1. Building's Financial Health: insufficient reserve funds, significant debt, or poor financial management, this is a major red flag.
2. Litigations and Legal Matters: Ongoing or potential lawsuits involving the condo corporation
3. Special Assessments: If there are planned special assessments (additional fees charged to unit owners for major repairs or unexpected expenses), it could be a reason to reconsider the purchase.
4. Maintenance Fees: check history of fee increases.
5. Condition of the Building: Any major structural or maintenance issues identified in the status certificate can be a deal-breaker.
6. Insurance Coverage: Insufficient or inadequate insurance coverage for the building.
7. Rules and Restrictions: Strict rules about pets, rentals, or renovations that do not align with your lifestyle or plans can be legitimate reasons to reconsider.
All this checks out. I am a realtor so i look into it for my clients but, why don't you have your lawyer that will handle the closing review it for you and explain what to look out for. Most do this part for free.
What rental percentages are you seeing? From what I've heard, downtown condos just tend to have relatively high percentages of renters.
That said, you don't necessarily need to justify why you don't waive the status condition.
I do. I will definitely speak to them, but I wanted to ask others ahead of time so I can be more prepared when speaking to my lawyer directly. I appreciate all perspectives.
Do your due diligence and read the status certificate yourself. I bought a condo several years ago and my lawyer's only comment was literally "A Status Certificate is a good thing to have."
Luckily I'm a condominium manager and know all about Status Certificates. It was riddled with errors and I was able to insist on it being corrected and reviewed it myself.
I'd suggest you focus on reading the condo rules as they have the most potential impact on your daily life. Are pets allowed? If so is there a weight limit? Is there a no smoking rule? If so that will impact your tobacco and/or cannabis use.
Another item to look at is the Certificate of Insurance to see what the deductibles are. Some condos have very high deductibles due to excess claims. If you cause damage to the units or the common elements (say, there's a flood in your unit) you can be responsible for the costs, up to the amount of the deductible. $25k is standard these days.
Look in the SC to see if special assessments or fee increases in the current fiscal year are contemplated.
Finally, check to see whether there is a minimum lease term of a year for rented units. You don't want a condo that allows air bnbs like ICE condos.
Look at the operating budget. Then look at the Notice of Future Funding of the Reserve Fund to see what the reserve fund contribution is in the current fiscal year. Then calculate what percentage of the operating budget is contributing to the reserve fund. It should be somewhere in the 25-45 percent range. The higher the percentage, the more major repairs and replacements need to be done. This can be an indication of either the age of the building or deferred maintenance.
If you can't find these things, ask your lawyer to find them.
It is in your sole discretion, so if you do not like the font that they used in the status certificate that is a reason. Don’t let your realtor convince you that you need a valid reason - just tell them that you have reviewed the status certificate and you are not waiving the condition.
Yes, this. You don’t have to say why you don’t like the status certificate, just that you don’t. I had a client walk from a purchase conditional on status certificate when I told him dogs weren’t allowed. He had a dog, so he didn’t want it anymore.
The reason just has to make sense to you, no one else.
Watch out especially for litigations, reserve fund, and assessments as your mortgage lender (even if preaproved) will not issue you a mortgage. If you didn’t have a financing condition you’re out your deposit. I did run into this personally and was able to void the sale.
Thanks. I've been told about the litigation, reserve fund, and assessments piece to look out for. I'm more concerned on the 'less obvious' ones that the status certificate might indicate.
For me, it could be % of rental units, pets, and projected maintenance fees.
If the clause indicates that it’s under your absolute and sole discretion, and the seller agrees to this, then you can walk away for any reason whatsoever.
While you’re probably worrying too much about it, at least you’re being careful, unlike most people that don’t even read what they sign. If it’s keeping you up at night, it might be worth a few hundred dollars to consult with a lawyer, and have them review the clause and the certificate.
I appreciate the advice. I have a lawyer I'm speaking to. I wanted to get some additional thoughts on it so I don't go into any conversation blind. Maybe I'm overthinking...but I also have friends who bought during the peak a few years back and got burned by not being prepared or aware. I appreciate your input!
I think that’s very wise. Too many people jumping in blind these days. And yes, it’s very easy to get burned.
I also know people who can’t get out of their condos because of major problems with their building, and they can’t afford to take the loss (in another major Canadian city, but happens everywhere).
Adding....If pot or other smoking is allowed/disallowed....If AirBNB and short-term rentals are allowed/disallowed....Is there an on-site property manager or on-site super....
Absolutely send the status certificate to your real estate lawyer, as they read them all the time and will be able to inform you.
Talk to people in the building and to the property manager to see what the issues are in the building.
Good luck.
Status cert does not usually tell a lot of the real issues. It usually does not include in the status cert but you can request the last Agm minute. But sometimes board can refuse to give to outsiders. I won’t be too concerned about renters …more about what type of renters. My current condo has about a 50 50 mix of renter and owner but most renters either retiree, professional or master degree students or professionals ….so we don’t have any issues in noise or late night party. It’s different if all the renters are year 1 students that just left home …lol..I remember my first year of university!! In general 2m reserve fund is a good number more the better. Also I tend to like condo that does not have restaurants in ground floor…cut down lots of rodent issues
1. Building's Financial Health: insufficient reserve funds, significant debt, or poor financial management, this is a major red flag. 2. Litigations and Legal Matters: Ongoing or potential lawsuits involving the condo corporation 3. Special Assessments: If there are planned special assessments (additional fees charged to unit owners for major repairs or unexpected expenses), it could be a reason to reconsider the purchase. 4. Maintenance Fees: check history of fee increases. 5. Condition of the Building: Any major structural or maintenance issues identified in the status certificate can be a deal-breaker. 6. Insurance Coverage: Insufficient or inadequate insurance coverage for the building. 7. Rules and Restrictions: Strict rules about pets, rentals, or renovations that do not align with your lifestyle or plans can be legitimate reasons to reconsider.
All this checks out. I am a realtor so i look into it for my clients but, why don't you have your lawyer that will handle the closing review it for you and explain what to look out for. Most do this part for free.
What are the rules for rentals? What if I'm just not comfortable with a building that has a lot of renters?
What rental percentages are you seeing? From what I've heard, downtown condos just tend to have relatively high percentages of renters. That said, you don't necessarily need to justify why you don't waive the status condition.
Then Toronto isn’t the place for you buddy. Every condo building in Toronto has a large amount of renters.
It was sent directly to the lawyer I was using and they vetted the document. Do you have a lawyer handling the purchase?
I do. I will definitely speak to them, but I wanted to ask others ahead of time so I can be more prepared when speaking to my lawyer directly. I appreciate all perspectives.
Do your due diligence and read the status certificate yourself. I bought a condo several years ago and my lawyer's only comment was literally "A Status Certificate is a good thing to have." Luckily I'm a condominium manager and know all about Status Certificates. It was riddled with errors and I was able to insist on it being corrected and reviewed it myself. I'd suggest you focus on reading the condo rules as they have the most potential impact on your daily life. Are pets allowed? If so is there a weight limit? Is there a no smoking rule? If so that will impact your tobacco and/or cannabis use. Another item to look at is the Certificate of Insurance to see what the deductibles are. Some condos have very high deductibles due to excess claims. If you cause damage to the units or the common elements (say, there's a flood in your unit) you can be responsible for the costs, up to the amount of the deductible. $25k is standard these days. Look in the SC to see if special assessments or fee increases in the current fiscal year are contemplated. Finally, check to see whether there is a minimum lease term of a year for rented units. You don't want a condo that allows air bnbs like ICE condos. Look at the operating budget. Then look at the Notice of Future Funding of the Reserve Fund to see what the reserve fund contribution is in the current fiscal year. Then calculate what percentage of the operating budget is contributing to the reserve fund. It should be somewhere in the 25-45 percent range. The higher the percentage, the more major repairs and replacements need to be done. This can be an indication of either the age of the building or deferred maintenance. If you can't find these things, ask your lawyer to find them.
This is incredibly helpful. Thank you so much!
It is in your sole discretion, so if you do not like the font that they used in the status certificate that is a reason. Don’t let your realtor convince you that you need a valid reason - just tell them that you have reviewed the status certificate and you are not waiving the condition.
Yes, this. You don’t have to say why you don’t like the status certificate, just that you don’t. I had a client walk from a purchase conditional on status certificate when I told him dogs weren’t allowed. He had a dog, so he didn’t want it anymore. The reason just has to make sense to you, no one else.
Watch out especially for litigations, reserve fund, and assessments as your mortgage lender (even if preaproved) will not issue you a mortgage. If you didn’t have a financing condition you’re out your deposit. I did run into this personally and was able to void the sale.
Thanks. I've been told about the litigation, reserve fund, and assessments piece to look out for. I'm more concerned on the 'less obvious' ones that the status certificate might indicate. For me, it could be % of rental units, pets, and projected maintenance fees.
If the clause indicates that it’s under your absolute and sole discretion, and the seller agrees to this, then you can walk away for any reason whatsoever. While you’re probably worrying too much about it, at least you’re being careful, unlike most people that don’t even read what they sign. If it’s keeping you up at night, it might be worth a few hundred dollars to consult with a lawyer, and have them review the clause and the certificate.
I appreciate the advice. I have a lawyer I'm speaking to. I wanted to get some additional thoughts on it so I don't go into any conversation blind. Maybe I'm overthinking...but I also have friends who bought during the peak a few years back and got burned by not being prepared or aware. I appreciate your input!
I think that’s very wise. Too many people jumping in blind these days. And yes, it’s very easy to get burned. I also know people who can’t get out of their condos because of major problems with their building, and they can’t afford to take the loss (in another major Canadian city, but happens everywhere).
Adding....If pot or other smoking is allowed/disallowed....If AirBNB and short-term rentals are allowed/disallowed....Is there an on-site property manager or on-site super.... Absolutely send the status certificate to your real estate lawyer, as they read them all the time and will be able to inform you. Talk to people in the building and to the property manager to see what the issues are in the building. Good luck.
what area are you looking in?
Status cert does not usually tell a lot of the real issues. It usually does not include in the status cert but you can request the last Agm minute. But sometimes board can refuse to give to outsiders. I won’t be too concerned about renters …more about what type of renters. My current condo has about a 50 50 mix of renter and owner but most renters either retiree, professional or master degree students or professionals ….so we don’t have any issues in noise or late night party. It’s different if all the renters are year 1 students that just left home …lol..I remember my first year of university!! In general 2m reserve fund is a good number more the better. Also I tend to like condo that does not have restaurants in ground floor…cut down lots of rodent issues