You have purchased a Condominium, and you hear the words “Status Certificate”? Well what is that? and why does my lawyer have to read this stack of paperwork?
A Status Certificate is a document that explains the current status of Condominium Corporation. When purchasing resale is it important that your offer is conditional upon the review of the Status Certificate.
The Status Certificate provides important information about the condominium corporation, such as any arrears or increases in common expenses; Whether any major work needs to be done to the building; The amount of the reserve fund and whether the reserve fund is sufficient for any major work. The Status also provides information about any claims against the corporation and whether the corporation is involved in any proceedings. This is important because if there are high claims against the corporation and the corporation’s insurance does not provide coverage; the corporation can either increase the common expenses or levy a special assessment against the unit owners. When you are purchasing a condominium, you need to know of any potential or significant increase in your monthly common expenses which is very important.
The Status Certificate package also includes the corporation’s financial statements, declaration and by-laws. The financial statements gives good indication of a corporation’s financial stability and give a good indication to whether or not the corporation is healthy. The statements will demonstrate the trends in expenditures and receipts for previous years and provide comparisons of a corporation’s actual and expected costs to come. The budget for the current year will also be included, identifying both the income to the corporation, and the amount of the reserve fund. The declaration of the corporation (Condo Docs) outlines the rules and regulations of the corporation for example whether you can keep pets or weight restrictions,what colour window coverings can and cannot be.
Therefore when purchasing a Condominium, have a lawyer on your team so you can find out the inns and outs of the building. You never know what you can find in the condo docs, and could possibly be a deal breaker or winner!
