Buying a Condo

 

Buying a Condominium (Condo)

If you are considering buying a condominium, it may be one of your largest financial investments so please make sure you research before signing on the dotted line says Linda Pinizzotto, Realtor | Founder President CEO of the Condo Owners Association.

Linda has provided COA with an extensive portfolio of information for your protection and has recently launched her Real Estate Radio Show. She is an Award Winner Realtor, Past Government Relations Chair and Past VP of the Local Real Estate Board.

 

New Vs Resale Condominiums

 

Status Certificates - Resale Condominiums

Buyers should have a condition requesting a Status Condition on their Agreement of Purchase and Sale. The Condominium corporation has 10 days to provide the Status Certificate and relating documents to the Buyer.

The Buyer should have 2-3 days (as per their Agreement of Purchase and Sale) for their Lawyer to review these Condo Corporation documents (Status Certificate)  to his satisfaction before removing the conditions.   If the Buyers Lawyer is acceptable to these documents; he will notify the Buyer who will then have the option to release the condition and finalize the sale. Generally if there are financial concerns on the condominium building/Corporation, it is common that a Buyers Lawyer will not approve the Status Certificate, documents etc. however if there are financial concerns on the unit, it may be only past dues on maintenance fees.

Once the concern is identified, the Buyer and Buyers Lawyer can address the issues as to whether it is a simple pay off or a long term issue for the Buyer.  In the case of the Corporation, red flags appear if a building has a reserve fund, special assessment for repairs, a pending law suit or any form of unsafe environment which could be a latent defect.


The Status Certificate package should include:

  1. Condominium Documents
  2. Auditor approved Financial Report
  3. Reserve Fund information and accompanying confirmation
  4. Insurance Company Letter confirming up-to-date condo building insurance and particulars
  5. Cover letter from the Board outlining unit maintenance fees, arrears etc. relating to Unit
  6. Any additional information relating to the condominium building ie Loans, Liens, Law Suits
  7. Is the Building Registered with the Condo Owners Association

 

Condo Reserve Funds and Operating Budgets

 

COA believes All Condo Owners - everyone should understand the operations of a Condominium and the financial structure, in particular operating budgets and reserve funds.

The financial package of the condominium buildings makes a huge impact on value therefore affecting the mortgage and real estate value. There are key considerations to maintaining value in a condominium building aside from location and good management/maintenance. The Reserve Fund is extremely important, see notes below:

  1. High reserve funds creates good value within a condominium corporation
  2. There is a mandate where Board of Directors must arrange a Reserve Fund Study to ensure that there is adequate for expected costs of major replacement, refurbishment (per item 4 below) or repairs.
  3. Board of Directors who follow study reports for major repair and replacement of the common elements and assets of the corporation (as mandated by the Condo Act 1998) helps maintain value of the building and units
  4. Boards of Directors decisions must comply to all mandates of the Condo Act 1998

 


Special Note: