15 Things To Know Before Buying A Condominium Continued…
7. Get a Status Certificate
Purchasing the “Status Certificate” allows you to find out a great deal of information about a condominium and should purchased before you firm up the offer. They cost $100 and are worth it. The easiest way to do this is to have you agent make the offer conditional for 10 days to allow you to obtain the certificate, review it with your lawyer and be satisfied with its contents and attachments. The certificate will contain the following information, among other things:
- confirmation of the amount of the reserve fund
- whether the unit you are buying is up-to-date for common expense payments
- whether there are any large increases in monthly common expenses being considered
- whether there are any special assessments being considered
- whether the corporation is a party to any legal actions
- a copy of the current budget
- the most recent audited financial satements
- copies of the condominiums Declaration, By-laws and Rules
8. The Agreement of Purchase and Sale – Older Condominiums
Local or provincial real estate associations have developed standardized forms specifically designed to be used when purchasing a condominium. Ensure your offer uses the correct document for condominiums and contains a condition allowing you time to get a status certificate. Being pre-qualified for the loan before you make an offer will allows you to be prepared in know what you are able to afford and offer.
9. The Agreement of Purchase and Sale – New Condominiums
Most agreements contain provisions setting out any additional costs may be charged back to the buyer at the time of final closing, called “adjustments”. It may be possible to negotiate some of these charges. These provisions must be read carefully as they can easily increase your purchase price. Make sure to revise this with your lawyer.
Be prepared for additional deposits before you firm up your offer. Make sure you have those funds available.
In a new condominium, it is not unusual for you to be asked to take occupancy of the unit months before the developer is in a position to transfer the ownership of the unit to you. During this “occupancy period” you must pay an occupancy fee to the developer. When budgeting for your purchase, you should ensure that you have at least three – six months worth of occupancy fees available.
10. Disclosure Statement – New Condominium
This is a package of information about a new condominium that is to be built or is under construction. It contains much of the same information as the Status Certificate. When buying a new condominium unit from a developer, a purchaser is guaranteed a 10 day “rescission” period, within which they can review the disclosure package. If you and your lawyer are uneasy about anything within the document, you can rescind your offer to purchase and receive your deposits back.