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When buying a condominium, especially a resale condominium, it is extremely important that you have a lawyer review the status certificate to ensure that you are purchasing the condominium with as much information about the condominium corporation as possible. A condo status certificate includes its financial information, common expenses, budget, reserve fund, and other important information included in the certificate, declaration, and rules and regulations of the condominium. Consulting with real estate lawyers in Toronto, Ontario can ensure that you are well-informed about these critical aspects.
A Status Certificate provides a snapshot of the unit a prospective buyer is purchasing. As per section 76 of the Condominium Act, a status certificate should provide basic information concerning the financial status of the unit and condominium corporation. Real estate lawyers in Toronto, Ontario, can offer detailed insights into the implications of this document, ensuring you make informed decisions.
The main reason why it is important to review the status certificate is to inform prospective buyers of the common expense fees. It is important to remember that these fees are calculated on top of and in addition to any monthly mortgage payment the new buyers will pay. A real estate lawyer in Etobicoke, Ontario, can help you understand these fees and how they fit into your overall budget.
The status certificate will reveal if the current owner is in arrears for non-payment of common expenses. It will also inform prospective buyers if there will be an increase in the common expenses or if there is litigation against the condo for whatever reason.
When it comes to reviewing the condominium corporation’s budget, it is important to look for the following information:
Condominium corporations commonly use a reserve fund to pay for the replacement of each building component. A portion of the monthly common element fees paid by the unit owners is deposited into the fund.
It is important to review the balance of the reserve fund at the time the certificate is issued. More importantly, does the balance of the reserve fund exceed the anticipated expenditures to be made, and are there any plans to increase the reserve fund, which could increase the common element fees for prospective buyers?
The condominium corporation may be subject to legal proceedings and might have judgments against it. These judgments might be divided among the unit owners, resulting in a special assessment fee. Engaging a litigation lawyer in the GTA can be crucial if legal proceedings affect your condominium purchase, as they can offer guidance and representation in complex legal matters.
It is not uncommon for people to buy condominiums and rent them out. However, prospective buyers should be aware of how many units are being leased. The higher the number of leased units could result in higher common element fees in the future due to an increase in damages in units and to the condominium building, resulting in a higher rate of repairs.
In addition to reviewing the certificate, a lawyer should review the condominium’s declarations, rules, and regulations regarding pets, noise levels, visitors, parking, and renovations. Working with experienced real estate lawyers in Toronto, Ontario, or a dedicated real estate lawyer in Etobicoke, Ontario, can help ensure that all these aspects are thoroughly examined, providing peace of mind in your real estate transaction.
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