What Is a Condo Estoppel Certificate in Saskatchewan and What Does It Cost?

Buying or selling a resale condo in Saskatchewan means dealing with more than the unit itself. You are also dealing with the condominium corporation, its finances and its legal position. One document that helps you see that picture is the estoppel certificate.

This article explains what the certificate is, what it shows, what it can cost, and how resale units differ from new ones. It also touches on the reserve fund, which is a good companion check. This is general information, not advice on your particular purchase or sale.

This article covers the law of Saskatchewan.

What an estoppel certificate is

An estoppel certificate is a written statement from the condominium corporation about the unit's standing with the corporation. On an owner's application, the corporation must issue one in the prescribed form.

The word "estoppel" matters. It means the corporation cannot later deny what it certified. If the certificate says something about the unit's fees or the corporation's position, the corporation is generally held to it. That is why buyers value it.

The condominium law that applies is The Condominium Property Act, 1993 and The Condominium Property Regulations, 2001. If you need to rely on the exact wording of the certificate rules, it is worth confirming the current provisions with a lawyer.

What the certificate shows on a resale unit

For a resale unit, the buyer can request an estoppel certificate from the corporation. It covers the following:

• Fee payment status, meaning whether the owner's condo fees are paid up.
• Contribution amounts, meaning what the owner is expected to pay.
• Insurance held by the corporation.
• Outstanding lawsuits or judgments against the corporation.

Together, these tell you whether the unit comes with unpaid fees, whether the corporation is insured, and whether it faces legal trouble that could lead to costs for owners. What the certificate does not tell you is just as important. It is not a substitute for reading the bylaws or for having a lawyer review your purchase documents.

Who asks for it and what it costs

The certificate is issued on an owner's application. In a resale, that usually means the seller applies, or the buyer asks for it through the sale process. A buyer can request one for a resale unit. Who pays is a practical point that is often sorted out in the purchase agreement, so check what yours says.

The 2001 Regulations allow the corporation to charge a fee of up to $200. A corporation may charge less. Ask the corporation or the property manager what they charge before you apply.

Resale versus new condos

A new condo is a different situation. The developer must give the buyer a copy or description of the purchase agreement, bylaws, management agreement and condominium plan, among other documents. For a new building, ask what you will receive and how it applies to your purchase. How an estoppel certificate fits in depends on your situation, so it is worth confirming with a lawyer.

For a resale unit, the buyer can request an estoppel certificate from the corporation, and it covers fee payment status, contribution amounts, insurance, and outstanding lawsuits or judgments against the corporation. In both cases, read the bylaws. They can be amended by special resolution, and no bylaw may prohibit or restrict the lease of units, which matters if you plan to rent the unit out.

Why the reserve fund is worth checking

The reserve fund is a corporation asset held in trust for statutory purposes. It cannot be paid out to owners while the property remains under the Act. Its purposes include unforeseen common expenses and major repair or replacement of common property and building systems.

A reserve fund study must be done every five years by a qualified person, such as an engineer or Certified Reserve Planner. There is an exception: condominiums with fewer than 12 units, and single-owner rental condominiums, are exempt from the reserve fund requirement. If your building is small, you may not find a study at all, so ask how the corporation plans for big repairs.

A thin reserve fund can lead to special assessments or higher fees later. Whether that is a concern for a given building depends on its age, size and condition, and is worth discussing with your lawyer.

What to do next

• Ask the seller or the corporation how to apply for the estoppel certificate, and what fee applies (up to $200).
• Read the certificate for fee status, contribution amounts, insurance, and lawsuits or judgments.
• If the unit is new, make sure you receive the purchase agreement, bylaws, management agreement and condominium plan.
• Ask for the most recent reserve fund study, if the building is required to have one.
• Read the bylaws, especially anything on renting out the unit.
• Consider asking a lawyer to review the documents before you finalize your purchase. The right timing depends on your purchase agreement, so it is worth confirming.

Frequently asked questions