Buying a condo is not the same as buying a house. With a condo, there are a few extra details you should check before signing the deal. A crucial one is the status certificate.
One woman we know simply had her lawyer review the status certificate’s summary page before getting the go-ahead to buy her condo. That wasn’t enough. Only after she moved in did she find out that the building’s pipes and elevators were scheduled to be replaced. The property was hit with a special assessment to help cover the cost of the repairs, which when divided by all unit owners, meant that she had to pay an additional $10,000 a year in condo fees over five years. The jump in fees almost cost her the condo.
Had her lawyer properly reviewed the entire status certificate, she would have had a thorough understanding of the condo board’s repair and financial situation before she made the purchase. And, she could have discussed the adequacy of the condo board’s reserve fund with the property manager ahead of time. Then she would have been making an educated decision at the time she purchased the condo instead of being unexpectedly hit with a huge fee increase.
The status certificate is important for other reasons as well. It gives you a detailed understanding of the condo corporations’ declaration, bylaws, rules and fees — everything from whether pets are allowed to noise restrictions and monthly fee schedules are included — all of which are important things to know before the sale becomes final. Because remember, when you buy a condo, you are simply buying a single unit within a large building.
5 more things to know before buying a condo
Here are five more important things to know about the condo building before you buy a condo unit.
1) How many units are being rented rather than occupied by the owner? A high percentage of rental units may impact your enjoyment of the property.
2) Is there any pending litigation against the property? If there is, the outcome could result in a special assessment, which may mean higher fees.
3) Are the units separately metered for hydro, water and gas? If so, it gives you greater control but higher monthly expenses.
4) Is a special assessment being considered in the near future? Again, if it is, your condo fees may go up.
5) Have you reviewed the condo corporation’s financial statement? It’s the only way you’ll know if the property is being managed properly.
Have a question about any of this? We have the answer.
The content of this article is intended to provide a general guide to the subject matter. It is not intended to replace actual legal advice. Specialist advice should be sought about your specific circumstances.