Why refinancing your condo can seem overcomplicated
Your bank wants to know that the condo and the building are in good standing because they are providing you with mortgage funds
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Q: I am refinancing my condo with another financial institution than the one that is presently holding my mortgage. My lawyer has been instructed by the new bank but they are now requesting that I obtain an up-to-date status certificate as a condition to the new financing.
If I continue to own the property, why do they need this document (which costs $100.00) when nothing has changed except the bank holding the mortgage?
A: A status certificate is a document issued by the condominium corporation that sets out a variety of items that relate to the building as a whole and the actual living unit. The information includes: the current reserve fund, if there are any arrears in the common expenses, if there are any lawsuits against the condo corp., and if they anticipate any special assessments or increase in common expenses (among other items). Your bank wants to know that the condo and the building are in good standing because they are providing you with mortgage funds.
Status certificates are part and parcel of all purchases of condos and are reviewed by your lawyer, but increasingly, any time you change a participant in the finances or ownership of a condo, the parties are requesting a current status certificate.
One of the costs of doing business.