What is a Condominium Status Certificate?

In the province of Ontario, a status certificate is a report on the current state of a condominium corporation. The status certificate is prepared by the Board of Directors of the condo, and it provides a financial summary of the well-being of the building and information on those who run it.

When buying a resale condo, it’s extremely important you obtain a copy of, and carefully review, the status certificate before being locked into your purchase.

Typically, a status certificate is part of a package that also includes the condominium declaration (outlining the building’s by-laws, rules and regulations), a copy of the insurance certificate, financial statements and a summary of the most recent reserve fund study.

Many offers on resale condominiums are conditional upon the review of a status certificate package by the buyer and his or her lawyer.  This clause is not part of the standard agreement, however, and should be added to any condo purchase offer by your real estate agent .

Reviewing a Status Certificate is an essential condition when buying a condo in today’s real estate market, because it helps potential buyers from buying into a building that has problems with the condo management.

What information is included in a Status Certificate?

A status certificate provides information to a potential buyer about the condominium corporation’s management structure, common expenses, the current budget, any legal issues or proceedings, unit leases, insurance, upcoming repairs or maintenance and the corporation’s reserve fund; as outlined in Section 76 of Ontario’s Condominium Act.

The financial statements outline expenditures, receipts and the current year’s budget (including estimated costs and reserve fund information) which gives you—and your lawyer—a good indication of how fiscally healthy the property is.

A reserve fund study is commissioned every three years by the condo’s Board of Directors, and it determines what major repairs need to be done, the timeline for them and whether or not the reserve fund has enough money to cover these costs.

If the condo is an older building, there could be outstanding repairs or things that need to be done, so there is always a chance the condo corporation could increase the monthly maintenance fees. Any immediate planned increase in fees will be included in the Status Certificate.

You’ll also find information outlining whether or not there are any lawsuits ongoing against the the corporation, details of the building’s insurance policy and whether any “special assessments” (extra fees that the owners must pay) are being considered or will be taking place.

Within the declaration, you’ll find information on any restrictions, such as a “no pets” clause, and what rules you must follow when using common areas such as a swimming pool, gym facility or party room.

How do you get a status certificate?

Anyone can order a condo corporation’s status certificate by providing a written request and paying the $100 fee, however this is typically only done when there is a prospective buyer of a resale condo unit. In the Greater Toronto Area it is typical for the Seller to pay the fee.

After submitting the request, you should receive the status certificate package within 10 days, though some condo corporations will rush the order for a fee.  Once received, you and your lawyer typically have 48 to 72 hours to look over the documents and come to a decision.

Why do you need a status certificate?

Since a condo unit is subject to additional rules and regulations—as well as managed by a Board of Directors—there’s an entirely different set of concerns for a prospective buyer than there is when purchasing a house.

You’ll want to make sure that the Board of Directors is being fiscally responsible, that their budget is balanced, and that there is money in the reserve fund for any upcoming repairs.  An unbalanced budget or depleted reserve fund is a red flag, and you could be on the hook for increased maintenance fees to cover repair costs.

You’ll also find out if there are any lawsuits against the corporation or unsettled legal issues. 

It’s always a good idea to get your lawyer or realtor to contact the property manager as well and get as much information as possible before making a decision.

Since the condo corporation makes the rules about balcony barbecues, pets, and common areas, it’s important to fully read the declaration in the status package to ensure their by-laws and regulations are a good fit for you.

A status certificate outlines all this information and more for you upfront, so there are no surprises later on down the line.  This is why it’s important to work with your realtor to ensure your offer is conditional upon a review of the status certificate package.

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Mortgage Approval and How to Get It

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HOW TO GET YOUR MORTGAGE APPROVAL

Getting a mortgage approval doesn’t have to be a scary or traumatic experience. The banks (lenders) all look for the same signals for credit worthiness, and with a bit of planning in advance,  you can ensure a smooth and easy mortgage approval, helping you to get that house of your dreams! By following this timeline plan up to a year before you want to buy a home,  you’ll be well prepared for your eventual move.

1 YEAR BEFORE:
REVIEW YOUR CREDIT REPORT
Access your credit report online at www.equifax.ca or www.transunion.ca – and make sure there are no mistakes on it.
TIP If your score is low, you can begin to fix it now – there’s enough time to make considerable improvements. Start by paying off debt such as a car lease and credit card accounts with amounts higher than $1,500, as this can help boost your credit score.

10 MONTHS BEFORE:
TACKLE YOUR EXISTING DEBT
Smart buyers enter into home ownership with as little extraneous debt as possible.
TIP Focus on bringing your credit card balances to less than 50% of the maximum amount allowed. Credit cards that are at capacity hurt your score.

8 MONTHS BEFORE:
LIVE ON LESS
Home ownership comes with expenses that renting doesn’t: property tax, utilities such as water and heat, and so on. Start putting aside those amounts every month to help you prepare to take these bills on when you are a homeowner.
TIP Park the money in a no tax high-interest savings account and apply it to your closing costs later.

6 MONTHS BEFORE:
RESEARCH MORTGAGE RATES AND COMPARE
Banks and mortgage brokers can sometimes offer different rates. Keep your options open and take the time to do some research on both. Compare what kind of mortgage each one can secure, what their best rate is and what documentation they will need from you.
TIP There’s no such thing as being too prepared! Speak to at least two different banks and one or two mortgage brokers and compare, so you get the best rate you can.

mortgage approval

4 MONTHS BEFORE:
ASSEMBLE THE PAPERWORK AND APPLY FOR A MORTGAGE
Most mortgage pre-approvals are valid for three months, but your broker (or bank) will need time to process your application. TIP Order your credit report yourself. Why? When someone else (such as your broker, who needs a copy) orders your report, that’s a query that is reported to the credit agencies, and it can impact your standing. When you pull the report yourself, there is no impact on your credit standing.

3 MONTHS BEFORE:
START HOUSE HUNTING!
Attend open houses and start looking with a realtor,  knowing in advance exactly how much you can spend. Make sure you get a written copy of your mortgage approval (pre-approval) for your records.
TIP Remember that your pre-approval is a maximum. You may find your perfect home for less. Don’t over extend yourself as it is always better to have a buffer for emergencies.

portions of this article were originally published by Genworth Financial