Before you commit to making an offer on a condo you like, put status or estoppel certificates on your must-have list of red flags for buyers and have a condo assessments list too.
They can tell you what condition a building is in — and whether the condominium corporation has the reserves it needs to fix the eight most common red flags for buyers, like leaky windows. Home maintenance red flags for buyers may seem like the least of your worries when you condo shop in Ontario. Compared to finding a place to live in a red hot real estate market, what’s the big deal anyway?
We see your point, but spotting those red flags for buyers is the key to keeping your condo affordable. Because not only are you responsible for your own unit, but you could be liable for one-time special assessments for areas you rarely use, like parking garages or hot tubs.
So now you know condo ownership is a little more complicated than you thought, let’s get a copy of the status certificate from the seller’s condominium corporation.
How to Evaluate a Condo Association or Corporation
Start by checking the status certificate for the eight most common red flags for buyers.
Unit Assessment Out of Bounds
Is the unit assessment similar to others in a building of comparable size? Does your unit have extra features, like a patio or fireplace that could justify why it costs more? Find out what the assessment covers and how garbage pickup, snow removal, and common area maintenance are managed. More importantly, are assessments within your monthly budget and when are increases expected?
Special Assessments on Condos
What are special assessments on a condo? They’re an extra levy condo owners are charged:
- for unexpected expenses, such as insurance deductibles for extreme weather damage
- when the reserve fund is low or depleted
- or to cover legal fees or settlements.
While condo corporations are insured for unexpected events like severe rainstorms, the deductible may exceed the building’s reserves. Reserve funds that are mismanaged may be especially hard pressed to pay for extraordinary expenses. Even a lawsuit against the condo corporation can deplete the reserve fund, resulting in owners being handed a notice of special levy. It’s just another red flag for buyers.
Inspect your new home before you take possession – buyer’s right to inspect.
Past the Expiry Date
HVAC (heating, ventilation and air conditioning) systems past their expiry date may need expensive repairs or replacement. Check the status certificate for annual and periodic maintenance plans.
Strata council minutes can identify if other owners are having problems you might encounter. Mould and ventilation issues can spell costly repairs for individual unit holders or the building itself. Two to three years of minutes can reveal home maintenance red flags for buyers
What’s the Budget?
A condominium corporation’s annual operating budget and end-of-year financial statements can explain unit assessments that seem out of whack compared to other desirable buildings you are considering. They tell if the building is well managed or assessments are going up because of poor financial advice. Are common area fixtures owned or leased? Lease costs can be an ongoing and additional expense that add to your monthly assessment.
If the answers you come up with seem incomplete, ask the condo corporation directly, how do assessments work on condos?
Buying your first condo — what you need to know.
Postal worker slipped and fell? Dog bit a condo owner? Verify if the condominium corporation is facing any legal action that could result in special, one-time assessments.
Reserve Fund Health
Does the building have a healthy reserve fund for ongoing major repairs, like resurfacing the parkade or replacing common area carpets? Major repairs or replacements not covered by a new home warranty are every owners’ responsibility. Wear and tear or accidental damage to a unit are yours alone.
A review of the condo corporation’s technical audit or reserve fund study will give you vital information about the building’s shape. You can always hire an accountant or condo consultant to advise if the reserve fund seems sufficient.
Home maintenance red flags for buyers in reserve funds.
How old your unit is will determine if it is covered by the Tarion one, five and seven year new home warranty. New homes have to meet Ontario Building Code standards and be fit to live in. Your warranty covers extras, like water penetration, building defects the contractor is responsible for preventing and major structural failures. Check the status certificate for building claims for common areas.
What your Tarion new home warranty includes.
What is an Assessment in an HOA?
If your condo is a newly developed neighbourhood with shared amenities like a pool, golf course, or marina, enquire if homeowner association (HOA) fees are charged for operating and maintenance expenses. Being dinged for HOA fees plus monthly condo assessments can leave you house rich and cash poor.
Why You Need a Real Estate Lawyer
Axess Law’s licensed real estate lawyers review your agreement of purchase and sale when you condo shop in Ontario. We check status certificates for red flags and look for legal issues in pre-construction purchase contracts or assignments for sale.
Our real estate lawyer in Toronto, Greater Toronto Area, and Ottawa services process legal documents from realtors and mortgage lenders to close your deal on time. You meet mortgage discharge and financing deadlines and satisfy subject-to-conditions or we negotiate with the seller’s lawyer to extend your contract.
See what information your Axess Law lawyer needs to close your deal.
A title status certificate review by lawyers can find outstanding financial or construction liens that delay or even stop your purchase. Finally, we check to ensure you have a condo insurance certificate, required to guarantee buyers have fire insurance for condos before they take possession.
Our lawyer fees are all-inclusive. Expect no surprises or extra fees when you receive your statement of adjustment, just our regular, low flat fees and great service.
Buying or selling – what your lawyer does.
Flat Fee Real Estate Services
Short deadlines or complex mortgage arrangements are no problem when you hire Axess Law’s flat fee real estate lawyers. Our qualified Ontario real estate lawyers charge $999.99 and up plus HST to buy a condo or $799.99 and up plus HST to sell your pre-construction or resale condo.
Book an Appointment Online or By Phone Today
Dial 647-479-0118 to close a real estate deal for your next condo. Booking appointments online with our easy-to-use booking form takes minutes of your time.
Meet in person at any of our Axess Law locations near you if you prefer. Call toll-free to 877-402-4207 or drop by. We have open offices 7 days a week. Parking is on-site and transit stops are nearby.
No time, no problem. We have a convenient day or evening appointments to fit your schedule.
Virtual Real Estate Lawyer Services
Our virtual lawyer service can remote you in by video conference anywhere in Ontario. Axess Law uses only confidential, secure video conferencing software. We make e-signing easy or, when you just can’t get away, deliver documents to your home or office.