I am in the process of buying a condominium and my realtor has made the offer conditional on review of the status certificate by my lawyer. I want to make the offer as straightforward as possible and therefore increase the likelihood that it will be accepted by the vendor. Is this condition necessary?
I should begin by explaining what a status certificate is so you understand how it forms part of the transaction.
When you purchase a condo you are actually buying your unit in a building that is overall owned by a condominium corporation. Therefore, as a buyer, it is important that you obtain information about the status and running of the corporation over and above the status of the individual unit you are purchasing.
The status certificate covers a number of matters that could affect your decision to purchase including: whether the unit owner is in arrears with their monthly common expenses, if the reserve fund (the saving of the condo for major repairs) is adequate, if the condominium board is anticipating raising the monthly common expenses and if there are any outstanding judgments or lawsuits against the corporation.
Obviously, all of these and a number of other items covered in the Status Certificate could affect your decision to purchase the unit. Most importantly, the information would not come to light in the normal course of your lawyers search of the property.
Also, if you are financing the transaction with a mortgage, your bank will insist that the status certificate is reviewed by your lawyer; who will also be representing the mortgaging bank in the transaction.
As most purchases are funded by a financial institution, the status certificate is an integral part of the transaction. Even if you are in the enviable position of paying cash for your real estate transaction, you should still make the offer conditional on review of the status certificate.
Otherwise, you may miss some very important details concerning the condominium corporation you are buying into.