What is an Estoppel Certificate? A Must Have for Condo Transactions in Alberta.

Estoppel Certificates and Buying a Condo in Calgary

If you’ve bought a Calgary condo, chances are you’ve heard the term “estoppel certificate.” While this certificate is an essential part of any condominium real estate transaction, many people do not understand what it is or why it is critical to obtain one before making any decisions.

Here’s what you need to know about estoppel certificates in Calgary and why they are important for any resale condo buyer.

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Estoppel Certificates, Defined

 

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An estoppel certificate is an extremely important document for the purchaser to obtain when buying a condo in Calgary. The certificate provides information on the following:

• Status of the condominium contribution account (also known as “condo fees”)
• Unpaid arrears from the previous owner such as debts, claimed interests, special assessments, interest, or fees owing
• Payment schedule for condo fees (usually on a monthly or yearly basis)
• Outstanding legal issues, such as ongoing legal matters involving the condo
• Long-term contracts and/or obligations of the condo corporation

This document is critical because the Condominium Property Act of Alberta makes the new owner responsible the same as the previous owner for any outstanding balances.

Do your due diligence, check the estoppel certificate, and make sure you aren’t covering the bill for any unpaid fees. In some rare cases, these fees could be significant and be a big hit to your finances.

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Who Orders an Estoppel Certificate?

In most cases, the condominium seller’s lawyer will order the estoppel certificate and provide it to the buyer’s lawyer. The management company usually prepares this document on behalf of the condominium corporation and typically provides it to the buyer when they meet with their lawyer to sign the closing documents.

The contract used to buy a condominium should state the seller is responsible for any unpaid condominium fees and the buyers’ lawyer is allowed to make adjustments at closing to pay any outstanding balance.

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How Long Is an Estoppel Certificate Valid For?

Estoppel certificates provide a snapshot of a condominium’s financial and legal status on a specified day and time.

Due to this “timestamp,” they are usually only valid for a limited number of days because the information contained within the certificate can change at any time. Therefore, make sure to check the timeframe of which it is valid.

How Much Does an Estoppel Certificate Cost?

The cost of acquiring an estoppel certificate varies, but it usually ranges from $200 to $400 or more. The price depends on the service provider and is sometimes included as part of the general fees by some firms.

Ask about the cost of the certificate and include it on your list of "additional costs" when buying a condo in Calgary.

Questions about Estoppel Certificates?

If you have questions about estoppel certificates in Calgary as a potential condo buyer, our team of professional REALTORS® would be more than happy to discuss those with you. If needed, we can refer you to trusted real estate lawyers of whom we have worked closely with for decades.

Don’t hesitate to contact us today with your questions about buying or selling a condo in Calgary, and we will be happy to assist you!