Are you thinking of buying a condo?

When buying a condo, which can include a condo apartment or a condo manage townhouse, it’s important to understand that you aren’t just buying property.

You are also buying into the financial responsibilities of the condo corporation.

Specifically, a condo managed property or condo community is one where a condo corporation is created to manage the entire property.

The condo corporation hires a management company to maintain the property on a daily basis and manage all of the expenses of running the building or the community and the common areas that aren’t specifically owned along with your own unit.

The condo corporation will divide the overall costs of all operations among all of the unit owners.
Therefore, as a buyer, before you buy a condo property you need to make sure that the management company does a good job of managing their funds and managing their expenses.

Otherwise, you can have monthly maintenance fees that continue to escalate beyond any of your control.

If the property has major repair issues or miss management of funds or even lawsuits against the corporation then your maintenance fees can go up to a monthly cost which can become financially unmanageable for you.

Furthermore, if you have a moderately priced condo but the maintenance fees are astronomically high for what they should be then it can become unsalable or very difficult to sell if you choose to sell it in the future or you are forced to sell it because of the high carrying costs

So what exactly is a condo Status Certificate?

Just like when you buy a house and you hire an inspector to inspect the physical aspects of the property, in a condo what is critical for you to know is having a real estate lawyer review the condo Status Certificate.

The Status Certificate is not just a single page or a “certificate“ which gives a pass or fail so to speak as the name might suggest.

A condo Status Certificate is a full comprehensive package of documents related to the building itself, the common areas, the condo corporation, the management fees, and much more.

It covers all of the financials, the operating costs, projected repairs or significant improvements to the building which might require a large budget.

It will include any special orders against the corporation, any special assessments by the government, and any lawsuits against the property or the management company or other risks that might possibly exist for you as an owner if you were to buy the property.

The condo status certificate also has a copy of the condo bylaws.

Bylaws are the rules that govern things like whether or not pets are allowed or up to what size you can have pets.
They may also include things like whether or not you can have your own barbecues and other things.

Bylaws can include things like whether or not AirBnB’s are permitted or prohibited.
Or if there is a minimal term required if you were to rent out your unit.

And of course information about the reserve fund.

Just like we are told personally to save money for a rainy day or even a few months of unemployment, you want to know that the condo corporation has a large reserve fund of cash just in case there’s an unexpected repair required.

So when I work with Buyers who are buying a condo I put a condition in their purchase offer which requires the offer is conditional on the seller to provide the condo status certificate and the buyers lawyer to review the contents of the full Status Certificate package.

If the lawyer does not find any issues then the buyer can waive that condition after lawyer review.

And if there are concerns then the Buyer has the option to back out of the deal and get their deposit returned in full.

In summary, if you are thinking of buying a condo managed property and you have questions you can always contact me and I’m happy to answer all of your questions for you.