What happens if the unit I'm buying has unpaid condo fees (arrears) shown in the status certificate?
A status certificate will disclose any unpaid common expenses (arrears) for the specific unit being sold. If the seller owes arrears to the corporation, this is an important issue that must be resolved before or at closing. The condominium corporation can register a lien against the unit for unpaid fees, and that lien has priority over most encumbrances. If you take title to a unit with a registered lien for arrears, you may inherit that financial obligation.
Your real estate lawyer will review the status certificate for arrears and will ensure, as part of closing, that any outstanding amounts owed to the corporation are either paid by the seller out of closing proceeds or otherwise resolved. The lawyer will typically require a certificate or undertaking confirming the account is clear as a condition of releasing funds.
This is one of the reasons having a lawyer manage your condo closing — rather than attempting to do it yourself — provides essential protection. Missing an arrears issue could mean unexpected costs immediately after you take possession.
Key takeaways
- The status certificate discloses common expense arrears for the specific unit.
- Condo corporation liens for arrears can follow the unit and bind a new owner.
- Your lawyer will ensure arrears are cleared from closing proceeds before title passes to you.
- Arrears are a common and correctable issue, but must be addressed at closing.