In Toronto, buying a condo can provide a cozy and sensible living space, while simultaneously helping you get into the cycle of homeownership. In the world of real estate, condos are unique. For buyers who are looking to enter the condo market, it helps to gain an understanding of some of the most essential steps in the purchasing process – like status certificates.
Unique to condos, status certificates are important documents that provide a long list of critical information about the property, condo corporation, and unit itself. When it comes to gaining greater transparency in your condo purchase, they’re a big part of protecting yourself and your investment.
If you’re thinking about buying a condo in Toronto, here’s what you need to know about status certificates.
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Breaking Down The Details
When buying a condo, obtaining and reviewing the status certificate is a very important step. Similar to how a home inspection would help a buyer identify potential concerns or red flags in a home, status certificates allow you to closely look at a myriad of critical information that will directly impact your purchase.
To say that status certificates cover a lot of information would be an understatement. These documents are very in-depth – and that’s to your benefit. Thankfully, your real estate agent and lawyer will help you make sense of it all and ensure your interests are protected. Here’s a high-level look at what important elements are included in status certificates.
Corporation Information
First and foremost, status certificates share key information about how the property itself is owned and operated. They provide the name of the condo corporation, as well as who is responsible for its management. The corporation may manage the property in-house or may contract a dedicated property management company for these duties. It will also outline the condo’s board of directors – including their names, roles and responsibilities, and length of term served.
Beyond everyday operations, the status certificate will also note any relevant legal actions that have been levied against the corporation, management company, or board. This could include any outstanding lawsuits, assessments or judgements that are underway.
Finances
Status certificates also divulge important information about the financial standing of the condo corporation and property reserve. This includes items like the annual budget, outstanding debts, and reserve funds. It will also include information about the various insurance policies that protect the building and any claims currently under review.
Reserve Fund Study
One of the most critical details included in a status certificate is the reserve fund study. This study analyzes what repairs and maintenance are on the agenda for the next five years. This information then is typically prepared by an engineer who informs the condo corporation and board about the rough costs for these items. In Ontario, all condos are required to create and maintain adequate reserve fund studies for the protection of the owners.
Rules & Bylaws
Beyond information about building operations, the status certificate also includes important details about how condo owners may use the space. For instance, whether or not pets are permitted in the building, use of common areas, short and long-term rental permissions, or balcony restrictions. When reviewing the building bylaws it’s important to note or flag any rules that may interfere with your ideal lifestyle.
What Are the Costs?
Given the critical information they provide, obtaining a status certificate is well worth the small cost entailed.
Under the Ontario Condominium Act, a condo corporation may charge buyers a fee in exchange for fetching a status certificate. However, they may not charge more than $100 – including HST, other taxes, and materials. Some management offices may attempt to inflate this cost or charge extra, so it’s important to be aware of this regulation.
Downsizing from your detached home to a compact condo? Check out some of these helpful articles from our blog.
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Other Traits Unique to Condos
A condo makes a great home for buyers of a wide range of lifestyles. While there are many unique advantages to owning a condo, the niche nature of this kind of property also extends into the purchasing process. Beyond status certificates, there are several ways in which purchasing a condo is highly specialized. If you’re looking to buy a condo in Toronto, whether pre-owned or pre-construction, you’ll want to work with an experienced real estate professional who is vastly familiar with the city’s distinct condo market.
Ready to find the perfect Toronto condo? As knowledgeable and locally leading real estate agents, we can help. Call us at 416-587-3300 or click here to send an email.
