Wednesday, January 12, 2011

Condominiums and Status Certificates

If you are considering purchasing a condominium, you will no doubt have heard about status certificates. These are documents which are provided by the condominium corporation you are buying into, which outline a number of things about the condo and the building. Ontario law dictates fairly strictly what needs to be included in the package of information that accompanies the certificate. The purpose of this is to allow you and your lawyer some time to have a look at the operations of the condo corp, the financials, the specific condo unit and any issues pertaining to unpaid condo fees, damages, etc. It will also disclose whether the unit you are thinking about buying has a locker or parking space and it will disclose how the condo fees are arrived at for your unit.

There is a lot to a package like this. Most real estate lawyers will review this package for specific issues which might impact your decision on whether to purchase. This is typically part of the work that a lawyer does on a condominium purchase file. But it also makes sense to have a look yourself, especially at the summary of information that is contained in the first few pages. Working together with your lawyer and real estate agent, you want to do everything you can to ensure that you are getting what you think you are getting. The status certificate is an important tool in the arsenal of your real estate team.

Thanks to Stephanie Adams for suggesting this topic!

Mortgages and Fire Insurance

Just had to tell a client today that I could not help them close a mortgage on a farm property because, unfortunately, the house and other building on the farm were not insurable. Old knob and tube wiring means it's pretty tough if not impossible to get fire insurance. And no fire insurance means no mortgage. The owner of the farm was quite upset. I had to explain that fire insurance is required because it protects the interests of the lender in the property. If a fire was to destroy the building, and no insurance was available to rebuild, the property value would decrease significantly and, in the event of a default, the lender may not be able to recoup its investment when it sells the property under power of sale or foreclosure. So electrical work should be the first order of business for owners of older homes, both for safety and for financing.