A strata corporation's Contingency Reserve Fund (CRF) has a balance well below the recommended level in the depreciation report. What risk does this pose to a prospective buyer?
Correct Answer
A) The buyer risks special levies for repairs that could reach tens of thousands per unit
An underfunded CRF means the strata corporation does not have sufficient reserves for anticipated repairs and replacements identified in the depreciation report. This significantly increases the risk of special levies — one-time assessments charged to unit owners that can be substantial (sometimes $20,000-$100,000+ per unit for major items like roof replacement, elevator modernization, or building envelope remediation).
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- → A buyer's lawyer requests a status certificate and pays the fee on May 1. The corporation never delivers it. After closing, the corporation claims the seller owed $3,000 in common expense arrears and demands it from the buyer, who relied on the silence. What is the effect under s. 76 of the Condominium Act, 1998?
- → A status certificate delivered to a buyer omits a $4,000 special assessment that the board levied against the unit after the current budget date to increase the reserve fund. The buyer relied on the certificate and closed. Under the Condominium Act, 1998, what is the result?
- → A seller's salesperson is estimating the buyer's costs of reviewing an Ontario condominium unit's status certificate. What is the most the corporation may charge for providing the certificate?
- → A listing salesperson expects offers next week on a resale condominium unit and knows buyers will want the status certificate. By when must the corporation give a status certificate once it is requested?
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- → A buyer reviewing a status certificate asks what the condominium's reserve fund may be spent on. Under the Condominium Act, 1998, what is the permitted purpose?
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- → A buyer's status certificate shows that the corporation received a new reserve fund study two months ago, and the board has not yet sent owners anything about it. What does the Condominium Act, 1998 require of the board?
- → The seller of a condominium unit got board approval and signed a registered s. 98 agreement with the corporation to install a hot tub on her exclusive-use terrace, taking on its repair and insurance costs. How does that agreement affect the buyer?
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