If your client is considering buying a residential condominium, it is very important to obtain, and carefully review, the status certificate from the condominium corporation. Reviewing the status certificate before the client waives any condition in the agreement of purchase and sale is an important step to protecting the asset your client may purchase and limiting your client’s risk after closing.
What is a status certificate?
A status certificate is a document that condominium corporations must provide to prospective purchasers of units on request. A condominium corporation has an obligation to take reasonable steps to ensure that the content of the status certificate is accurate. The information contained in the status certificate binds the condominium corporation on the date it is given and a prospective purchaser of a unit is entitled to rely on it.
Be aware that the condo board or the property management company can charge up to $100.00, including all applicable taxes, to prepare the status certificate.
The purpose of a status certificate is to ensure prospective buyers have enough information to assist them in making an informed purchase. It contains essential information about the physical and financial status of the condominium corporation, including any outstanding or expected claims or liabilities, major projects, or costs. It is essentially an overview for a prospective purchaser and it should flag in clear language any financial concerns that should prompt a prospective purchaser to dig deeper.
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