When selling a townhome, must a status report be presented in order to complete the sale? If so, who pays for this report, is there a standard cost, and does it have an expiration date? – FACT CHECKING
Status certificates have grown increasingly important in the past decade. They are now the most significant document in terms of condo ownership. Most banks and lawyers will insist on seeing a copy of the status certificate prior to closing, which makes it prudent to assume you’ll need one.
The certificate itself is substantial. It contains important details, such as the amount of your monthly condo fee. It outlines rules that may be specific to the condominium, such as limits on pet ownership. It lets you know if the current owner of the unit is behind on any payments, and provides insight into the financial health of the corporation by detailing how much money is in the reserve fund study (aka the corporation’s savings account). The status certificate will tell you if the corporation is contemplating a special assessment, or if they’re in a position to handle unforeseen expenses. Many pages will likely have little or no information relating to the sale specifically. More often than not, these have been assumed from the original condo corporation records.
A status certificate provides a snapshot look at the state of the corporation, which tends to vary over time, like the balance of a personal bank account. For that reason, a status certificate is typically understood to be valid for 30 days from the date of issue.
The standard cost to obtain a status certificate is $100, payable to the management company. The question of who pays for the document depends on the listing agent’s approach, and how the offer(s) are prepared.
Obtaining a copy of the status takes time. By law, when a status certificate is ordered, the management company is allowed ten days to produce it. Because many of today’s offers are drafted with few or no conditions, this 10-day waiting period can be an obstacle when trying to land a firm sale. Some management companies offer expedited service for status certificates, but this comes at a (small) cost and is not always available. I recommend that condominium sellers pay the $100 standard fee themselves, and have a status certificate generated when listing their property.
PRO TIP: When the status certificate is available, prospective buyers (along with their agents and lawyers) can review it before making an offer, which can shorten or eliminate the need for a status condition. Due to the 30-day expiry, almost every status certificate will “go stale” before closing. If a lawyer sees anything concerning, they can connect with the management company and ask for an update. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.