Many condo purchasers choose to make a purchase offer without making it conditional on a review of the Status Certificate.
A typical offer usually includes a Status Certificate clause. This allows the potential purchaser to review condo documents. Typically, the seller has 10 days to deliver the certificate. The potential purchaser then has two days to review the documents and possibly make recommendations.
Potential purchasers are choosing to submit an offer without any conditions attached including the requirement for a Status Certificate review period. This approach is fraught with risk.
A Status Certificate provides information that is important for any purchaser to be aware of. The current owner may owe money for payment of condo fees or taxes. Illegal or unapproved renovations could become the responsibility of the purchaser if the condo corporation requires a suite be returned to a previous condition. If unapproved renovations include damage or removal of a load bearing wall, repair costs would be significantly higher. Knowledge of a previous fire or flood may impact on a purchase offer. Financials could show an inadequate reserve fund or debt situation requiring a large increase in condo fees or large special assessment. There may be one or more costly lawsuits involving the condo corporation that may result in significant payments.
Any of this could impact on the value of a condo suite and liability of an owner. Failure to include a Status Certificate clause and review of the Status Certificate does not absolve a new condo owner of liability for any of this.
Dimension III Real Estate Services Ltd. represents buyers and sellers of condo properties. Marty Kestenberg, Broker of Record, can be reached at email@example.com. Click here for a free market value summary for your property.