Reviewing a Condo Status Certificate Before You Buy in Ontario

When you buy a condo you are buying a unit and also joining a corporation that shares costs and risks with every other owner. The status certificate is the corporation's snapshot of its finances, rules and legal troubles. It is often a thick package, and it arrives while your offer's conditions are running.

This article walks through what the certificate can include and how to read the parts that matter most. It is general information. Your lawyer should review the actual document, because what counts as a warning sign depends on the building and your plans.

What a status certificate is and how you get one

A status certificate is a package of documents and statements issued by the condo corporation about the unit and the corporation. It must be given within 10 days of the request and fee, the corporation may charge up to $100 including taxes, and anyone can request one.

CMHC advises making a satisfactory status (estoppel) certificate a condition of the offer. What that condition lets you do if the certificate shows a problem, how long it lasts and how it is worded depend on your agreement, so it is worth confirming with a lawyer.

What a status certificate can include

A certificate can include the following items. Not every certificate will look the same, so confirm with your lawyer that nothing is missing.

Reading the reserve fund section

The reserve fund pays for big repairs like roofs, elevators and parking garages. The Condominium Act, 1998 requires the reserve fund statement to cover the most recent reserve fund study and updates, the reserve fund balance at a month-end within 90 days of the certificate date, and current plans to increase the fund.

In plain terms, look for these things:

• Does the fund balance look reasonable against the repairs the study predicts?
• Does the corporation plan to raise the fund, and will that mean higher monthly fees?
• Is the study recent, and does it list major work coming soon?
• Is the balance date within the 90-day window described above?

A thin fund does not always mean trouble, and a large fund does not guarantee there will be no extra charges. Ask your lawyer or another qualified adviser how the numbers compare for this building.

Special assessments, arrears and lawsuits

A special assessment is an extra charge to owners when money is needed beyond the usual fees. The certificate can show special assessments since the budget and any common expense increase. Check whether any amounts are still owed on the unit you are buying and who is responsible for them under your agreement.

The certificate can also show outstanding judgments or ongoing litigation. A lawsuit against the corporation, or by it, can affect costs, insurance and the building's reputation. You do not need to be a litigator to read it: note who is suing whom, what it is about and what the corporation says about the possible cost. Then raise it with your lawyer.

Also check the unit's common expenses and arrears. Unpaid fees on the unit are something to sort out before closing.

Timing and what a late certificate means

If the corporation misses the deadline, it is deemed to have issued a certificate on the day after, and a certificate binds the corporation as to the information it contains. This is one reason to keep the request date, fee receipt and delivery date on file. Your lawyer can advise how this affects your situation.

What to do next

• Check that your offer has a status certificate condition and note its deadline.
• Request the certificate promptly and keep proof of the request and fee.
• Send the full package to your lawyer the day it arrives.
• List questions on the reserve fund, fee increases, special assessments and litigation.
• Read the rules on pets, rentals and renovations against your own plans.
• Decide with your lawyer whether to proceed, negotiate or use the condition before it expires.

Frequently asked questions