Why the seller or listing agent should order the Condo Status certificate package

Condo status certificate should be available at listing time

What is the condo status certificate?
This is a package of information which contains extensive detail on the legal description, governance, policies and finances of a specific condominium corporation.  It is prepared by the Condominium Property Manager and is a snapshot at a certain point in time, meant to provide pertinent details to a potential buyer and their lawyer, concerning that condo and the unit being purchased.

What is the critical information contained in the package?
All of the information is important but the key things include the Declaration which details the legal description and governance rules under which the condo was created.  The budgets and status of the reserve fund are very important, as is whether there are any pending lawsuits or special assessments.  Condo rules and policies are critical, too.  Ie if an investor wants to rent out a unit, they will need to know what rules are in place. Ie short term rentals may be ruled out thus Airbnb or other short term rentals may be excluded.

What is the typical review process?
These are normally ordered from the Property Manager by the buyer’s lawyer, once a conditional sale has been agreed between buyer and seller.  The Property Manager has 10 business days to update/research and produce the package and make it available for buyer and lawyer review. Normally, this gets done in 5-7 days and some Property Managers also offer an expedited service for a higher fee.  Normal fee for the package is $100 and we have been quoted up to $200 for expedited service.  The lawyer pays this and the delivery charge and gets reimbursed by the buyer.

The lawyer then reviews the package and highlights any unusual circumstances for the buyer and answers any specific buyer questions.

What’s wrong with this process?

Lost buyers and time lag:
Often there can be information contained in the Status package that may cause a buyer to rethink their interest in the unit or the price they might be prepared to pay for it.  If this is so, the buyer may walk from the deal and the unit remains unsold.  Other interested buyers may have moved on by this point and be lost to the seller as prospective buyers, especially given the lag time between the agreement and buyer and lawyer review of the status package which is typically 7 or 8 days after agreement.

Buyer feels committed to purchase at time of agreement:
There is also a psychological tendency for buyers to want to complete a deal once it has been made and they often do not pay enough attention post agreement to details which may deter them from completing the deal.  For this same reason, there is a “cooling off” for new construction condo purchases (often sold in high pressure, if not timeshare manner) while buyers and hopefully, their lawyers review all the detailed information in the new construction or pre-construction condo.
Disclosure package. Unfortunately, in the case of resale condos, the seller pays a big price should the buyer get cold feet while awaiting the condo package.

Sale falling through delays seller plans and may leave a stigma:
When a conditional sale falls through, it listing gets put back on the active market but this takes some time and there may be a question mark or stigma attached to the listing.  Other buyers and their Realtor will be asking: why did that sale fall through?  Is there something wrong with the property? Something come up on inspection? Something in the condo docs?

Best practices recommendation:
The seller or listing agent should order and pay for the condo docs (currently, this done by the buyer’s lawyer or agent) , so they are available at time of listing for interested parties to peruse prior to making an offer to purchase.  If this is done the buyer, their agent and lawyer can clarify any details in the condo documents and make a better informed purchase decision.  This is guaranteed to help minimize the number of sales that are currently falling through (which are at an all-time high, 10-15% in our opinion) and potentially set up a multiple offer situation for a condo seller.

$100 seems like a pretty inexpensive way to do all the above, don’t you think?

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com
Oasisrealtyottawa.com

If you have any comments on this post or any other real estate matter, feel free to indicate below!

 

 

Smoking cannabis at home compromises market value and marketability of real estate

how does cannabis smoke affect home sellers?

As Canada starts a brave new world with the legalization of cannabis, we have to remind all property owners about the dangers of residual smoke and its impact on market value.  Here are a few things to think about:

Most buyers aren’t smokers: Only about 20% of adult Canadians smoke tobacco and non-smokers are very sensitive to residual smoking odours and shun properties that exhibit a long term smoking habit.  We have had buyers enter properties for showings or open houses, who immediately turned around and left the property after smelling cigarette smoke.  These non-smokers will be equally not interested in a property with a heavy cannabis smoke residue.

Ambient odour often unknown to owners: As with many other household odours, the degree of smoke smell may be under appreciated or even unknown to those who live there every day, as one gets accustomed to it.

This is why buyers entering a property for the first time should “listen to their nose” upon first entering a property, as this is the best time to detect potentially out of bounds smells.  A damp basement is usually a giveaway from the first moment of entering, for example.  After a few minutes, however, our perception adjusts and the odour is not as prevalent at a cognitive level.

Hard to remove: Long term smoking in a property is not easily or inexpensively remedied and buyers will either walk away completely or very much de-value a potential property, to facilitate the remediation.

Growing personal marijuana: 4 plants per household should not create a major mould worry but will people stop with 4 plants? The “grow op” stigma created over the last few decades will be a tough one to shake and even if legal, we suggest those selling remove any and all plants and materials from their property prior to listing.  Why turn off even one buyer?

Don’t think it is OK to smoke in the garage: Many wisely smoke outdoors but just as many feel that smoking in the garage is OK.  Doesn’t help much with most buyers in our opinion, so smoke outdoors or better yet, not at all.  This applies equally to tobacco and cannabis.

Stigma remains: Hopefully, your neighbours are not big smokers, either-as this may scare away many buyers also.  Though this may fade as legalization moves forward, the stigma attached to cannabis smoke odour will impact sellers and buyers for some time.

Renters and medical marijuana users: These are two legal battlegrounds we can expect to see unfold in the coming months/years with legalization.  This will be an interesting challenge for both investor owners and corporate rental building owners and managers.

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692 oasisrealty@rogers.com
Ottawa, Ontario.

 

 

Know condo rules before listing

We recently ran in to an issue with a condo and a fairly cranky Property Manager.(at least initially) We had agreed with the seller that based on the location of the townhouse condo, it made good marketing sense to have 2 sets of “For Sale” signs; one right in front of the unit itself and the other at the entrance off the main road.

Immediate removal and repair of “damage”!
Little did we know that the condo had restrictions on where signage could be placed and both of our signs were inappropriate and required immediate removal or repositioning.
The condo limits the location of real estate signage to one small grassy area at the far end of the development from our listed property, so with the clients help we removed the incorrect signage and reinstalled the other one appropriately.

Why do condos have such rules?
The principal reason is to facilitate grass cutting, snow removal and other maintenance and perhaps cluttering up the common areas is an issue, too. (we would probably ban signage altogether but that is a topic for another day)

Mea culpa:
The Property Manager was 100% correct in saying that we either should have known or should have checked prior to installing our signs, so this is a good tip for both sellers and realtors when listing condos. Though not justification, in our defence:  the seller was a new owner who had just purchased the property for renovation and resale purposes and we had not listed a property in this complex for some time, if ever.

Also, we had seen at least one other sign in place in front of another unit listed when our client originally purchased the property, so perhaps that influenced our thinking.

Other condo restrictions:
Lockboxes:
Placement and duration of lockboxes at condo apartment complexes is an ongoing issue for property managers and realtors alike. Take a look around at the proliferation of lockboxes on railings near condo entrances in larger complexes and just think: what could go wrong?

Parking restrictions:
there may be parking limitations or restrictions that make it difficult for realtor showings and open houses

Security matters:
security may also play a role in limiting access, particularly for open houses, as some condos require visitors to be escorted, once inside the building.

Open Houses and signage:
there may be specific regulations aimed at Open Houses and open house signage which owners and realtors should know and support.

In building marketing or posting of flyers or promotional material:
I have seen marketing information posted on condo bulletin boards and also seen flyers dropped outside unit doors. Most condos will have some kind of guidelines for such practices.

Every condo is different:
Also remember that every condo is different and may have varying rules and restrictions, depending on ownership and Board wishes.

A word about property and building managers:
Property managers and in-building managers are very important resources for condo owners and realtors alike. They can be invaluable assets and sources of information and provide critical services, so it is always best to have a good relationship with them.  So do everyone a favour and make sure to check out all condo rules, policies and procedures to facilitate the listing, marketing and sale of your condo property.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
oasisrealty@rogers.com
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