If you are in the market to buy a condo and you have your eye on a resale condo, you’re going to quickly learn that you need to get acquainted with something called status certificate. Such a document is your ticket to finding out everything about that prospective condo, meaning you’re going to quickly figure out whether or not the condo in question is worthy of a purchase. Before that though, learn a bit more about the miracle of status certificates and why they just may save you from disaster.
What is a Status Certificate?
In simplest terms, a status certificate is an in-depth look at almost every detail of the condo unit for sale. Think of a status certificate as a Polaroid: it captures every aspect of the unit in a moment in time. When you request a status certificate, the management company that owns the building of the unit you are considering for purchase must provide the certificate within 10 days.
Why get a status certificate?
Because a status certificate can tell you that you may be on the verge of making one of the worst financial decisions of your life or if the condo unit is a good buy. It can save you a lot of grief down the road. A status certificate will even tell you little details you may not even think about asking the property management company to begin with, such as whether the owner of the unit is in default of paying his/her condo fees (meaning you would be responsible for paying these). Moreover, it can also alert you if an increase in condo fees is on the horizon and the amount stored in the property management company’s reserve fund; a low reserve fund usually means additional condo fees are on the horizon.
What will a status certificate tell me?
It’s a fairly exhaustive list, so the takeaway is that everything on the status certificate should answer any question you may have about the state of the unit. A status certificate must also list legal problems affecting the condominium as a whole, such as judgements against the company. One thing to note is that some legal action may not actually be on the status judgement, such as arbitrations and mediations.
In addition to pending lawsuits and the monthly fees you must pay (e.g. insurance, utilities, etc.) the status certificate also details the declaration of the condominium. This will tell you everything you need to know about the condominium’s rules and by-laws, stating everything you need to know about living there. One detail you may gloss over is the owner-to-renter ratio: some buildings allow owners to rent while others do not allow this at all. If you prefer to live around long-term neighbours, raise your family, and have stability and prefer not to see new people moving in and out of the building all the time, be sure the renter ratio is either low or doesn’t exist because it’s against the rules.
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