Prospective condo purchasers should look carefully into the financial health of a condo association prior to buying. The status certificate can help provide answers to important questions, such as:
- Is there a lien against the particular unit, or any fees still owed?
- Were there any special assessments levied in the past, or will there be in the future?
- How healthy is the reserve fund? Is there enough money for future replacements when needed?
- Are there any ongoing legal affairs that could result in a future financial reward or penalty following a settlement?
Once you purchase a condo unit, you’ll receive a copy of the audited financial statements, which include items such as the audit report, balance sheet, statement of revenue and expenditures, and additional notes.
Prior to purchasing a unit, here are some additional things to look for:
- Make sure the corporation has a clean audit opinion.
- Be sure they’re in compliance with the Condominium Act.
- Confirm that the reserve fund is adequately funded.
- Check if there’s an operating surplus of 1-2 months’ savings.