Why are Status Certificates Important ?
Virtually all condominium sales involve a Status Certificate. It is the most important accompanying document in any sale, and most condo offers will be conditional upon review of this bundle of papers by the buyer's lawyer. The Status Certificate can make or break the deal. Why? The Status discloses vital behind-the-scenes information about the physical, financial, social and legal health of the building and the individual suites. It tells if there are any skeletons in the closet.
There are 10 crucial questions Status Certificates answer: Is the owner up to date with payments? What is the exact maintenance fee and what does it include? Have suite renovations been done with Board approval? What is the correct legal descriptions of parking spots and lockers and are they owned or exclusive use? What are the rules and regulations in the building especially impacting pets? What is the percentage of renters? How much is the reserve fund and what does the reserve fund study say? What is the budget? Is there current litigation? Most importantly, is a special assessment pending or contemplated?
Anyone can obtain a Status Certificate for $100, or slightly more if you are ordering on-line. By law, the corporation has 10 days to provide the documents and the purchaser's solicitor has a day or two to review them. Banks and other lenders may also want to review this information to approve funding. If the buyer is unsatisfied with any aspect of the disclosures in the Status Certificate, the deal is dead. Ouch!
Sellers prepare, buyers beware!