Important”, The Toronto Star, February 14, 2014