If you’re currently looking to purchase a new condo, it’s important to do your research as well as to work with an experienced real estate lawyer. The last thing you want to do is purchase a condo on a whim and later find out that there are maintenance fees or regulations you weren’t aware of.
So, how do you ensure that you have all the important information you need about your prospective new home before you sign on the dotted line? That’s where a condo status certificate can help.
You’ve likely heard the term “status certificate” before, but what exactly is a status certificate and why is a status certificate important?
Here’s what you need to know about this invaluable document and the purpose of getting a status certificate.
A status certificate, formerly known as an Estoppel Certificate, is a document that provides information about the current state of a condominium property.
Prepared by the Board of Directors and usually hundreds of pages long, it outlines pertinent information about the condo corporation’s financial and legal status, as well as information about the people who operate the corporation.
A condo status certificate is governed by the Ontario Condominium Act (Section 76) and is usually part of a package that includes the condominium declarations (e.g. rules and regulations, fees, by-laws), a copy of the insurance certificate, financial statements, and information about budgets for future renovations or repairs to the building.
The purpose of a status certificate is to give potential buyers as much information as possible about their unit and the overall operations of the condo complex.
When and why is a status certificate issued? Typically, when buying a resale condo, your real estate agent will recommend that you obtain a copy of the status certificate and thoroughly review it with your real estate lawyer before committing to a purchase.
In fact, many offers on resale condos are conditional upon review of the condo status certificate, so that buyers can ensure everything is in order and as it should be.
While you aren’t legally required to obtain and review a status certificate prior to purchasing a resale condo, choosing to buy a condo without reviewing the information in a condo status certificate is risky, and could end up causing you issues down the road.
You should also know that if you are getting a mortgage, your bank will require a status certificate even if you want to purchase the property without the benefit of having one. Lenders will not lend on condominiums where a lawyer has not reviewed the certificate for them.
If there isn’t already a clause about obtaining a condo certificate in your agreement, you should definitely have your realtor add it in.
You might be wondering why a status certificate is important. As mentioned, obtaining a condo status certificate is crucial because it shows any additional or unanticipated liabilities that might come with purchasing the condo unit.
Keep in mind that a condo unit is subject to additional rules and regulations compared to a house because it’s managed by a Board of Directors. For this reason, you’ll want to make sure that the condo board is fiscally responsible and can handle necessary repairs that come up.
The purpose of status certificate is to provide buyers with the following information:
Ultimately, when you buy a condo unit, you are purchasing a piece of a larger property. You need to know how the building is managed, because it will directly affect your enjoyment of the property, as well as your finances.
The good news is that anyone can order a condo corporation’s status certificate, whether you are a buyer, seller, real estate agent, or bank. All you have to do is submit a written request and pay the $100 fee (plus HST) to management or the condo corporation.
In Toronto, the seller usually pays for the condo status certificate, but the standard varies depending on the city in which the condo unit is being sold.
After submitting the request, you should receive the status certificate package within 10 days, although it can be rushed for an additional fee. Your lawyer will then have about 48 to 72 hours to look over the package and discuss its contents with you before you make a final decision.
Are you looking to buy a condominium in Toronto or the surrounding areas? Buying a condo can be a complicated process and there are a lot of factors you need to consider.
If you’re looking for a trustworthy, reliable, informed real estate lawyer to help you navigate the complicated condo-buying process and review your condo certificate, Zinati Kay – Real Estate Lawyers can help.
We are a full-service residential real estate law firm that provides fixed closing costs to our clients when they buy, sell, mortgage, or title transfer their property. If you are buying a resale condo, we can help ensure you have a smooth process and understand all the terms of the agreement. We can provide you with a written review of your condo status certificate at no extra charge—it’s part of our fixed closing costs!
Over the past 20 years, we have closed nearly 21,000 real estate transactions. We pride ourselves on our professional service, reasonable real estate lawyer fees, and our thousands of satisfied clients. If you need any assistance, contact us at (416) 321-8766.
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