Step 14 to Buying a Home: Review the Condo Documents
If you’re buying a condo apartment, condo townhouse, POTL (parcel on tied land) in Toronto and the Greater Toronto Area in Ontario, a condo document needs to be reviewed by the lawyer ASAP. In some cases, prior to putting an offer if the condo status certificate is available. This document needs to be updated if longer than 30 days since the date of issue as there might be crucial changes that has happened outside of this date. This condo documents contain but not limited to the condo declaration, status, financial, by-laws, special assessment, etc. This gives the buyer a snapshot of the condo building’s financial and legal standing. This is important especially if you’re on a budget. You don’t want to be slapped with a high special assessment as a result of a legal proceeding or maintenance issue that needs to be addressed immediately. It is not wise to waive this condition until it has been reviewed by a lawyer. It takes about 10 days after the request and 1-3 days for a lawyer to review these lengthy document so take this into consideration when you are deciding on a closing date especially if you need to put a 60-day notice with your landlord if currently renting.
A condo status can say a lot about your condo other than the ones mentioned above. These have to be reviewed by a lawyer (normally, the buyer’s lawyer) in order to determine if it’s suitable for the buyer such as:
a) Pending or standing law suit against the condo. Since this will affect the future financial stability of the condo and its owners, this is a big thing for the buyer’s lawyer and may jeopardize lender approval for the buyer.
b) Number of current rental units in the building. Some lenders will not lend to buildings that have too many rental units.
c) Restrictions. Some condos may have really strict compliance with regards to pets, wall colours, renovations, to name a few. Make sure that you review these restriction found in the condo rules and declarations.
d) Any renovations that were not approved by condo board? This will come back to haunt you if they discover this under your occupancy and may cost you a lot of money should they decide that you need to put it back to original which you probably have no clue how it looked like.
Long story short, these details should be reviewed by the buyer’s lawyer and you ‘cuz at the end of the day, you’ll be the one living in it.