Are you looking to buy a condo in Toronto? I've put together a series of 3 videos to help educate you on buying a condo & all the steps involved. This may be the most important information of all the steps, understanding what a Status Certificate is & why reviewing it is the most important step you do!
Right now we are in a strong sellers market in Toronto. Buying a condo can be very competitive, especially in the lower price ranges (which, right now is anything under $700,000) I am seeing condo sales increase $100,000 in a week - and in that type of market, home buyers may do anything to secure a property, including waiving the right to review the Status Certificate.
Why is this very risky? Because without having a Status Certificate review you may be buying a condo that's been poorly managed, has artificially low maintenance fees (by deferring much needed repairs) or contains kitec pipe which, as an owner, you may be responsible for replacing at your own expense!
Make sure you understand the Status Certificate! In my 5 minute video, I will cover the main points to look for and more!
What is the Status Certificate?
So what is a Status Certificate? These are the financial documents prepared by the property management company. When you buy a condo, you have the status certificate reviewed by a lawyer. Generally, the sellers order this document (which is a few hundred pages) when they are getting ready to sell. By law, the property management can take up to 10 business days to prepare it.
The documents includes the budget, financial statements, notice of future funding of the reserve fund, all the documents pertaining to the creation of the condo corporation, the rules & bylaws and also a single page on the specific unit that you’re interested in buying which outlines whether the owner is up to date on their fees & whether they have made any renovations to the unit.
What does a Lawyer look for?
So what does a lawyer look for? The lawyer will confirm that the MLS listing is accurate – that the size, monthly fees, parking & locker ownership are accurate. The lawyer looks for any red flags that might come up. Red flags include:
- A low reserve fund
- Upcoming expenses that may cost more than the reserve fund which may result in a special assessment
- A lawsuit that may result in a payout not covered by insurance
- Up to date insurance
- Kitec plumbing
As a potential owner you should also check for things that will impact you living enjoyment including:
- The pet policy
- Smoking policies
- Are short term rentals allowed
- The percentage renters are in the building
- The rules of the building
- Double check that that the monthly fees cover everything that’s mentioned in the MLS listing
When can you do the review?
So when does this review happen? At two different times. First, after you purchase (as a condition of your purchase). A status certificate conditional period is normally 3 days.
Secondly, a lawyer can review it before you make an offer. The status certificate is sometimes available early, and having it reviewed before you offer means you can strengthen your offer if there are other buyers bidding as well. Luckily, I have access to lawyers that can review a status certificate in as little as 3 hours, if you need something quick.
In any case it’s very important to get professional legal advice!
I work with some great real estate lawyers if you have any questions about condo ownership and would like to get legal advice before your start your search, please let me know!
Thanks for watching! If you’d like to learn more, please call me at 416-562-5002