Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Share on twitter
Share on facebook
Share on linkedin

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

Share on twitter
Share on facebook
Share on linkedin
Share on email

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 |
Environmental Law

By: 

Posted October 14, 2021

In the decision of Greenpeace Canada (2471256 Canada Inc. v. Ontario (Minister of the Environment, Conservation and Parks), 2021 ONSC 4521, released September 3, 2021,[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted October 1, 2021

This blog continues our exploration of the potential employment law consequences stemming from the degree of control a party exerts within a variety of business[...]
Blog |
Personal Injury

By: 

Posted September 27, 2021

Personal Injury lawyers and their clients are all too familiar with the carnage and suffering caused by impaired drivers.  Canada has the worst rate of[...]
Blog |
Bankruptcy and Insolvency, Business Law

By: 

Posted September 24, 2021

As is noted by the Court of Appeal in McEwen (Re), released August 12, 2021, referred to here as “Traders”, the BIA is a complete[...]
Blog |
Wills, Trusts and Estates

By: 

Posted September 23, 2021

In-Trust For Accounts have become a common way for parents and grandparents to set aside money to finance their children or grandchildren’s post-secondary education. A[...]
Blog |
Business Law

By: 

Posted September 21, 2021

We frequently work with small businesses on a variety of matters, from leasing to employment contracts. As the business becomes more successful, plans often turn[...]

Subscribe to Our Newsletter

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