Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Buying a Condominium in Today’s Market ? Think Twice Before Making an Unconditional Offer

Buying a Condominium in Today’s Market ? Think Twice Before Making an Unconditional Offer

By:

Posted August 11, 2020

COVID-19 has certainly not prevented the real estate market to rise. In fact, since the pandemic, the real estate market has been hotter than ever. However, a hot real estate market, comes with a larger price. Properties are being sold way above the listing price and Purchasers are making unconditional offers without conducting any due diligences (i.e without conditions pertaining to financing, inspection, water potability testing, Condominium Status Certificate review, etc.). This has left many Purchasers experiencing issues with their closings and potentially facing a lawsuit as a result of not being able to close their purchase transaction.

Of particular popularity in this hot market are condominiums.

When purchasing a condominium, a Purchaser will want to ensure that there is a condition that his/her lawyer review a Status Certificate/condominium documents. The consequences of excluding such condition in your Agreement of Purchase and Sale can be fatal.

What is a Status Certificate ?

A Status Certificate is a document prepared by the Condominium Corporation which reports on the financial and legal status of the Condominium Corporation. Pursuant to the Condominium Act, a status certificate must report the following information:

  • Condominium fees for the unit and any payment default by the current owner of the unit;
  • Increases in the condominium fees for the unit since the Budget for the fiscal year;
  • Any special assessments that the Condominium Corporation has levied against the unit since the Budget for the fiscal year, to increase contributions to the reserve fund or general operations fund;
  • The current Declaration, By-Law and Rules/Regulations;
  • All applications to amend the Declaration for which a Court has not made an Order;
  • All outstanding Judgments against the Condominium Corporation and the status of all legal proceedings to which the Corporation is a party;
  • The Condominium Corporation’s Budget for the fiscal year, the last annual audited financial statements and the auditor’s report on the statements;
  • Most reserve fund study and updates;
  • The reserve fund balance no earlier than at the end of a month within 90 days of the status certificate;
  • Current plans to increase the reserve fund;
  • A statement of any additions, alterations or improvements to the common elements, those changes in the assets of the Condominium Corporation and those changes in a service of the said Corporation that are substantial that the Condominium Corporation has proposed but not implemented;
  • The number of leased units during the fiscal year; and
  • A statement of any amounts that the Condominium Act requires to be added to the condominium fees for the unit.

Should you buy a condominium without a Status Certificate/condominium documents?

Although there is no legal obligation for a Purchaser to obtain and have a lawyer review a Status Certificate/condominium documents when purchasing a condominium, proceeding without same is ill-advised and risky. Not only can the information revealed in the Status Certificate and accompanying documents affect a Purchaser’s use and enjoyment of the property (i.e restrictions on smoking in the condominium building, restrictions on having pets, limitations on renovating a unit, not having ownership of a parking/locker unit, etc.), but it can affect your finances.

If a Purchaser is obtaining financing through a financial institution/lender to purchase the home, the financial institution/lender will require that a Status Certificate and accompanying condominium documents be obtained and reviewed, regardless of whether or not the Purchaser wants to obtain same. Any negative information revealed in the Status Certificate/condominium documents such as legal proceedings involving the Condominium Corporation, special assessments and a low reserve fund balance can result in a Purchaser’s financing with a financial institution/lender being declined and falling through.

The review of a condominium’s Status Certificate and accompanying condominium documents by a legal professional is an important step that a Purchaser should not ignore.

This blog post was written by Stephanie Simard, a member of the Real Estate and Family Law teams.  She can be reached at 613-369-0385 or at stephanie.simard@mannlawyers.com.

More Resources

Blog |
Business Law, Wills, Trusts and Estates

By: 

Posted June 28, 2022

As entrepreneurs, we tend to be optimistic people – that is what I have found, for the most part, and what seems to be part[...]
Blog |
Business Law

By: 

Posted June 20, 2022

The Federal Government of Canada recently launched the Canada Digital Adoption Program (“CDAP”) run by Innovation, Science and Economic Development Canada (“ISED”). It is a[...]
Blog |
Estate Litigation

By: 

Posted June 13, 2022

Trust companies are often faced with a dilemma when the fees associated with the administration of a testamentary trust exceed the income generated by it. [...]
Blog |
Environmental Law

By: 

Posted June 6, 2022

On May 10, 2022, the Alberta Court of Appeal released its opinion in Reference re Impact Assessment Act (the “Act”), 2022 ABCA 165, on the[...]
Blog |
Personal Injury

By: 

Posted May 30, 2022

As the warm weather of summer approaches, the number of cyclists enjoying Ottawa’s shared path system is increasing day by day. I have noticed that[...]
Blog |
Family Law

By: 

Posted May 25, 2022

Cohabitation agreements and marriage contracts (or “prenups”) are common contracts for couples to enter into prior to moving in together or getting married. Reasons for[...]

Subscribe to Our Newsletter

Name*
Consent*
This field is for validation purposes and should be left unchanged.