When you purchase a resale condo suite you receive a Status Certificate that explains the Financial position of the Condominium Corporation.
a) What are they expected to spend Capital Projects (Forward Plan)
b) Are they being sued?
c) Are their Finances stable IE Borrowings vs Special Assessment
d) Percentage of Rentals vs Owners
e) Rules and Regulations you will need to adopt.
f) Is the Owner up to date with their fees and what do they pay
g) Confirmation of Locker and Parking descriptions.
They will provide you all Insurance Documents, Rules and Regulations, and most recent AUDITED Financial Statements. You now have these on a CD and in Print; You take them to your lawyer....
Lawyer today told a Buyer; "That condo isn't a good deal because their Annual budget is in deficit." UMMMmmm Really.... My response? "Yer stupid".
Building Budget Held Meetings (the Board of Directors and Management Company) for what they expect to spend; planning Diligently. This creates the amount to calculate your maintenance fees.
If we spend $100 more than anticipated on anything ( legal fees, repairs, a few snapped parking control gates) WE WILL BE IN DEFICIT.
If a condo is adhering to their Reserve Fund Study, {depositing the correct amount quarterly each year and earning interest} and the audits have been done.... [by accountants who manage and accounting firms who audit PLUS the engineers who calculate the remaining economic life of system components] there is generally not a lot to discuss.
WTF [who legal term] are you to decide an annual operational deficit means its a poorly run building and you recommend your buyer skip it.
A financial statement takes a snapshot at a particular calendar date. (Usually Dec 31st year end) Are you overdrawn during TAX time? Uhhuh Now pick up that book on accounting practices are review Financial Statements paying careful attention to the Source and Application of Funds. ( what we collected, what we spent / did with it)
If the building is deficit or surplus it is carried forward (and paid) into the next year. It is not a VISA card. Its a running balance.
In this case, the Buyer is changing Lawyers. or the Building could have a sale that show DFT [Deal Fell Through] when asked the agents would say Financial Statements of the Condo Corp. Depending on their KLOUT their voices might carry, damaging the financial resale and viability of the building.
Please work with people who understand... Your road will be so much smoother.
You can Order your Condominium Buildings Status Document Bundle online. A number of condominium corporations have made electronic ordering of your Status Certificate Online available and receiving all the documents online by email.
This saves the condo corporation the expense and time in preparing Packages for Purchasers. These packages include the Building Declarations, Rules and Regulations, By Laws, Audited Financial Statements, Proof of Insurance Coverage and a Status Certificate. Today it should also include a Workplace Harrassment By Law and a Standard Condo Unit Description.
CONDUIT - The standard in online Status Certificates
Since 2008 D-Tech Consulting has changed the way status certificates are ordered and delivered. Condominium corporations coverage across the GTA and Ontario provide access to order status certificates from most condo's and property management firms.
High adoption rates with management companies, unit coverage and powerful management system have led to integration with the Ontario land registry system managed by Teranet. Their Geowarehouse service provides all Ontario real estate board with integrated and direct access to CONDUIT. https://www.statuscertificate.com/
The Lawyer who is conducting your transaction requires (for YOUR benefit as the Buyer) a Valid Status Certificate that is dated within 30 days of the closing, Signed under Seal with an original Signature.
The Bylaws, Insurance, Financial and Declarations are all documents that are up to date even when they are 9 months old. The Status Certificate is relied upon to show if:
- The Condo Corporation embroiled in Litigation
- Long Term Repairs and Expenses
- Special Assessments for Operating Fund Shortfalls
- Confirms the Maintenance Fees and proposed Increases
- Confirms your ownership details of Parking Spaces and Lockers
- There are any outstanding Claims against Tarion
Yes, It is convenient; now your lawyer has an obligation to ask you if you want all the material printed (usually ..@ 50 cents per page) and you in an effort to save money skip the details. If you have a lawyer who does not explain and show you the By Laws and documents, whether you own or have parking, purchased the correct unit, RUN! Change Lawyers. I can recommend a few that are worth it. Yes they charge more. They actually do the job instead of gambling on Title Insurance Claim saving them.
Its ok, you just live in the apartment Once you close your door......
Please work with people who understand the process and can explain these things to you in detail. If You are buying into a building with poor management and a weak condo board this makes the WHOLE purchase a gamble, not just your down payment or the Toronto Condo Bubble. Are you Ready? Give me a call.
