- October 22, 2014
- Posted by: @dmin
- Category: Condo Property Management Services
A condo status certificate is somewhat self-explanatory: it is a certificate that provides you with information regarding a particular condominium unit and the corporation itself.
For example, these certificates provide information that you can use to determine whether a special assessment is imminent. Those types of assessments can arise in a number of circumstances, such as poor budgeting, inadequate reserve funding to cover major repairs and replacements of the building or common elements, and potential legal actions that may come up against the board/ owners.
Components of a Status Certificate
Status certificates may vary slightly in form, but generally contain the same components, which is a requirement under the Condominium Act. The condo management services company should understand these requirements and comply with the law when requested.
In most instances, a status certificate is required as part of a real estate transaction involving a condominium. In fact, it is so important that the Canada Mortgage & Housing Corp. (CMHC) may decline the provision of mortgage insurance if they are dissatisfied with how a condominium’s financial statements appear.
To be complete, a status certificate must contain a variety of items:
1. Financial information.
The certificate should inform the owner about the fees associated with a particular unit, including future anticipated increases and potential special assessments that are forthcoming, and a statement about the reserve fund. There should also be information about arrears and liens against a particular suite. This is perhaps the most important part of the certificate, as special assessments can have a big impact on condo ownership, and if not properly disclosed, boards may be obligated to waive their right to collect from a new resident who was not properly informed of upcoming expenditures requiring additional contributions.
2. Rules and regulations.
The governing documents for the entire condo community must be included in the certificate. That way, new residents are well-informed about rules and regulations. This should include a copy of the declaration, as well as the by-laws and any other rules and regulations that have been passed by the board. These documents will often answer many questions that residents have about parking, pet policies, use of common facilities, and other important matters.
Included in the financial information should be the budget for the community for the most recent time period it is available. This allows new owners to see how funds are going to be spent and gives them an opportunity to consider whether or not they agree with the current expenditures or if they want to make suggestions moving forward.
4. Management information.
Residents need to be aware of who provides the condo management services for their community so they know who to contact regarding certain issues and should receive a copy of the current management contract in order to understand which duties and tasks are covered by the property manager and which are left to the board. Contact information for these entities should also be provided, including any emergency hotlines so that residents know where to turn when after-hours issues arise.
5. Reserve Fund Study.
Condo corporations are required to deliver to each owner, a copy of the Reserve Fund Study along with the Board’s proposed funding plan of the reserve for future major repairs and replacements.
Any insurance policies the condo corporation has in place should be provided so that residents know what is covered and who is covering it.
If the corporation is involved in any legal actions, whether as a plaintiff or a defendant, the residents should be aware of that fact, as well as important details about such lawsuits.
This covers most of the information required under a status certificate. If you know someone who is struggling with problems involving a status certificate, you should provide them with this article as a helpful resource and send it via email or their favourite social media network.
Requesting a status certificate from your condominium management company should not be a difficult process. ICC® has many different ways people can obtain a certificate when needed: either by coming in person to the ICC® head office in Markham, sending a written request via email, regular mail, fax or by attending the site office in your condominium. Individuals may also request a status certificate online through our website at www.iccpropertymanagement.com.
A request form is always required, though ICC® provides them on-site if needed. All requests must contain the name and phone number of the person that ICC® must contact with regard to the certificate in order to be valid. There are also fee requirements in order to compensate for the administrative expense that goes into preparing these types of reports.
Providing status certificates is just one of the many condo management services that ICC® handles on behalf of its communities. This vital function is highly important and both condo owners and Toronto condo management companies should stay up-to-date on what is required out of these important documents in order to remain in compliance with the law.