Q I have just put an offer in on a condo purchase and my real estate agent insisted that I insert a condition that the Status Certificate be reviewed prior to waiving the condition. What is a Status Certificate and why do I need to have it reviewed?
A. A Status Certificate and the accompanying documents are a crucial step in the purchase of a condo.
Basically, it sets out a variety of statements concerning the individual unit (whether the common expenses are in arrears) and items such as if the reserve fund is adequate, if the condo board has levied a special assessment, if the condo is party to any legal proceedings and any other specific concerns with respect to the unit.
This document is accompanied by the insurance certificate for the building(s), the current and proposed budget for the condominium corporation, the constating documents that created the condominium corporation and usually a set of rules and regulations that the owners must abide by. It is important to have these documents reviewed by your lawyer prior to waiving this condition because they will reveal if there are any defects with respect to the ongoing operation of the condominium corporation. Without its review, the bank will often not advance mortgage funds. So, even if you rent in the building and are aware of the finances and issues of the condo, you will still be required to obtain a status certificate.
The cost of obtaining the certificate is generally $100 while the cost for review by your lawyer should be included in the fee you will pay them for the transaction. If you do not use the lawyer who has reviewed your status certificate and accompanying documents, the legal fee is usually around $200.
A necessary evil, but one that protects you from problem buildings.
– Jeffrey Cowan is the principal with Cowan Taylor and McGee, Barristers & Solicitors. The information in this article should not be relied upon as legal advice.
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