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There are a large number of documents that buyers of condominiums need to review prior to purchasing a condominium. Normally a condition will have been written into the purchase agreement that gives time for the seller to supply the documents and for the buyer to review them prior to the buyer agreeing to proceed with the purchase. There are important reasons for having each of the documents, most are essential but some will only be necessary depending on the situation. In the event that some or all of the documents are unavailable there should either be a valid explanation as to why or it could be an indicator of there being a problem. Your Realtor can assist you with obtaining the required documents.
A list of the required documents, and a brief explanation of each is given below:
Property Title
Provided by Alberta Land Titles, this document records who the current owner of the property is, how much money is owing on the property, any liens or restrictive covenants and the legal description of the property. Red flags would be if the seller is not the person registered on title, or if there are others registered on the title that are not part of the sale agreement; if the amount owing on the property is close to, or more than the sale price; if there are any other liens (loans) on the property that could prevent the sale proceeding: or, if there are any restrictive covenants that would limit your ability to utilize the property in the way that you desire.
Condominium Plan
Provided by Alberta Land Titles, this document provides the registered size, correct unit ownership, parking ownership, method of measurement, unit factors, type of condo, post tension cables and other information. Check that the registered size is what the seller is claiming; what is included in the measurement of the unit and that the sellers does in fact own the correct unit; whether any parking/storage etc is owned, leased or assigned to the seller; how the unit is measured as different condos can be measured in different ways; what the unit factor is as this is related to the size and therefore also the amount of condo fees paid; type of condo (i.e. conventional or bare land); existence of any post tension cables which may then trigger further investigation as to when they were last examined.
Condominium Additional Sheet
Provided by Alberta Land Tiles, this document contains all the registrations against the condominium plan such as charges against the Corporation, caveats, easements, re-divisions, registration dates of the Bylaws, amendments to the plan, change of the Board of Directors. Specific things to look for are, the dates of the most recent Bylaws to make sure that the Bylaws that the seller has provided are the most recent; whether there are any charges against the condominium corporation.
Condominium Bylaws
Available from Alberta Land Tiles, the condominium board or the condominium management company. This is the complete set of rules governing the use of the condominium complex (i.e. what owners can and cannot do and what the condominium corporation can and cannot do). Specifically what to look for are things that could impact your use as an owner, including restrictions such as age, pets etc, rental guidelines, what the condominium fees pay for, your responsibilities as an owner and the condominium corporations responsibilities as the corporation governing the use of the building.
Current Financial Statements of the Condominium Corporation
Available from the condominium board or the condominium management company, these documents show the current financial health of the condominium corporation. Things to look out for is, whether there is an annual surplus or deficit; whether there is an up to date reserve fund study; how much is actually sitting in the reserve fund; what the net worth of the corporation is on the balance sheet; whether there are any special assessments or large expenditures; other comments that could prove to be a negative or positive.
Condominium Corporation Budget
Available from the condominium board or the condominium management company, this document details future expenditures and how they will be financed. In particular, look for, any indications of large expenditures, condominium fee increases or special assessments.
Statement of Monthly Condominium Contributions
Available from the condominium board or condominium management company, this document specifies the condominium fees payable and how they are calculated. Make sure that the amount specified on this document is what the seller is claiming.
Minutes of any Condominium Corporation Meetings (Annual General Meeting, Board Meetings etc)
Available from the condominium board or the condominium management company. Things to look for include, planned expenditures; outstanding or incomplete work; re-occurring issues; budget/fee changes; whether you have all the minutes or whether some are missing; whether there are any other issues that could be seen as ‘red flags’.
Condominium Corporation Special Resolutions
Available from the condominium board or the condominium management company, these documents will indicate any other issues that may need to be addressed. If there has been a Special Resolution, check what it was for; how much was/is for; when payment is due; whether it is an ongoing issue or just a ‘one-off’.
Condominium Insurance Certificate
Available from the condominium board or the condominium management company. It is the condominium corporations responsibility to insure the building. Make sure that the insurance certificate is up to date and has not expired.
Condominium Lease Agreements
Available from the condominium board or the condominium management company, this document specifies any lease agreements and exclusive use with any portion of the condominiums common property. You need to know what it is for (e.g. parking, storage), when it is due, how much it is, where the item is located. If the parking stall is owned you need to pull a separate title for that (see ‘Property Title’ above).
Condominium Management Agreement
Available from the condominium board or condominium management company, this details the agreement between the condominium corporation and the management company as to what services will be provided. You will need the contact details of the management company to obtain any other documents/information that is missing.
Recreational Agreement
Available from the condominium board or condominium management company. This will detail what recreational facilities are available, how much they cost, how often they are due and when the next payment is due.
Statement of Structural Deficiencies
Available from the condominium board or condominium management company. This indicates any deficiencies in the buildings structure that the condominium corporation is aware of. You need to identify what is wrong? How significant is it? How and when is it going to be fixed? How much is it going to cost? Has the condominium corporation planned for it?
Condominium Statement of Amount of Capital Replacement Reserve Fund
Available from the condominium board or condominium management company. This indicates whether there is enough in the reserve fund to cover the cost of replacement of capital items. check whether it compares favourably with the reserve fund plan, that (within reason) it matches the balance sheet and that it is current.
Condominium Reserve Fund Report
Available from the condominium board or condominium management company. This states what major expenditures, replacements, repairs are likely to be needed at different stages throughout the lifespan of the property. Compare the current age with the expected lifespan. What has been replaced recently and what needs to be replaced soon? Has anything not been done that the Reserve Fund Report indicated should have been done by now?
Condominium Current Reserve Fund Plan
Available from the condominium board or condominium management company. This details how the current contributions to the Reserve fund are planned against future expenditures. Things to look for are; are they on track? Does the reserve fund balance make sense? are any special assessments planned?
Particulars of Post Tensioned Cables
Available from the condominium board or condominium management company. This document will detail any post tension cables used in the construction of the building. You will need to note when they were last inspected and whether there are any problems.
Statement of any Amount Due and Payable for any Unit
Available from condominium board or condominium management company. This will detail whether there are any outstanding payments due for any of the units within the complex and how much is owing. If there is money owing you need to establish who is paying for it.
Statement of any Action Commenced Against the Condominium Corporation
Available from the condominium board or condominium management company. If any actions have been commenced against the corporation you need to know what they are, whether it has been resolved, whether payment is still outstanding, what the implications are for the corporation and owners of each unit.
Particulars of any Unsatisfied Judgement for which the Condominium Corporation is Liable
Available from the condominium board or condominium management company. This will specify any judgement or order for which the condominium corporation is liable. You need to identify what the settlement plan is, how much is involved and when will it be settled?
Particulars of any Demand Made on the Condominium Corporation in Excess of $5,000
Available from the condominium board or condominium management company. This will specify any other claims exceeding $5,000 that have been made against the condominium corporation. Again, you need to identify what the settlement plan is, how much is involved, and when it will be settled?
Condominium purchase contracts and the condominium documents required are complex and it is advisable to use a professional when completing and interpreting them.
