Status certificate is a descriptive document of the most essential information about financial status of the unit and condominium corporation issued to a buyer upon property purchase within 10 days of the request. Generally, Status Certificate requires a $100 fee (as of Condominium Act) and is paid to the management company of the building, if so is stated in the management contract.
The main purpose of Status Certificate is to inform a new condo owner about the fees, upcoming changes that may influence payments, amount of reserved funds and any debts particular suite might have. Among other things Status Certificate gives a potential buyer as much information about the fiscal situation of the building and applicable rules of the property.
The complete package with the Status Certificate provides new owner with information that is specified in the Condominium Act, and includes the following:
- Names and address of corporation authorities
- Common expenses for the unit
- Forthcoming expenditures approved by the condominium board that may be levied
- Minutes of condominium board’s last meeting
- Current budget of particular building within 90 days of the date of the Status Certificate
- Management contract
- Condominium declaration, by-laws and rules
- Recent Reserve fund study.
Status Certificate contains information if corporation is a participant of any active legal proceedings or whether there were made any judgments against the corporation. If a legal process has not been started yet, this information may be excluded from the Status Certificate.
It is important to note that all lawsuits commenced through commercial disputes court may not be considered as a legal action, therefore resulted potential liabilities may not be included in Status Certificate.
Status Certificate Checklist
As mentioned above, Status Certificate provides details about the financial and legal state of condominium and particular unit.
This information may be essential not only for prospective buyers, but also for investors, who are financing the condominium unit. Most of the management companies will order a Status Certificate prior placing a list of their units in order to provide all necessary information to a potential buyer and to influence purchaser to make a faster decision.
When reviewing a Status Certificate, a buyer should pay attention to following clauses:
- Does status certificate include information regarding future increase in condo fees?
- Are there any major repairs planned that may influence monthly condo fees?
- Is the condominium corporation involved in any active legal process?
- Are there enough reserved funds to cover unforeseen expenses and ongoing maintenance?
Status Certificate is a legal document that contains complex issues and language, therefore it is strongly advisable to get assistance of a real estate lawyer.
MLK Law will help you to understand your Status Certificate and to determine potential legal and financial consequences, as well as consult you on any other related issues.