When you purchase a brand new condominium there is a ten-day cooling off period. This means that you have ten days to cancel the deal. The start of the ten-day period is the later of the date that you receive the disclosure statement from the builder and the date that you receive a copy of the agreement of purchase and sale signed by both you and the builder. Unlike brand new condominiums, resale condominiums have no such cooling off period. This means that absent any other conditions in the contract, once you sign, the deal is firm. However, there is one way that you can protect yourself against any surprises that may arise after closing, when it will be too late.

Both your real estate agent and your lawyer can work to protect your interests as a purchaser when you buy a resale condominium. A clause can be inserted into the contract which will make your offer conditional upon you being satisfied with the condominium corporation’s status certificate. A status certificate is a written document which is issued by the condominium corporation. Along with the actual certificate, you will receive other documents which will provide you with invaluable information concerning the property you are considering purchasing. There is a fee for the status certificate, but it is money well spent.

The status certificate will provide you with a great deal of information which you will want to know before your offer to purchase becomes a firm one. It will tell you whether or not the vendor has paid its share of the common expenses and whether or not there is a lien on the unit you are purchasing. It will tell you if the condominium corporation has levied a special assessment against the unit you are purchasing and how much money is owing for the unit. It will tell you whether or not the condominium corporation has been sued or owes money to any creditors. It will tell you how much money the condominium has in its reserve fund for emergency repairs. It will tell if the condominium corporation is considering doing major repairs to the building and the costs of these repairs. Finally, obtaining the status certificate will also entitle you to various financial reports which indicate how the condominium is doing from a financial point of view.

You may wonder why you need all of this information. There is a simple answer to that question. If you purchase the condominium without considering all of these matters, you as the unit owner may inherit all of the financial obligations that may arise after closing. For instance, if the condominium corporation declares a special assessment requiring the unit owner to pay for some repairs to the building and you do not learn of this until after closing, you will be responsible to pay for your unit’s share of the repairs. One way to protect yourself is to obtain the status certificate prior to firming up the deal and negotiating any outstanding issues with the vendor prior to closing. Surprises are nice on birthdays. They are not welcomed after closing a real estate deal.

Your real estate agent can draft a clause in the Agreement of Purchase and Sale which will provide your lawyer with time to review the status certificate and identify any potential problem areas. Your lawyer can review the status certificate with you to advise you of any potential liability that you may be assuming.

Taking precautions when purchasing a resale condominium is worthwhile. Using your team of professionals can ensure a hassle-free and smooth closing.