Author: Warren Gilmore - Law Student
Edited By: Ryan Carson
An increasing trend in the real estate market has seen customers gravitate away from the traditional detached single-family residence, towards more affordable condominiums. However, when purchasing a condominium, a unique set concern’s ought to be investigated by potential buyers. Perhaps the most fundamental steps in this investigation involves having the condominium’s Status Certificate reviewed by an experienced real estate lawyer.
A condominium’s Status Certificate is a document that will outline the details and the current standing of the subject condominium development. The documents work to provide both owners and prospective buyers with transparency into the ongoing operations of the condo. The documentation will include details involving the parking/locker situation for each particular unit, the scope of the common elements of the development, the condo’s management company, amongst many others.
The vast majority of real estate Agreements of Purchase and Sale involving condominiums will include a condition in the agreement stating that the Purchaser shall have a reasonable amount of time to obtain the applicable Status Certificate, and to have it reviewed by a lawyer. These conditions usually include wording to the effect of:
“This offer is conditional upon the Buyer and the Buyer’s lawyer reviewing the Status Certificate and Attachments and finding the Status Certificate and Attachments satisfactory in the Buyer’s and Buyer’s lawyer’s sole and absolute discretion.”
It is always prudent to include such a condition when purchasing a condominium unit, as such a review will uncover any potentially material concerns that might exist within the condominium.
When your lawyer reviews the Status Certificate, one of the primary concern’s they will have is ensuring that the development is currently in good standing. Your lawyer will look to examine the reach of the condo’s common expenses. These common expenses are generally referred to as condo fees, as these funds are used for maintenance, upkeep, and insurance purposes for the developments. This part of the review will also allow a potential purchaser to understand their obligations as far as payment of these fees are concerned, as well as understanding how these funds are to be used. This section of the review will also determine if the individual who is selling the unit is up to date on their common element payments.
Additionally, the review of the Status Certificate will also look to examine the current budget of the development, in an effort to ensure that the budget is sufficient to cover all necessary expenses.
Further, the review will also look to uncover the existence of any current or pending lawsuits that involve the condominium corporation. In the instance that a development is a party to a lawsuit, your lawyer should inquire further into the nature of the dispute, as its resolution could have an impact on the general well-being of the development as a whole.
To conclude, these precautions could save prospective buyers significant future headaches, and should always be a part of any offer to purchase a condominium unit.
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