If you are buying a condo in Edmonton, it is important that you make your offer to purchase the condo subject to review of the condominium documents. These documents will include the bylaws of the condo corporation, financial statements and budgets, reserve fund studies, meeting minutes, and an information statement. In these documents you may find information related to the condition of the building, any lawsuits by or against the condo corporation, and current or potential special assessments, and any special restrictions such as age or pet restrictions. There are companies that will review these documents for you.
Not only should you be satisfied with the condominium documents but your mortgage lender should too.
Disclose any issues to your mortgage lender
It is necessary that you disclose any issues with the condo building to your mortgage lender even if you feel that they are minor issues or they do not affect you as part of your mortgage application/approval process. For example, anything related to the building structure (even if you think it is not relevant to you), any lawsuits against the corporation, and even special assessments that you intend on paying should be disclosed to your lender.
Your mortgage lender must be satisfied that these issues to do not affect their interest in your property.
If your mortgage is approved and then the mortgage lender becomes aware of issues prior to the funding of the mortgage, they do not have to advance the mortgage loan to you.
If I become aware of any issues on closing with the condo, I must disclose those issues to your mortgage lender and if they were not aware of the issues they may refuse to fund the mortgage despite their mortgage commitment. On closing, I receive an “Information Statement” from the condo property manager that can disclose these issues and I am obligated to forward this statement to the mortgage lender.
If you are purchasing a condo “as is”
Beware if you are purchasing a condo “as is” without having the opportunity to review the condo documents. Even though your mortgage lender has approved the loan, on closing I will be obtaining a statement that discloses any issues with the building which I’m required to provide to the mortgage lender. If a condo issue shows up on this statement and the mortgage lender was not aware of it as part of your approval process, they may not fund your mortgage despite a mortgage commitment.
